Apple Buys $5 Million Stake In Mobile Chip Designer (AAPL)

Apple has bought a small stake in Imagination Technologies, a British chip designer. Imagination says Apple purchased a 3.6% stake for about $4.8 million. Apple also licenses Imagination’s technology.

CNET: [Imagination’s] PowerVR cores will likely sit alongside the ARM-based processor core designs that the former P.A. Semi team is believed to be developing for future iPhones. Imagination has also signed a manufacturing licence deal with iPhone processor maker Samsung, perhaps a sign that Apple will continue to use Samsung as a manufacturing partner once the P.A. Semi designs are complete.

What’s the point? Better graphics, which means better video and gaming performance. Apple is counting on a rich gaming platform to help set its iPhone and iPod touch apart from competitors.

Imagination’s shares jumped 23% to 48p on the London Stock Exchange.

One question we’d ask: Why didn’t Apple just buy the whole thing? Apple had $25 billion in cash and short-term investments at the end of September.

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