Apple is planning to develop its own graphics processing units (GPUs) for iPhones, iPads, and other devices -- ending its reliance on Imagination Technologies, the UK chip designer whose products currently help power Apple's hardware.
Imagination has a longstanding relationship with Apple. However, the Cupertino firm has informed its Hertfordshire-based supplier it intends to stop using its technology in new products, starting from 15 months' to two years' time.
Instead, Apple is working on its own GPUs, which it has told Imagination are based on a separate, independent graphics design, a move Apple said will help it control its own products and reduce reliance on Imagination.
In signalling the shift towards developing its own GPUs, Apple is following a path it has already taken in regard to the CPUs used in its devices. After tweaking the design of the ARM-based A-series SoCs (system-on-a-chip) used in earlier handsets and iPads, from the A6 onwards it moved to using fully customised chips that were designed in-house.
While Apple's decision to design its own SoCs was driven by the need for more processing power, there has been speculation that its decision to have greater control over the GPU is about making chips that are more both power-efficient and lower cost.
In a statement about Apple's plans, Imagination has questioned the US company's ability to develop its own chips without breaching 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," Imagination said.
"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," the company added.
The plans, detailed by Apple in discussions with Imagination over licence agreements, represent a big blow for the British firm as Apple is currently its largest customer.
Apple paid £60m in licence fees and royalties to Imagination this year and next year the UK firm expects to receive payments of £65m for the use of its products in Apple devices.
Imagination warns that it has "has reserved all its rights in respect of Apple's unauthorised use of confidential information and Imagination's intellectual property rights" and that a "further announcement will be made in due course".
While Apple is currently Imagination's biggest customer, its chip designs are also used in wearable devices, virtual reality headsets, cars, and consumer multimedia.
However, the blow of losing Apple as a customer has been reflected in Imagination's share price, which has crashed 70 percent to a seven-and-a-half-year low following Apple's announcement it will stop using the firm's designs. Imagination was valued at over £750m before today's announcement, but that value has now dropped to under £250m.
Apple owns an eight percent share in Imagination Technologies and previously held discussions about acquiring the firm, although the talks came to nothing.
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