Though the severing of the ties between Apple and its graphics technology provider, Imagination technology, came as a shock to investors, the world’s largest publicly traded company has revealed that Imagination had known that the relationship would be ended for close to two years. According to a statement from Apple, Imagination Technologies was informed of the impending move in late 2015.
Last year, Apple then informed Imagination that the relationship between the two would be further diminished following the initiation of a clause in the contract which allowed the iPhone maker to pay smaller royalties for using less of the intellectual property Imagination owned. At the beginning of this year Apple told the graphics technology provider that the relationship was being ended altogether and that the Cupertino, California-based tech giant would stop making royalty payments early next year.
The statement by Apple, which was first provided to Bloomberg, is in contrast to the events timeline as communicated by Imagination Technologies. According to the chief executive officer of the graphics technology provider, Andrew Heath, Imagination Technologies was informed of the severing of ties in late March. Apple’s statement, indicated otherwise.
“We began working with Imagination in 2007 and stopped accepting new IP from them in 2015 … we advised them on February 9 that we expected to wind down our licensing agreement,” read Apple’s statement.
The accusations by Apple have served to escalate a dispute where Imagination Technologies will be greatly hurt since it obtains more than half of its revenues from the tech giant. Since Imagination went public with the information its shares have fallen by 41%. The graphics technology provider has indicated that it is looking to sell itself and even though Apple has a stake in the firm, it has not made an offer.
The reason Apple is severing ties is because it has developed its own proprietary graphics technology. While the graphics were previously used mostly in displaying apps and games, they are now being used to power augmented reality and artificial intelligence features. In an investor call Imagination’s chief executive officer questioned the ability of Apple to come up with its own proprietary graphics technology without making use of the supplier’s intellectual property.