Imagination technologies is going though the unimaginable right now given that Apple has served an ultimatum it won’t use the former’s expertise anymore.
Apple just let it be known that they won’t license the UK-based firm’s technologies in any of its future products in about two years’ time from now. It is not that Imagination Technologies didn’t see it coming but is learning the tough lesson of having all, or most of your prized eggs in a single basket.
Apple continued to be the UK-based firm’s biggest and sole partner. Imagination had tried to diversify into other segments or set up partnerships with other firms though all of that had come to naught.
Both companies saw their shares drop around 70 percent though it is Imagination that might have to face the brunt more than Apple. More than half of Imagination’s revenues come from Apple.
The Cupertino giant stated they are working on its very own graphics design that would see implementation in its future products; hence the impending disassociation with Imagination. As things stand right now, technologies provided by the English firm controls the graphics on almost the entire range of Apple products, which includes iPhones, iPads, iPods, watches and TVs.
Imagination, however, has stated they hope to work around the situation and come to a mutually acceptable solution that takes care of both the partner’s interest. Many also believe the above could be a ploy on the part of Apple to force Imagination to be more accommodative so far as the royalties are concerned. The British firm right now receives a small royalty on the sale of every Apple device. The firm has been collaborating with Apple since the first iPad was rolled out back in 2010.
A legal battle too could be brewing as Imagination believes it would be extremely challenging for Apple to develop its own workable solution without infringing on Imagination’s patents. The English firm even asked Apple to furnish details of its own graphics solution ready with zero input from Imagination, about which Apple is yet to respond.
Imagination meanwhile tried to tap into the booming mid-range smartphone market and even tried to partner with Chinese manufacturers though not much has come out of it as yet. The company saw its revenue boom around the 2009 and 2012 period when Apple and Intel picked up stake in the firm. Now with the fortunes reversed, Apple too could be hurting as it owns 8 percent of Imagination’s shares.