British chip-set manufacturer Imagination Technologies has seen its shares plummet after Apple announced it was ending its partnership.
Imagination’s shares fell by more than 60 per cent, from 165p to 102p, which valued the company at around £250 million – down from £765m.
The company’s chip technology is currently used in Apple’s iPhones, tablets, iPods, TVs and watches, with Apple being its “largest customer”.
Apple informed the firm that it would stop using the chips in around 15 months to two years, as it is developing its own independent graphics design, reducing its future reliance on Imagination’s technology.
However, Imagination has hit back claiming it would be “extremely challenging” to design new Graphics Processor Units (GPU) that didn’t infringe on its intellectual property rights.
In a statement, Imagination 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 termination of contracts would also mean that Imagination would not be eligible for royalty payments under the current licence and royalty agreement.