Apple is quite popular around the world for making its own mobile processors, and now, it looks like the tech giant will be designing its own graphic chips as well. Thus, the U.S. firm will soon dump its Britain-based graphic chip designer, Imagination Technologies.
A big loss for Imagination Technologies
In a statement, Imagination Technologies, which supplies PowerVR graphics processors for the iPhone, said that Apple had notified it that it is “working on a separate, independent graphics design in order to control its products and will be reducing its future reliance on Imagination’s technology.”
Imagination’s PowerVR graphics technology has been used in the GPUs of the iPod, iPhone, Apple Watch and iPad. Imagination Technologies’s statement means we can expect to see A-series chips on the iPhone with both Apple-designed GPUs and CPUs as early as next year.
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Apple is the British chip company’s biggest customer, accounting for about 50% of its total revenues. Hence, Apple’s decision to make its own graphic cards is a huge jolt. Imagination’s shares dropped by about 60% following the announcement on Monday morning.
The company said that the tech giant paid licensing fees and royalties of around 60.7 million pounds for the year that ended in April 2016 and is expected to pay about 65 million pounds for this year. The Verge notes that the chip company will stop getting royalties on the iPad and iPhone devices that will be launched within 15 to 24 months from now.
Will Apple be able to mange on its own?
Apple and the Britain-based company have been linked closely for several years, with the U.S. firm owning more than 8% of the company. There was a time when the Cupertino-based company was said to have considered acquiring Imagination Technologies but later decided against a complete takeover. However, MacRumors reported later that the tech giant had hired a number of engineers from Information Technologies, probably to start its graphics project.
It cannot be denied that the iPhone maker has found immense success in the CPU designing field, with its ARM-based processor cores superseding those of rivals. However, it cannot be said as of now whether the tech giant will be able to get the same success in GPUs. The British company is skeptical that the tech giant will be able to build chip technology on its own.
Imagination Technologies said the iPhone maker had presented no evidence to substantiate its assertion that it will not require its chip tech anymore, “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, the British company said it would be difficult for Apple to design a brand new GPU architecture from the ground up without infringing upon its intellectual property rights. The chip maker also said it is discussing new potential commercial arrangements with the Silicon Valley giant.
On Friday, Apple shares closed down 0.19% at $143.66. Year to date, the stock is up more than 24%, while in the last year, it is up almost 31%.