The company announced a widening half-year loss for the first six months of its financial year back in December and has announced it expects a loss for the full year. The company has also been talking about putting its Pure equipment subsidiary up for sale.
The company blames a slow down in the semiconductor market and lower than expected royalties from key customers but it is Imagination's high level of exposure to the faltering smartphone market and the rise of rivals, notably ARM Holdings plc, that has cast Imagination into trouble and Sir Hossein out of a job.
ARM – selling Mali graphics cores alongside its Cortex-A series of processor cores – has been able to compete and outsell Imagination in the graphics space even though Imagination is still acknowledged as world-class in graphics with its PowerVR line of GPU cores.
Imagination's acquisition of MIPS Technologies Inc., an already stuttering US licensor of processor cores, in December 2012 has not produced the turnaround required and if anything validated the use of the comparison of Mali-Cortex from ARM versus PowerVR-MIPS from Imagination, to Imagination's disfavor.
Sir Hossein joined the company, at that time called VideoLogic Ltd., as chief technology officer 18 years ago. He had previously been with STMicroelectronics, and then oversaw the birth of the IP core licensing market and Imagination's ability to lead it in terms of graphics processing unit (GPU) cores.
High quality graphics were becoming a primary means of differentiation in consumer electronics and although profits were slow to come the company steadily built its base of licensees. At one point as the economic crisis of 2008-2009 it was obliged to take bail out money from two leading licensees; Apple and Intel (see Apple injects $8.2 million into Imagination and Intel increases stake in graphics cores provider ).
Such high-profile clients and backers seemed to protect Imagination and it went on to report profits but