Apple follows Intel in grabbing extra Imagination stake

Apple has bought 2.2 million extra shares in UK chip maker Imagination Technologies for £3.14m.

The iPhone manufacturer now owns a 9.5 per cent stake in the company worth around £240m. Last December, Apple paid around £3.2m for a 3.6 per cent stake in the firm.

Apple is rumoured to be interested in Imagination's PowerVR cores sector for graphics in mobile phones. Reports this month said the new iPhone 3G S uses the SGX PI version of the chip to improve graphics performance.

But Apple may face problems if it is interested in purchasing sole rights to what looks like an increasingly important supplier.

In the last week, Intel increased its stake in Imagination to around 16 per cent, buying 30 million shares. Intel licenses Imagination's graphics and video IP cores for its PC and mobile computing architectures.

Analysts have said that the importance of Imagination to Intel and Apple has led them to buy as many stakes as they can to safeguard their future.

It is believed Imagination had to sell over 10 million shares because of the Saudi group Saad having to cut back its stake in the firm after its accounts were frozen by a government bank.