The graphic iPhone needs a little Imagination

Apple has taken a small stake in a UK chip designer, revealing how the company plans to power the graphics in future iPhones and iPod Touches.

Imagination announced Thursday that Apple has acquired a 3.6 per cent stake in the company, which will cost Apple £3.2m. Imagination designs chip cores for a variety of applications but its most prominent designs are its PowerVR cores for graphics in mobile phones.

That is believed to be the source of Apple's interest in the company, according to AppleInsider, which has tracked Apple's interest in the PowerVR technology for some time. Earlier this year Imagination announced that an "international electronic systems company" had acquired a licence for the PowerVR graphics cores, and in Thursday's press release, Imagination said Apple was also a licensee.

The PowerVR cores will likely sit alongside the ARM-based processor core designs that the former PA Semi team is believed to be developing for future iPhones. Imagination has also signed a manufacturing licence deal with iPhone processor maker Samsung, perhaps a sign that Apple will continue to use Samsung as a manufacturing partner once the PA Semi designs are complete.

Original article: Apple buys stake in mobile graphics chip designer from CNET News.com