Imagination Tech deals in semiconductors, chips, cloud, and other computer software and hardware. But they’re dealing with an Apple bombshell. Apple is their biggest customer. However, Apple announced they are going to stop using Imagination Tech. Apple stock causes Imagination Tech downfall.
So, how low are their stocks? As of today, their stock points are down around 70%. But why are they this low? Because Apple brings in over half Imagination Tech’s business. That is what is causing the Imagination Tech downfall. Apple said it will no longer use Imagination Tech’s graphics or software for any of Apple’s products. Hence, this will be a slow phase, around 18 months or two years. Also, Imagination Technologies will no longer get royalties from Apple.
So why is Apple doing this? Because they now have their own graphics people. Furthermore, Apple wants more control of their own technology. It’s obvious shareholders hate this change. Because the stock price plunged to it’s lowest level since summer 2009. On March 31, 2017, their stock points were over $250 a share. But now, those same stocks are worth around $76 a share. Last year, Apple thought about buying Imagination Tech. But that deal went sour at the last minute. This only adds to the Imagination Tech downfall?
So what does Imagination Tech do now? Furthermore, what’s the lesson we in IT support can learn from this? Here is one: Don’t be too dependent on one client or one business! This is true for computer repair, laptops fixed, or any other computer tech business. This is a dangerous way to do business. Because that one client can leave you, take all your potential business, and leave you with almost nothing. I think the best thing Imagination Tech can do now is look for bigger clients, and several of them. At least they can say, “We supplied Apple with software and hardware.” When you can honestly say that, that’s one heck of a selling point. Will Imagination tech bounce back and overcome this downfall?