Apple ended an agreement with Imagination Technologies to use the company’s graphics technology in its iPhones and other products, in a move which could open up a patent row.
In a statement, Imagination said it received notification from Apple – the company’s largest customer – of its intention to stop using Imagination’s intellectual property (IP) in new products within the next 15 months to 24 months.
Imagination said Apple had used its technology and IP for many years as the basis of Graphics Processor Units (GPU) in Apple’s phones, tablets, iPods, TVs and watches, but the US giant had now “asserted” it was working on developing its own GPU “in order to control its products” and reduce reliance on Imagination’s technology.
However, the tone of the statement then changed, with the company stating it would be “extremely challenging” for Apple to design a brand new GPU architecture from basics “without infringing intellectual property rights”.
“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 company stated.
Imagination said it was now discussing potential alternative commercial arrangements for the current licence and royalty agreement, before stating it had “reserved all its rights in respect of Apple’s unauthorised use of Imagination’s confidential information and Imagination’s intellectual property rights”.
The company added it would make another announcement in due course.
Imagination’s earnings statement shows Apple paid £60.7 million in royalties to the company in the year to end-April 2016, and the figure is expected to hit £65 million in Imagination’s current fiscal year (to end-April 2017).
News of Apple’s plans led to Imagination’s shares tumbling by more than 60 per cent.
The Financial Times reported in 2016 Apple owns an 8 per cent stake in Imagination.