According to a statement dated April 3 on Imagination Technologies website, Apple Inc. (NASDAQ:AAPL) will be reducing its reliance on the company’s technology and expertise, and will move Graphical Processing Unit (GPU) design and manufacture in-house in 15 months to 2 years’ time.
Imagination Technologies has provided the goods for GPUs in iOS devices, TVs, and watches, and it has profited greatly from this partnership with Apple: in financial year 2015-2016, Imagination Technologies generated more than $75 million from Apple products in revenue and royalties, and they expect to top that figure and generate more than $81 million in 2016-2017.
The contribution to its revenues from Apple products and their significance can be gauged from the fact that after Imagination Technologies released the statement on its website, the value of Imagination Technologies Group PLC fell more than 60 percent on the London Stoke Exchange; from 268.75p to 84p in just the matter of a weekend. Although they have recovered to around 100p, but it still represents a heavy fall from grace after the news of Apple pulling out its business.
The alternative for Apple, as mentioned in the statement, is that the Cupertino company is looking to move the design and manufacture in-house in 15 months to 2 years’ time, after which it will no longer use Imagination Technologies’ intellectual property. That last part could be trickier than many expect it to be, and it was also stated so by the Group, as it is going to be difficult for Apple to design its GPUs from scratch without infringing upon their patents.
In the past, Apple has poached a number of Imagination Technologies’ GPU architects and designers, and they could now come in handy after the company has seemingly decided to design the necessary technology themselves. But it will certainly not come easy to the iPhone maker, and a possible legal battle over intellectual property with Imagination Technologies might also be in the offing.