Apple's shares may have fallen in the US after reports it is cancelling its famous Macworld exhibition after this January's event, but the iPod and iPhone maker has proved a positive influence on the UK market today.
Shares in chip designer Imagination Technologies have soared 11p to 50p - a 28% gain - after the US technology giant took a 3.6% stake, buying 8.2m new shares at 39p each. Apple already licences Imagination's technology. Analyst Dan Ridsdale at Teathers said:
"[This is] clearly a positive endorsement of Imagination's intellectual property, although it was widely known that Apple was a licensee already. It gives us further confidence that Imagination's royalty per share from Apple devices should increase as it launches devices on its own chips. It is very unlikely to lead to a takeover in our view, given Imagination's broad licensee base and Intel's investment [it has a 3% shareholding].
"[But it] indicates that management was less comfortable with the cash position than suggested at the interims. It may also suggest that licensees are demanding ongoing investment reducing the likelihood of cost savings if demand slows."
Ian Robertson at Seymour Pierce was also positive, saying:
"This is a considerable vindication of Imagination's intellectual property and potential, and it adds considerable weight to the rumours that the recent multi-license multi-application announcement relates to Apple. We regard Imagination as an undervalued stock that has the potential to replicate the success of ARM, albeit in a smaller way. We initiate on the stock with a buy and a target price of 53p based on a sum of the parts valuation. (Note these numbers do not account for today's share issuance)."
