BRITISH CHIP DESIGNER Imagination Technologies has seen its shares dive after announcing that Apple will no longer be using its PowerVR graphics tech inside its iPhones and iPads.
Imagination said in a statement on Monday that Apple plans to stop licensing its designs within '15 to 24 months' in favour of developing its own graphics chips, hinting that next year's iPhone could be the first to feature an A-series chip with both a fully Apple-designed CPU and GPU.
"Apple working on a separate, independent graphics design in order to control its products and will be reducing its future reliance on Imagination's technology," the firm said.
This news is a major blow for Hertfordshire-based Imagination Technologies, which currently relies on Apple for about half of its revenue and will likely stop receiving royalties on iPhone and iPad devices within the next two years.
Apple also holds more than 8 per cent of the company, and this time last year speculation was rife that the firm was planning to purchase the Brit chip maker, with the deal said to have been in the "advanced stages."
Imagination isn't going to take Apple's decision lying down, though, and has warned that the firm risks infringing its intellectual property rights by developing its own graphics chips.
"Apple has not presented any evidence to substantiate its assertion that it will no longer require Imagination's technology, without violating Imagination's patents, intellectual property and confidential information. This evidence has been requested by Imagination but Apple has declined to provide it," it said.
"Further, Imagination believes that it would be extremely challenging to design a brand new GPU architecture from basics without infringing its intellectual property rights, accordingly Imagination does not accept Apple's assertions."
The firm also noted that it is discussing "potential alternative commercial arrangements" with Apple.
Following the announcement, shares in Imagination Technologies have slumped almost 70 per cent. µ
Flagship will launch a day early to avoid being 'overshadowed' by Apple
EC says merged entity will 'continue to face significant competition'
Alexa, give me a reason to be cheerful about the UK economy
No, it isn't 1 April