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Apple's Move to Take Control over its Graphic Chip is likely due to their Next Big Thing: Augmented Reality

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Apple's Chief Financial Officer Luca Maestri said during a February conference that "Today we do much more in-house development of fundamental technologies than we used to. Think of the work we do on processors or sensors. We can push the envelope on innovation. We have better control over timing, over cost and over quality." More evidence of that philosophy was evident this week when Apple made it public that they were going to stop licensing graphics chips from Imagination Technologies Group.


Reuters notes in a report today that Apple's move was "the clearest example yet of the iPhone maker's determination to take greater control of the core technologies in its products - both to guard its hefty margins and to position it for future innovations, especially in so-called augmented reality.


It may also help the company move faster - and save money - as it focuses on new technologies such as virtual and augmented reality. Apple CEO Tim Cook has indicated that Apple plans to integrate augmented reality into its products, which makes 3-D sensors and graphics chips like Imagination's especially important.


Apple spends only $75 million a year on licensing fees for Imagination's chips. But licensing fees to chip designers, taken together, are a significant cost for the iPhone. Apple recently sued Qualcomm for $1 billion over licensing terms for its communications chips - which Apple would have trouble designing in-house because of patent issues." Read the full Reuters report for more details.


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