Great blogging from Ken last Friday at the AGM using his iPad2.
Another great AGM with HY able to confidently (but with no arrogance at all) reassure investors they are in one of the world's great technology companies, with huge growth to come.
Once again the event was superbly organised and hosted by Susi Barrett and her team. The directors, management team and CEO made themselves freely available to ordinary Joe's like us.
Some key points follow, to the best of my recollection:
- now IMG is known as a 'silicon, software and cloud IP supplier' - the cloud activities will start with Pure
- the 'smartphones and tablets' aspect of the business is 'recession proof'.
- cycle time reduced to 1 year from 3, thanks to Apple
- 'expect to see big things with Nokia on the back of Windows 8'
- whilst discussing tablet market 'we expect to be party to other key products' - there was a possible clue to Amazon in there (no confirmation)
- Smartphones will be approx 50% of the total phone market within 2 years, giving IMG a TAM of 700-800 million units in this sector alone.
- IMG are about 70% of the total mobile graphics market at present
- IMG currently have approx 50% of the Android volume. Qualcomm have about 30%.
- IMG do lots of business with Samsung and are always trying to sell more IP cores to them
- In the 'home' market (TV/STB/audio etc) 'cannot overemphasise design-win strength in this area'.
- 'we are in Google reference design for multiple generations for tablets' - a clear nod to ICS/OMAP 4
- Healthcare, smartpower and security will take us from 1Bn to many billion units.
- Current run-rate of IMG'd chips is rising to 30m/month
- Demand for the next generation graphics (Rogue) is 'immense', products are 2 years away. IMG can manage 6 lead licensees for now but many more will follow.
- re-iterated 'we don't give our stuff away for free' when mentioning a competitor's claims (Mali) about Mediatek
- the 245m chip volume for 10/11 was from 48 SoCs - 67 SoCs are in design/prototype
- the 500m target was 'too close'
- big rise in Home Consumer SoCs (30) - clearly lots of deals have been done in this space but we are not privy to the names involved. We are on TV brands other than Sony but no names given.
- Regarding Hellosoft there have been multiple agreements with 'significant operators and handset OEMs' - perhaps a clue to Verizon in there. HY has met more operators in past 6 months than in his whole life.
- Regarding Caustic - very strong patents - can do 'magic stuff' when you add ray-tracing to Rogue - will help console makers differentiate from other games devices (phone/tablets etc). Will also help games developers cut costs by up to 90% ! The Caustic demo was astonishing.
- No risk of losing the really important partners - 'we are central to their platform' - Apple, Intel, Google.
- We have the best technology performance per square mm and per mW - Intel, Apple, Sony etc would not use us if this was not true. We have to 'scale' with these type of partners. When the decision is based on technology alone (ie. no politics etc) then IMG always wins.
- GPU adoption - we are only 20% along the curve (at 200m)
- in 10/11 40% of our shipments had video core inside.
- PURE/DAB+ Germany rollout starts in September, doubles our potential market. Pure would be very profitable if all the expenses/RD did not get loaded onto it.
- Licensing 'interest couldn't be better'
- ASP expected to remain @ 27c/chip this FY.
- 'would like to see IMG as a FTSE 100 company' and 'put UK on the map'.
Good luck to all fellow Imagineers.
IMG
Tuesday 23 August 2011
Friday 19 August 2011
Clauses 11-13
Passed with no questions - the 'usual suspects' must have pulled a sickie today. There's usually a fully paid up member of the awkward squad in attendance, maybe it's an upside of the recession that they couldn't afford to come :-)
Ah hah ! I wrote too soon - he's (GNMartin) in and he's asking about the share buyback !!
Some yawnsville stuff about whether there is a cost associated to the buyback in the P&L and poor shareholder return on buybacks vs dividends.
HY says we haven't done it and would do it only to bolster the share option schemes - which sounds odd ! I thought it was to offer me, personally, above Market price for my shares as and when I fancy it
Ah hah ! I wrote too soon - he's (GNMartin) in and he's asking about the share buyback !!
Some yawnsville stuff about whether there is a cost associated to the buyback in the P&L and poor shareholder return on buybacks vs dividends.
HY says we haven't done it and would do it only to bolster the share option schemes - which sounds odd ! I thought it was to offer me, personally, above Market price for my shares as and when I fancy it
And the dull stuff
There should be a 'Surf's up'/'Right to party' clause at the start of the statutory stuff - all here acknowledge that there are already more than enough votes received to carry this stuff, the wine's out the back - who's comin' ?
Passed unanimously !
I've got a feeling there may be some q's about clauses 11-13 !
Passed unanimously !
I've got a feeling there may be some q's about clauses 11-13 !
Android
Q1 this year we are in 50% of handsets sold.
We are also involved in multiple generations of ref designs
We are also involved in multiple generations of ref designs
What's the feeling on takeovers ?
Unlikely without an enormous fight due to Intel and Apple being shareholders - will be done over their bodies
Licensing revenue
Last year HY said better than ever and we did really well, this year he said it's better than ever again, what's the feeling on whether 10% rise is high enough fornnext year ?
Stick with it :-)
Stick with it :-)
Who do you see as the major competitors in the various markets we are in or want to be in
Qualcomm are above NVIDIA in terms of mobile graphics, and they are one if the few who haven't taken our graphics - yet.
Video - no-one else out there is really competing, most of the people there are in house and Market is moving away from that.
Comms - moving away from monolithic solutions to flexible solutions.
Video - no-one else out there is really competing, most of the people there are in house and Market is moving away from that.
Comms - moving away from monolithic solutions to flexible solutions.
Do you see the recession as a major threat to the business
The first dip didn't have much of a major impact.
The second dip looks as though people are thinking about things more, but it is not affecting their decision to buy. Main concern in short term is all the doom and gloom in the press that may slow down consumer spending but overall it will probably have no effect.
The second dip looks as though people are thinking about things more, but it is not affecting their decision to buy. Main concern in short term is all the doom and gloom in the press that may slow down consumer spending but overall it will probably have no effect.
Have the board noticed a lack of talent available and what to do to address it ?
a. We bought other companies which addressed certain aspects
b. But we want to retain our uk identity.
c. We have even gone to schools - not universities - to get kids excited about careers in technology.
d. We support university programmed. Last year hired 70 graduates.
b. But we want to retain our uk identity.
c. We have even gone to schools - not universities - to get kids excited about careers in technology.
d. We support university programmed. Last year hired 70 graduates.
Dividend
The chestnut has come up - somewhere in the middle of a statement that has so far gone on for almost as long as HY spoke for.
Expect the usual response. Ah, there it is, as comforting as an old cardigan and a hug from your favourite grandparent.
Quote from HY - we are told by ..... - HY, they say, you have to scale with us on this roadmap, so we have to increase spend to keep pace, so the spare cash has to be re-invested, and we have to invest in our future.
Also included -
R & D spend - is it too high ? Answer. No it isn't. Slightly expanded to say that quite a bit of it was one off acquisition integration.
Expect the usual response. Ah, there it is, as comforting as an old cardigan and a hug from your favourite grandparent.
Quote from HY - we are told by ..... - HY, they say, you have to scale with us on this roadmap, so we have to increase spend to keep pace, so the spare cash has to be re-invested, and we have to invest in our future.
Also included -
R & D spend - is it too high ? Answer. No it isn't. Slightly expanded to say that quite a bit of it was one off acquisition integration.
Patents
First and foremost we use our patents to protect ourselves and our customers.
What our patents do is protect our customers from litigation from 3rd parties.
Where potential infringements are seen that are peripheral or marginal it's not worth chasing as you are seen as eager litigators. Where it is thought that Market share is being unfairly leveraged and gained by using our patents then we will protect them.
What our patents do is protect our customers from litigation from 3rd parties.
Where potential infringements are seen that are peripheral or marginal it's not worth chasing as you are seen as eager litigators. Where it is thought that Market share is being unfairly leveraged and gained by using our patents then we will protect them.
Can you expand on the relationships with our important customers ?
We have better relationships with our customers now than ever before. We even still have hopes for our up and down relationship with certain Korean customers.
And Dave takes the stage !
sporting his ear ring, tattoo AND a logo t-shirt.
What a guy :-)
Q & A sesh about to start - once we can get Dave off ha ha !!
What a guy :-)
Q & A sesh about to start - once we can get Dave off ha ha !!
Demand
Pipeline has NEVER been this strong. Past 18 months has been consistently increasing - now 15-20 sales people flying the world selling the business around then globe, contributing to influx of new unheard of licensees.
Integration of new businesses will be complete within 6 months.
Speaks very highly of Hellosoft guy - new IMG USA chief - Krishna and his exhaustive contacts.
PURE is really a pretty profitable business, it is just loaded with extra costs at the moment as investment in the new services and cloud apps are worked on.
Integration of new businesses will be complete within 6 months.
Speaks very highly of Hellosoft guy - new IMG USA chief - Krishna and his exhaustive contacts.
PURE is really a pretty profitable business, it is just loaded with extra costs at the moment as investment in the new services and cloud apps are worked on.
PURE
Still loves the biz, sees it as the key mover to cloud based services in addition to the growing worldwide markets.
Cloud strategy will involve monthly payments for certain services (something he spoke passionately about a couple of yrs ago, now getting v close to release).
New Spotify-like service coming.
And HY is leaving the lectern.
Boring number stuff about to come out from the new suspiciously tall CFO. It must be something in the public school water or something. Doesn't have the gravity of old TS, maybe it's just the relative lack of inches.
Cloud strategy will involve monthly payments for certain services (something he spoke passionately about a couple of yrs ago, now getting v close to release).
New Spotify-like service coming.
And HY is leaving the lectern.
Boring number stuff about to come out from the new suspiciously tall CFO. It must be something in the public school water or something. Doesn't have the gravity of old TS, maybe it's just the relative lack of inches.
Trends
Out of 250m sales, graphics = 200, video = 100, so lots have both.
Central to Apple, Android and Winphone platforms, biggest ecosystem, most efficient/powerful, excellent ongoing relationships.
OpenCL once again emphasised due to higher scalability of GPU's - GPGPU, image processing, analysis, physics, data analysis
Video and V.VOIP future. LTE within 5-10 years, all voice and video will be IP
Future is programmable communications, adding in RPU (radio processing unit) as component on SoC's - like CPU, GPU
Check out the flow slide, interesting stuff - cloud apps include security, healthcare, etc
Central to Apple, Android and Winphone platforms, biggest ecosystem, most efficient/powerful, excellent ongoing relationships.
OpenCL once again emphasised due to higher scalability of GPU's - GPGPU, image processing, analysis, physics, data analysis
Video and V.VOIP future. LTE within 5-10 years, all voice and video will be IP
Future is programmable communications, adding in RPU (radio processing unit) as component on SoC's - like CPU, GPU
Check out the flow slide, interesting stuff - cloud apps include security, healthcare, etc
Hellosoft and Caustic
Every device is a video player in the future - press your phone/tablet, video hits your screen. Current WiFi is not good enough, MIMO will allow this to happen and we have it now we have Hellosoft.
Caustic - Very strong patents in place, extremely complimentary, demos today will be prototypes running at a fraction of the speed (1/20) and is already same speed as current top end NVIDIA offerings.
Will be an add on to Rogue, not a replacement (20% hardware addition to give 'magic')
Using ray tracing massively reduces the cost to develop a new game (1/10 to 1/5 of the cost previously)
Follow Open RL and Brazil news to follow the progress.
Caustic - Very strong patents in place, extremely complimentary, demos today will be prototypes running at a fraction of the speed (1/20) and is already same speed as current top end NVIDIA offerings.
Will be an add on to Rogue, not a replacement (20% hardware addition to give 'magic')
Using ray tracing massively reduces the cost to develop a new game (1/10 to 1/5 of the cost previously)
Follow Open RL and Brazil news to follow the progress.
Targets
Hit 250m off 48 chips, 115 in the mix altogether so obvious where 1bn is coming from.
'I can't imagine we would have <50% Market share of mobile phone Market by 2014.
Proceeded to do some maths and take the p1ss out of analysts, hard not to love this guy !
'I can't imagine we would have <50% Market share of mobile phone Market by 2014.
Proceeded to do some maths and take the p1ss out of analysts, hard not to love this guy !
Licensee relationships
Significant, on-going extended relationships with 99% of customers.
Hellosoft opening doors to customers 'like Verizon' around the world. !!!
LG and ST switched graphics to us, Fujitsu stitched fro in-house to us - shows the best OS what is needed.
Next generation graphics demand is 'immense' - we are having to slow down to meet the demand, basically we are holding back demand.
However - Rogue is about ready, but 'don't expect Rogue product next year, think more like 2013'- bit of a disappointment that one.
80+ chips out at the moment
Hellosoft opening doors to customers 'like Verizon' around the world. !!!
LG and ST switched graphics to us, Fujitsu stitched fro in-house to us - shows the best OS what is needed.
Next generation graphics demand is 'immense' - we are having to slow down to meet the demand, basically we are holding back demand.
However - Rogue is about ready, but 'don't expect Rogue product next year, think more like 2013'- bit of a disappointment that one.
80+ chips out at the moment
Smartphone TAM
Sees 50% base line Market share of total smartphone Market once the upcoming battles for supremacy are settled.
'I cannot overempahsise the design wins we have in the home consumer market' - very confident in this area
Mobile computing - 'we are the reference design for MULTIPLE generations of android platforms' !!!!! That's news folks
Also sees tablet and smart tv synergies coming
'I cannot overempahsise the design wins we have in the home consumer market' - very confident in this area
Mobile computing - 'we are the reference design for MULTIPLE generations of android platforms' !!!!! That's news folks
Also sees tablet and smart tv synergies coming
Sees Intel as being a bigger and bigger player in the tablet arena
as well as STBs.
Interesting that he sees Intel as taking tablet Market share rather than other ARM players - and we're in there.
Interesting that he sees Intel as taking tablet Market share rather than other ARM players - and we're in there.
Product cycle
Down to 1 yr from 3 for video and graphics.
New IP families introduced every 4 yrs or so with annual spins
Also, some new IP is not announced until almost to Market - stops competitors seeing what is coming too early.
Usual 'we operate across all platform' comments - heard it before, but good to keep hammering it out and maybe analysts will finally listen.
HY sees Nokia becoming an impoant customer with new Mobile Windows products !!
New IP families introduced every 4 yrs or so with annual spins
Also, some new IP is not announced until almost to Market - stops competitors seeing what is coming too early.
Usual 'we operate across all platform' comments - heard it before, but good to keep hammering it out and maybe analysts will finally listen.
HY sees Nokia becoming an impoant customer with new Mobile Windows products !!
PURE
Will be adding cloud applications and products in future so moving away from radio only products
HY is up - "New emphasis
On the company being silicon, software AND CLOUD - adding the cloud in, helped by Hellosoft purchase for comms
AGM 17 is underway
amid the usual multimedia issues...
2 hrs of fun and games to come before the serious business of demo room and general carousing gets underway
2 hrs of fun and games to come before the serious business of demo room and general carousing gets underway
Riders and runners to the starting gate
...and we're about to begin !
Tony King-Smith has his traditional 'Antipodean' patterned tie on, so Board stability remains intact despite the imminent departure of Trevor 'Lofty' Selby
Tony King-Smith has his traditional 'Antipodean' patterned tie on, so Board stability remains intact despite the imminent departure of Trevor 'Lofty' Selby
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