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Nuclear waste will remain a deadly threat for hundreds of thousands of years. Despite having decades of hazardous waste in temporary storage, the world is only now finalising plans for long-term containment

Onkalo aims to solve the 100,000-year problem of nuclear waste storage

Nuclear waste will remain a deadly threat for hundreds of thousands of years. Despite having decades of hazardous waste in temporary storage, the world is only now finalising plans for long-term containment

Apple loses its Imagination

Shares in Imagination Technologies fell 70 percent in a single day as Apple cut its ties with the chipmaker
Imagination chips are currently used in all of Apple's flagship products, from the Apple Watch to the iPhone

Shares in Imagination Technologies fell 70 percent in a single day as Apple cut its ties with the chipmaker

On April 3, Imagination Technologies announced that Apple, its biggest customer, will stop using its hardware and intellectual property in devices such as iPhones, iPads and Apple Watches. Apple plans to have phased out Imagination graphics chips in about 15 to 24 months’ time, replacing them with its own in-house hardware.

“Apple has asserted that it has been working on a separate, independent graphics design in order to control its products”, Imagination said in a statement. Imagination’s share price fell 70 percent in a single day on the back of the news, to its lowest level since 2009. Its market capitalisation plunged from £754m to £290m.

Apple is a crucial partner for the UK firm, owning a 9.5 percent stake. Its £60m royalty payments last year accounted for about half of Imagination’s annual revenues. “The loss of this revenue stream will have a material impact on the financials of the company”, Investec analysts said.

Imagination is planning to talk with Apple about alternative future arrangements. If these fail, it could bite back on copyright grounds.

“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”, the company said. “Imagination believes it would be extremely challenging to design a brand new GPU architecture from basics without infringing its intellectual property rights.”

Apple is a crucial partner for Imagination. Its royalty payments last year accounted for half of Imagination’s annual revenue

Imagination had been doing well so far this year, launching graphics technology for self-driving cars, smartphones and virtual reality devices in March. It was even predicted a 25 percent share appreciation by investment analyst Jarnardan Menon of Liberum, thanks to this diversification.

The sudden nature of the revelation only adds to the blow. It remains to be seen whether Imagination will be able to rally itself for hardball negotiations and a potential legal campaign against the Silicon Valley giant. Apple regularly fights and wins against tough odds, having recently seen a patent ruling in China overturned that put its entire Chinese production operations at stake.

Imagination will struggle to recover from the break with its biggest partner, even if it wins in court. A scaling-back of operations could be on the cards in the short term as it steadies the ship. In any scenario, Imagination will struggle to regain the footing it had before April.