Shares in UK technology firm Imagination Technologies have fallen by almost 70% after Apple, its largest customer, said it would cease using its products.
Apple’s decision will see Imagination Technologies lose out on lucrative loyalty payments as the US giant gears up to develop its own rival technology.
Imagination relies on Apple, which uses the company’s chip technology in its flagship devices such as the iPhone or iPad, for at least half of its revenue.
According to a statement, Apple told Imagination that it would “no longer use the Group’s intellectual property in its new products in 15 months to two years time, and as such will not be eligible for royalty payments under the current license and royalty agreement”.
“Apple has not presented any evidence to substantiate its assertion that it will no longer require Imagination’s technology, without violating Imagination’s patents, intellectual property and confidential information. This evidence has been requested by Imagination but Apple has declined to provide it,” the statement continues.
According to the Financial Times, Apple held acquisition talks with Imagination Technologies last year but eventually decided not to make an offer after reports of the potential transaction affected the UK company’s stock.
Despite the acquisition not going ahead, Apple is said to have hired several senior employees from Imagination as well as several engineers, in a move that was described to Business Insider as a “brain drain”.
The news comes after Imagination Technologies cut down jobs and reported its biggest ever loss in July last year.