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Which Tech Company Is Apple Investing In?

Apple [AAPL] recently bought 8 million new shares in a little-known graphics technology company this week. That company, UK-based Imagination Technologies Group [LON:IMG], makes a mobile video technology that could give the iPhone 3G a boost over its competitors.

IMG's technology, PowerVR, is comprised of a "system-on-a-chip" processor that includes an advanced graphics core and video decoding technology. In April, IMG said it had a major electronics-maker ready to license its technology. Today, the mystery of who that electronics-maker might be has come to an end, after IMG announced Apple's investment.

So what has inspired Apple to own 3% of this company and its mobile graphics chips? According to AppleInsider, "Those parts will introduce OpenGL ES 2.0 support, along with a Universal Scalable Shader Engine that will provide mobile devices with highly efficient, shader-based 3D graphics." OpenGL, or Open Graphics Library, is an open API, or "application programming interface," by which software developers can develop 2D and 3G graphics. It competes with Microsoft's [MSFT] DirectX software, which only runs in Windows devices. OpenGL software can be written for Mac OS X, Linux and Windows.

OpenGL ES 2.0 support and a scalable shader engine will enable the iPhone to render graphics like a real computer does — that will give the device ground-breaking graphical abilities. That won't just apply to games, either, but to OS screen effects, 3rd-party apps, maps, and other facets of the interface. Desktop computers now use OpenGL 3.0, so this won't bring the iPhone quite up to speed with your MacBook. But it will mimic the graphics support of say, a PowerBook circa 2006.

Because the guts of smartphones are increasingly becoming commodotized — many have the same components, coming from the same companies — the next decade of smartphone-makers might have to distinguish themselves by software alone. In that case, PowerVR components should give Apple a hardware edge, too.

AppleInsider interprets the move as an effort to make the iPhone even more of a mini-computer, "enabling [Apple] to push its efforts in parallel processing and GPU acceleration from the Mac desktop into its mobile devices." That should allow the iPhone the potential for "all sorts of innovative applications for high performance, mobile devices that other companies can't match" with off-the-shelf parts.