Apple wants to develop its own GPUs – Imagination Technologies upset by the news

- Adrian Ungureanu

Imagination Technologies shares plunged by nearly 70 percent on Monday, after Apple informed the British firm that it plans to stop using its graphics technology in Apple consumer devices in up to two years’ time.

The news delivered a major blow to Imagination Technologies, which traditionally provides the PowerVR graphics architecture found in Apple’s full range of iOS devices and receives a small royalty on every sale, which amounts to up to half of the British firm’s revenue.

Also it was an unexpected move as late last year it was reported Apple was in “advanced talks” to acquire the British chip maker. Despite confirming the talks, Apple subsequently decided not to make a buyout offer, but several Imagination employees were recruited by Apple as part of its efforts to build an in-house graphics team.

In a press release posted on the company’s website, Imagination said it doubted that Apple could go it alone without violating Imagination’ patents, intellectual property and confidential information.

”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. 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”, stated the British company in a press release.

Fortunately, the press release made its job to settle the investors. At the beginning of the day the shares dropped more than 70 percent, to a eight-year-low, around 77 pounds, but after the press release the share went up again, to a high of 106 pounds, that settle around 92-93 pounds per share in the second half of the transaction session.