Imagination had been leaning heavily on Apple lately and depends on it as its biggest customer. It is also unclear what Apple is going to do about its graphics technology.
It looks like Apple is trying to slash costs by bleeding its suppliers. It is widely expected to see interest in its iPhone declining and has been putting the thumbscrews on its suppliers to keep its margins and profits up.
Apple paid Imagination license fees and royalties totalling £60.7 million for the year to the end ofApril 2016, half of its total revenue, and is expected to pay about £65 million pounds for this year, Imagination said.
Imagination said Apple had not presented any evidence to substantiate its assertion that it will no longer need Imagination’s technology, without violating Imagination’s patents, intellectual property and confidential information.
Apple’s notification had triggered talks on alternative commercial arrangements for the current licence and royalty agreement.