Imagination still going strong, though royalty rate eases

The day after the much ballyhooed release of Apple's iPhone5, chip designer Imagination Technologies released a well-timed trading update in which it revealed its business momentum has continued in the new financial year."Our partners' product launches in the second half of the last financial year, together with shipments starting for a number of customers for the first time this year, have both contributed to strong growth in unit shipment volumes," the group said in its interim management statement.The volume growth has been driven across the expected key segments, including: mobile phone, computing/tablets, mobile multimedia/gaming and home consumer. Royalty revenue growth has continued to be strong, in line with expectations. As expected, the strong unit volume growth has steadily extended to the lower-end of the smart phone market resulting in a small downward movement in the average royalty rate.Licensing activity remains steady but is subject to the usual uncertainty over timing, particularly given the continuing macro-economic volatility."Our 'smart' technologies are being adopted more widely across both new and existing partners, creating a wider base for continued momentum in future volume growth which maintains our stated goal of around 1bn annual unit shipments by 2016 as a realistic objective," said Hossein Yassaie, Imagination's Chief Executive. JH