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The power of the Apple: Apple will develop its own graphics chips; Imagination Technologies shares fall 70%

THE Imagination Technologies, the company that develops the graphics chips for iPhones, iPads, Apple Watches and Apple TVs, today announced that its main customer, Apple, will stop using its technology in iDevices over a period of 15 months to 2 years.

Imagination Technologies logo

In the statement, the company reveals that Apple decided this way because it plans to develop your own graphics chips, to “control your products and reduce your future dependence on Imagination technology”.

The announcement came as a bucket of cold water for the developer of the chips, for two reasons: the first is that, for each sale of a mobile device with its technology, it receives the royalties – that count for basically half of the company’s income British. That is, she will say “goodbye” to half of her income. The second reason is that, because of Apple’s departure from the game, Imagination’s shares plummeted an incredible 70% in a few hours.

Imagination Technologies actions

The company also says in the statement that it doubts that Apple can create a GPU structure without infringing any of its patents or intellectual property, but expects some position from Apple so that there will be future agreements regarding licenses /royalties.

Apple has not provided any evidence to support its claim that it will no longer require Imagination’s technology without violating Imagination’s patents, intellectual property and confidential information. This evidence was requested by Imagination, but Apple declined to provide it.

Apple’s notification prompted Imagination to discuss possible alternative commercial agreements with the company for the current license agreement and royalties.

For the time given, it is still uncertain whether Apple will use Imagination’s new GPU framework, the PowerVR Furian, which it would possibly bring to the new iDevices the possibility of having 4K resolution screens.

The relationship of the two companies was established around 2008, when Apple acquired shares of Imagination and, in 2010, the company’s chips started to equip Apple’s mobile devices.

In 2016, rumors arose that Apple would buy Imagination, but what happened was the hiring of several company specialists to join the Apple team.

Analyzing this timeline, it all makes sense now, doesn’t it?

[via Reuters]