Apple is developing its own graphics technology for iPhones, iPads and watches and will soon stop using PowerVR graphics processors made by British chip designer Imagination Technologies, Apple’s largest customer.
In a statement issued late on Monday, Imagination said that Apple has notified them that it will no longer use the Group’s intellectual property in its new products in 15 months to two years time.
The development led to shares in Imagination Tech crashing more than 70 per cent. The company was valued at more than $2.5 billion in 2012.
Apple has used Imagination’s technology and intellectual property for many years. It has formed the basis of Graphics Processor Units (GPUs) in Apple’s phones, tablets, iPods, TVs and watches.
“Apple has asserted that it has been 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 British firm said in a statement.
The development is bad news for Imagination, which gets about half of its revenue from Apple. It will stop receiving royalties on iPhone and iPad devices soon, media reports said.
“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,” the statement further added.
Imagination thinks 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.
“Apple’s notification has led Imagination to discuss with Apple potential alternative commercial arrangements for the current license and royalty agreement,” the company said.