Tony King-Smith, VP Marketing at Imagination Technologies
Hertfordshire-based Imagination Technologies Group plc (LSE:IMG) – a global leader in multimedia and communication silicon technologies – creates and licenses processor cores for graphics, video, multi-threaded embedded processing/DSP and multi-standard communications applications.
Backgrounder: Target markets include mobile phone, handheld multimedia, home consumer entertainment, mobile and low-power computing, and in-car electronics. Its licensees include many of the leading semiconductor and consumer electronics companies.PURE, the world-leading radio maker, is a division of Imagination. PURE is the world’s leading manufacturer of broadcast and internet-connected digital radios and the number one supplier of digital radios in Europe. Tony has a long career in the semiconductor and embedded systems industries, holding senior engineering management positions in multinational industry leading companies including Panasonic, LSI Logic, Renesas, INMOS and British Aerospace. He holds a 1st class honours degree in Electronics & Electrical Engineering from the University of Melbourne, Australia. In his current role as VP Marketing, he has particular focus on ensuring all technology products from Imagination address key market trends, and have extensible architectures to ensure success in mainstream medium to high volume markets.1. What are the biggest challenges you currently face as a business?UK companies are very strong in a global market increasingly dominated by large companies primarily based in USA or Far East. We feel much more should be done by the UK to leverage the tremendous intellectual prowess here – after all it has been recognised by every leading semiconductor and OEM (original equipment manufacturer) worldwide. We have a tremendous collection of highly innovative small start-ups in silicon, software and systems engineering that if correctly nurtured could make a significant contribution to the UK’s future.2. What are your plans with regard to geographical expansion?We are in 10 countries right now and we are focused on expanding our teams in those territories. We’ve recently added to our operations in Korea, Japan, India and China, for example. In the UK we have sites in the south east, the north and in Wales. We often joke that we’d like to find a suitable addition to the company in Ireland or Scotland!3. What challenges do you face in attracting the right calibre of engineers?The availability of suitable candidates is the main challenge to our growth. We have taken on around a hundred people over the past 12 months but would have liked to add more. In order to continue to expand that capability we need engineers at all levels and to that end we have excellent graduate and apprenticeship schemes and remuneration deals that include share-participation in the company’s success. We would consider the acquisition of small highly-skilled companies, as we have in the past, to speed growth.4. What was the rationale for your recent investment in Audioboo - how does it fit into your overall strategy?Imagination has a history of investing in interesting start ups. We think it’s important that we continuously innovate by doing highly strategic investments that complement our own capabilities. To that end we’ve also previously invested in Frontier Silicon and Toumaz in the UK and Green Plug in the US. 5. What was the key to your dramatically improved financial performance in your last set of results?The investment we’ve put in over the last few years to achieve major design wins is now coming to fruition. The continued strong volume ramp of devices using our technologies, the growing interest in, and customer commitment to, our broadening portfolio of offerings and PURE’s improving performance, have resulted in record full-year revenues and profits.
We know that our technologies in multimedia, connectivity, broadcast and embedded processing offer unique and significant advantages to our partners. Our technologies have been instrumental in many of the key recent market trends and have been shipped in well over 300 million devices across numerous end-user product categories.Also PURE managed to significantly improve its financial performance whilst maintaining its market-leading position and a strong R & D programme underpinning a long-term strategy. 6. What are the pros and cons of having both a licensing business and a product business?Our technologies are designed with the latest trends and market needs in mind and, in fact, they often become drivers for change, progress and advancement. In order to have that insight into new markets we need to engage closely with consumers.
Our PURE product business enables us to keep close to consumer trends as well as understand the realities of running a market leading OEM. It also has created new IPs which have fed back into our licensing business. What is more, PURE is a leader in its markets in terms of sales as well as innovation and we expect it to continue to be a major source of revenue as it expands both overseas and into new markets.7. In which of your market sectors are you seeing the best growth currently?TV and set-top-box are very much on the rise, with in-car and navigation closely behind. That said the main segment for us remains mobile: smartphones look set to displace feature phones in consumer affections and there are several new markets like netbooks and tablets in which we are very well positioned. 8. What effect is the recession having on your business?The macro-economic conditions, which have touched every business and every person, continue to be a challenge. Thankfully, we are predominantly engaged in new markets that are still growing rapidly, or segments in established markets that are going through massive transitional growth – though there is less momentum than there would have been if there’d been no recession.
History tells us that future winners in our industry are those who design themselves out of a recession – fortunately a good number of our key licensees share that view with us.We have also seen that the public’s appetite for purchasing compelling new technologies does not abate significantly compared to other goods, giving us confidence that our grass roots technologies are less susceptible to economic change than some businesses.
9. What do you see as the long term drivers of growth for the business?The main driver for our growth is our ability to develop roadmaps for long term engagement with our customers. An increasing proportion of our licensing is with existing customers who see us as a long-term strategic partner. And, of course, increased licensing engagements lead to more chips shipping with our technology in, and those high volume shipments are the major contributor to our bottom line. We expect to see around 200m units shipped by our partners, and used by the world’s leading branded OEMs, this year. 10. How important has your East of England location been in the success you have achieved to date?The presence of several major airports is no hindrance but the main thing is that I don’t think you can underestimate the value of having a pool of skilled engineers available. The East has been a major contributor in that respect with engineer pools from Cambridge, the M4 corridor and London available for recruitment – as has our Chepstow site which taps into another major cluster of engineers in Bristol.