Shares in Imagination Technologies (LON:IMG) fell nearly 70 percent on Monday, after it announced that Apple would no longer be using their intellectual property in their new products.
The multimedia and processor company confirmed in a statement that Apple would stop using Imagination’s technology, which has formed the basis of Apple’s Graphics Processor Units for many years, in between 15 months to two years time. Imagination will no longer be eligible for royalty payments under the current license and royalty agreement.
However, Apple have not yet 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, despite requests from Imagination. Imagination have said they do not accept that Apple will be able to design a new GPU product without infringing its intellectual property rights.
Should Apple withdraw their custom is is likely to have a significant effect on Imagination’s business, taking with Apple license fees and royalties representing a revenue of around £60.7 million for the year ended 30 April 2016. The royalties are expected to be around £65 million for the year ending 30 April 2017.
Imagination shares are currently down 67.19 percent at 88.00 (0915GMT).