Shares in British chip designer and Apple supplier Imagination Technologies have plummeted more than 60% after revealing the US giant has said it will no longer use its products.
Imagination said on Monday that Apple, its largest customer, will no longer use the group’s intellectual property in its new products in 15 months to two years’ time, and therefore it will not be eligible for royalty payments.
Investors reacted badly to the news, with shares in the Hertfordshire-based group dropping 64% to 95p shortly after the market opened.
Imagination said: “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.”
It added that Apple has “not presented any evidence to substantiate its assertion that it will no longer require” its technology, without violating its patents.
The statement continued: “This evidence has been requested by Imagination but Apple has declined to provide it.
“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.
“Apple’s notification has led Imagination to discuss with Apple potential alternative commercial arrangements for the current licence and royalty agreement.”