Shares in UK chipmaker dive 60 pct after Apple ends contract

by Paul Elliott Abril 4, 2017, 0:14
Shares in UK chipmaker dive 60 pct after Apple ends contract

Imagination's statement then proceeds to almost but not quite (yet) threaten Apple with patent litigation.

Imagination responded to the news by saying that Apple had "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".

The dates suggest Apple will stop using the technology in the next 15 to 24 months, which would mean it could be ready for the new iPhone we see in September 2018.

'Imagination believes it would be extremely challenging to design a brand new graphics processor unit architecture from basics without infringing its intellectual property rights, ' it said. After this announcement from Apple, the share value of Imagination Technologies plunged as much as 69 percent.

Similarly, a British company called Imagination Technologies has long supplied some of the graphics technology at work internally in Apple devices.

About Making Comments on our Site: Patently Apple reserves the right to post, dismiss or edit any comments. However, it cannot be said as of now whether the tech giant will be able to get the same success in GPUs.

A share price collapse of this magnitude is hugely unusual for a listed company of Imagination's size.

In the year ending April 30 2016, the company's business with Apple represented revenues of £60.7m of the total £120m. Losing its largest customer would be a huge blow for Imagination, which is said to receive half of its revenue from Apple.

Where's the problem? If it happens, the existing license agreement between the two will end, and when the time comes, Apple will stop paying royalties to Imagination Technologies. The company's graphics IP is found in several of Apple's products, including its iPhone, iPad, iPod, and Apple Watch devices. Imagination Technologies competes with ARM in offering license designs to other companies. It had initiated talks regarding a full takeover but then decided otherwise.

Imagination Technologies, the British chip designer that provides PowerVR graphics processors for use in the iPhone and iPad, has said that Apple will no longer be licensing its technology in less than two years' time.


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