Tech Rumor of the Day: Intel

Two huge design wins have put Imagination Technologies Group on the investment radar.

The Kings Langley, U.K., tech shop makes graphic and video chips for smartphones, and recent dissections of the new Apple ( AAPL) iPhone S and Palm ( PALM) Pre reveal that Imagination is inside.

Winning the key slot in the two hottest phones of the moment certainly hasn't hurt the company's stock, which trades on the London Stock Exchange. Imagination shares are up 30% this month.

But part of that run is due to increased interest from Intel ( INTC).

On Thursday, Intel acquired 25 million shares of Imagination, taking its original 3% stake to 14%. Intel has been a licensee of Imagination technology and has said it "values its continued relationship" with the company, signaling it has no immediate plan to buy the company outright.

With computing shifting to smaller mobile devices, Intel has struggled to keep up with the trend. But recent deals, like the $884 million offer for Wind River ( WIND), a smartphone software management shop, show Intel has been looking externally for help.

Imagination certainly would give Intel a strong position in the mobile device market. But Intel may have some competition. In December, Apple acquired a $5 million stake in Imagination.

More from Technology

Facebook Takes Aim at YouTube, But It'll Be an Uphill Online Battle

Facebook Takes Aim at YouTube, But It'll Be an Uphill Online Battle

Microsoft Chief Says Its ICE Contract Isn't Part of Child Separation Policy

Microsoft Chief Says Its ICE Contract Isn't Part of Child Separation Policy

Immigration, Instagram and Oil - Here's What You Can't Miss Wednesday

Immigration, Instagram and Oil - Here's What You Can't Miss Wednesday

What Will GM Do With Cruise -- and Is Its Stock Worth $55?

What Will GM Do With Cruise -- and Is Its Stock Worth $55?

3 Warren Buffett Stock Picks That Could Be Perfect for Your Retirement Portfolio

3 Warren Buffett Stock Picks That Could Be Perfect for Your Retirement Portfolio