LONDON: Imagination Technologies, the British firm that lost 70 percent of its value after being ditched by its biggest customer Apple, put itself up for sale on Thursday in a disappointing end to a once-great European tech success story.
Founded in 1985 and listed in 1994, Imagination has been rocked by Apple’s announcement in April that it was developing its own graphics chips and would no longer use Imagination’s processing designs in 15 months to two years time.
Apple’s decision, which analysts said posed an existential threat to the company, sent Imagination’s shares plummeting 70 percent on April 3 and they have barely recovered since.
The stock jumped as much as 21 percent on Thursday, however, after the sale announcement to 149.5 pence, giving the company a market capitalization of £425 million ($538 million).
Analysts said potential buyers could include Intel, Qualcomm, Mediatek, CEVA and various entities from China, while Apple itself could be interested.
“Imagination Technologies announces that over the last few weeks it has received interest from a number of parties for a potential acquisition of the whole group,” the company said.
“The board of Imagination has therefore decided to initiate a formal sale process for the group and is engaged in preliminary discussions with potential bidders.”
Imagination has said it doubted Apple, which accounts for about half of its sales, could go it alone without violating Imagination’s patents. Analysts said legal battles were likely and Imagination started a dispute-resolution procedure in May with the US giant, which is valued at $761 billion.
The British company initially responded to Apple’s decision to walk away by putting two of its main divisions up for sale.
“That was a pretty dire scenario, akin to selling off the family silver to keep the estate going a little longer,” said Neil Wilson, senior market analyst at ETX Capital. “Now the shutters are up and a buyer sought. A pretty ignominious end to what was a great British tech success story.”
Imagination has licensed its processing designs to Apple from the time of the first iPod and receives a small royalty on every device using its graphics.
Imagination’s shares rose sharply between 2009 and 2012 as sales of smartphones boomed, prompting Apple and Intel to buy stakes and the company was valued at more than £2 billion in April 2012. Apple owns 8 percent of the shares.
Imagination struggled, however, to reduce its reliance on Apple, and has faced increased competition from the likes of chipmaker Qualcomm and British rival ARM, which developed its own graphics to complement its core processor blueprints.
Imagination downplayed fears it could lose Apple contract for years. Facing reports that Apple was building a graphics operation and hiring Imagination staff, the British firm told investors that Apple was just improving its customization of the technology Imagination sold, rather than replacing it.
Analysts at Stifel said they thought interested parties could include those groups that want to develop their own processing technology across platforms such as mobile, wearable tech, vehicles and the so-called Internet of Things.
“This could include a coordinated Chinese bid, a hyper-scale vendor from the cloud or some other IP player,” they said.
Imagination said on Thursday it had received indicative proposals for its embedded MIPS technology — processors used in vehicles and home appliances — and its mobile connectivity division Ensigma, the two businesses put up for sale in the wake of the slide in its shares.
While Imagination has other clients for its technology, UBS analysts estimated in April that its non-Apple business was worth just £81 million and the MIPS division, which it bought for $100 million in 2013, was worth £77 million.
UBS said the company could be worth 110 pence per share on a sum of the parts basis. In May, Jefferies said the wind-up value was about 96 pence a share while Morgan Stanley said the company could be worth as little as £106 million, or just 30 pence per share, though its base case was 95 pence.
The US investment bank said Imagination’s headquarters was worth £40 million.
Imagination Tech up for sale after bruising Apple fight
Imagination Tech up for sale after bruising Apple fight
US ready to reopen oil stockpile if petrol prices surge again, FT reports
BENGALURU: The Biden administration is ready to release more oil from the US strategic stockpile to stop any jump in petrol prices this summer, the Financial Times reported on Monday.
Senior Biden adviser Amos Hochstein told the newspaper that oil prices are “still too high for many Americans” and he would like to see them “cut down a little bit further.”
Hochstein, speaking to the FT said that the US would “continue to purchase into next year, until we think that the Strategic Petroleum Reserve has the volume that it needs again to serve its original purpose of energy security.”
The Energy Department this year has been buying about 3 million barrels of oil per month for the SPR after selling 180 million barrels in 2022 following Russia’s invasion of Ukraine. The move was an effort to curb gasoline prices that spiked to more than $5 a gallon, but it also reduced the reserve to its lowest level in 40 years.
Earlier this month, Energy Secretary Jennifer Granholm told Reuters that the US could hasten the rate of replenishing the SPR as maintenance on the stockpile is completed by the end of the year.
China’s May industrial output misses forecasts, retail sales a bright spot
BEIJING: China’s May industrial output lagged below expectations with the property sector still weak, adding pressure on Beijing for policy support to shore up growth, but retail sales beat forecasts thanks to a holiday boost, according to Reuters.
The industrial data released on Monday by the National Bureau of Statistics came in below expectations for a 6 percent increase in a Reuters poll of analysts.
However, retail sales, a gauge of consumption, in May rose 3.7 percent on year, accelerating from a 2.3 percent increase in April and marked the quickest growth since February. Analysts had expected retail sales to grow 3 percent due to the five-day public holiday earlier in the month.
Fixed asset investment expanded 4 percent in the first five months of 2024 from the same period a year earlier, versus expectations for a 4.2 percent rise. It grew 4.2 percent in the January to April period.
China’s property market downturn, high local government debt and deflation remain heavy drags on economic activity. The latest figures point to an uneven growth that reinforces calls for more fiscal and monetary policy support.
With narrowing interest margins and a weakening currency remaining key constraints limiting Beijing’s scope to ease monetary policy, China’s central bank left a key policy rate unchanged as expected on Monday.
The world’s second-largest economy grew faster than expected at 5.3 percent in the first quarter, but analysts say the government’s around 5 percent annual growth target is ambitious.
China’s exports grew faster than expected in May helped by improved global demand, but imports growth slowed significantly.
Tepid demand at home has also kept a lid on consumer prices as confidence remains low in the face of a protracted property sector crisis. New bank lending rebounded far less than expected in May and some key money gauges hit record lows.
Property investment fell 10.1 percent year-on-year in January-May, deepening from a decline of 9.8 percent in January-April.
China’s property sector has been hit by a regulatory crackdown and the government has slashed down payment requirements and canceled the floor rate for mortgage interest rate.
The central bank last month announced a relending program for affordable housing to accelerate sales of unsold housing stock.
The job market overall was steady. The nationwide survey-based jobless rate hit 5 percent in May, the same as that in April.
The government has vowed to create more jobs linked to major projects, roll out measures to promote domestic demand targeted at youths and has pledged greater fiscal stimulus to shore up growth.
Oil Updates – prices slip on weaker US consumer demand, rise in China output
NEW DELHI: Oil prices slipped in Asian trading on Monday after a survey on Friday showed weaker US consumer demand and as May crude production rose in China, the world’s biggest crude importer, according to Reuters.
Global benchmark Brent crude futures for August delivery were down 40 cents, or 0.5 percent, at $82.22 per barrel at 9:31 a.m. Saudi time. US West Texas Intermediate crude futures for July delivery fell 36 cents to $78.09 a barrel.
The more-active August delivery WTI contract slipped 0.5 percent to $77.7 per barrel.
That followed prices slipping on Friday after a survey showed US consumer sentiment fell to a seven-month low in June, with households worried about their personal finances and inflation.
However, both benchmark contracts still gained nearly 4 percent last week, the highest weekly rise in percentage terms since April, on signs of stronger fuel demand.
“Last week’s robust rally was fueled by forecasts of strong 2024 demand from OPEC+ and the IEA. However, given OPEC’s vested interest in crude oil, there is some skepticism around OPEC’s forecasts,” said Tony Sycamore, a market analyst at IG in Singapore.
“Friday’s soft US consumer confidence numbers suggest that the resilience of the American consumer and the US economy will be tested as households run down their savings to combat higher interest rates and cost-of-living pressures,” he added.
Meanwhile, China’s May domestic crude oil production rose 0.6 percent on year to 18.15 million tonnes, according to data released by the National Bureau of Statistics on Monday.
Year-to-date output was 89.1 million tonnes, up 1.8 percent from a year earlier. National crude oil throughput fell 1.8 percent in May over the same year-ago level to 60.52 million tonnes, with year-to-date totalling 301.77 million tonnes, up 0.3 percent from a year ago.
The country’s May industrial output lagged expectations and a slowdown in the property sector showed no signs of easing, adding pressure on Beijing to shore up growth.
The flurry of data on Monday was largely downbeat, underscoring a bumpy recovery for the world’s second-largest economy.
On the geopolitical front, concerns of a wider Middle East war lingered after the Israeli military said on Sunday that intensified cross-border fire from Lebanon’s Hezbollah movement into Israel could trigger serious escalation.
After the relatively heavy exchanges over the past week, Sunday saw a marked drop in Hezbollah fire, while the Israeli military said that it had carried out several airstrikes against the group in southern Lebanon.
Markets in key oil trading hub Singapore and other countries in the region were closed for a public holiday on Monday.
Air transport industry improves baggage handling despite rising passenger numbers: SITA report
RIYADH: Baggage mishandling in the air transport industry has decreased to 6.9 bags per 1,000 passengers in 2023 from 7.6, despite increased passenger traffic, according to a new report.
According to the latest report from multinational information technology company SITA, this decrease marks a positive trend even as global passenger numbers exceeded pre-pandemic levels for the first time since 2019, reaching 5.2 billion.
This improvement underscores the industry’s strong adoption of technology, especially in automated baggage handling driven by artificial intelligence and computer vision technologies.
David Lavorel, CEO of SITA, noted that technology-driven solutions will play a pivotal role in managing the projected doubling of global passenger traffic by 2040.
He said: “Technologies like these are essential because they help us gather, integrate, and share data effectively. This means we can uncover important insights that make decision-making easier and more automated.”
Over the years, there has been a 63 percent decrease in mishandling rates from 2007 to 2023, despite a simultaneous 111 percent increase in passenger traffic. However, challenges remain, particularly in managing escalating baggage volumes, SITA said.
It highlighted that the industry’s focus on digitalization is crucial, with emphasis placed on enhancing data analysis capabilities and implementing automated systems for baggage handling.
SITA’s research highlighted growing passenger expectations for seamless travel experiences, including self-service options like unassisted bag drops and mobile-enabled journey tracking.
“Today, 32 percent of passengers rely on bag collection information sent straight to their mobile. Better communication and visibility for passengers will encourage more use of digital self-service and give passengers control over their journey,” SITA said.
Collaboration between airlines and airports is identified as key to further enhancing baggage handling efficiencies. While data sharing has improved, there is room for enhancement, especially in providing comprehensive, real-time baggage tracking throughout the journey.
Initiatives like the International Air Transport Association’s Resolution 753 and advocacy from Airports Council International underscore the industry’s commitment to achieving greater transparency and reducing passenger anxiety associated with baggage handling.
The report highlighted varying trends in baggage mishandling rates regionally, with North America and Europe showing notable declines over the years, attributable to increased investments in infrastructure and technology.
In contrast, Asia Pacific maintained the lowest mishandling rates globally, reflecting successful digitization efforts despite ongoing recovery challenges.
In conclusion, SITA’s findings highlight the air transport industry’s resilience and adaptability amid growing passenger demands.
By continuing to innovate and collaborate, stakeholders can build on these achievements to ensure smoother, more reliable travel experiences for passengers worldwide.
Technology shapes future of hospitality with enhanced guest experiences
RIYADH: The global hospitality industry is increasingly investing in technology to improve the guest experience, with artificial intelligence playing a key role in automating tasks like booking, check-ins, and housekeeping management.
In a recent report, The Bench, a publication by the Future Hospitality Summit, noted that implementing advanced technologies also enables 24/7 traveler support through AI chatbots and virtual assistants.
“The hospitality industry has continually been reputed to adapt slowly to technological advancements. Hospitality asset owners and investors are keen on ramping up technology investment,” said the report.
Citing a 2023 PwC analysis, the report noted that over 70 percent of hotel executives are prioritizing investments in technologies that streamline operations and elevate customer experiences.
“This growing focus is evident in the adoption of Customer Relationship Management systems and data-driven marketing strategies aimed at customer retention,” added The Bench.
According to the report, CRM systems are becoming a cornerstone in hotel operations, helping hoteliers manage and analyze guest interactions and data throughout the customer lifecycle.
FHS added that leveraging CRM systems could also help hotels improve customer service relationships, assist in guest retention, and drive sales growth.
It cited a Salesforce study, noting that CRM technology could increase sales by up to 29 percent and improve forecast accuracy by 32 percent.
“Data-driven market strategies supported by robust CRM systems enable hotels to tailor their marketing efforts to individual guest preferences, thereby increasing the likelihood of repeat business,” said the report.
Property Management Systems
According to the analysis, Property Management Systems like innRoad, Oracle, and Hotelogix are essential for maximizing revenues, increasing efficiencies, and enhancing guest understanding.
“These systems serve as the backbone of hotel operations, offering comprehensive functionalities that streamline various processes. From managing reservations and check-ins to overseeing housekeeping and billing, PMS solutions integrate all these functions into a single cohesive platform, making operations smoother and more efficient,” the report added.
The FHS publication also noted that technologies like TakeUp.ai leverage AI to analyze past guest behavior and competitors’ pricing, thereby optimizing revenues without reliance on guesswork.
“This approach provides hoteliers with a strategic advantage in a competitive market. AI-driven revenue management systems can predict demand with higher accuracy, allowing hotels to adjust prices dynamically and maximize revenues,” said the report.
It added: “These systems also help in identifying and capitalizing on market trends, ensuring that hotels remain competitive.”
The release highlighted that the hospitality industry is witnessing a shift in guests’ behavior, as most travelers expect a seamless, modern experience blended with technology.
“Guests now expect digital control over room environments, such as lighting, shades, and temperature, even in mid-range hotels. Additional basic additions like bedside USB-C ports, mobile key entry, and digital check-in contribute to a seamless and modern guest experience,” added the analysis.
Moreover, mobile key entry will reduce the need for physical keys and front desk check-ins, thereby streamlining the arrival process.
Post-pandemic market dynamics
According to the report, rising wages and worker shortages have accelerated the move toward automation and technology utilization in the hospitality sector.
“Automated check-ins, robotic room service, and AI-powered concierge services are just a few examples of how technology can mitigate labor shortages. These innovations allow hotels to maintain high service levels, even with reduced staff, ensuring guest satisfaction,” said the FHS publication.
With travel restrictions easing post-pandemic, the report highlighted that hotels are prioritizing technology to enhance operational efficiency and attract guests.
“This focus is vital in a landscape marked by intense competition. Technologies that enhance cleanliness and safety, such as contactless check-in and check-out and mobile room keys, have become particularly important. Hotels are also investing in digital marketing strategies to reach potential guests who are eager to travel again but are cautious about safety,” said the analysis.
Moreover, the hospitality tech sector is experiencing a surge in acquisitions as companies aim to consolidate and offer more comprehensive solutions to meet the diverse needs of hotels.
“This consolidation trend is driven by the need to provide integrated solutions that address multiple aspects of hotel operations. By acquiring or merging with other tech companies, firms can offer a broad range of services, from property management and guest services to marketing and revenue management,” added the report.
Discussing the challenges faced by the sector in implementing technology, the study highlighted that several hotels face the problem of outdated and siloed systems that hinder their efficient operations.
“The solution lies in adopting open API-based (Application Programming Interface) systems that facilitate the integration of various functionalities, thereby overcoming the limitations of legacy systems,” said the analysis.
The report also highlighted that using open API-based systems will enable seamless communication between different software applications, allowing hotels to integrate new technologies without overhauling their entire IT infrastructure.
Areas of untapped potential
The analysis highlighted that some untapped areas in the hospitality industry can be strengthened further using technology.
It added that many processes in the sector are still handled manually and should be automated using advanced technologies.
“For example, night audits, which involve substantial administrative work, can be automated to improve efficiency and reduce labor costs,” added the document.
Moreover, integrating a proper payment technology setup can enable hotels to offer more personalized and flexible experiences without relying on manual administrative tasks.
