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Apple sets Imagination free to go it alone with latest chip

James Titcomb
The iPhone GPU is used for high definition games and other activities - Bloomberg

Apple has cut its reliance on Imagination Technologies, the British microchip company that ended up in a public feud with the iPhone maker last year.

The US giant’s new iPhones, unveiled last week, boast an Apple-designed graphics chip independent of Imagination’s intellectual property.

For a decade, the graphics chips in Apple’s iPhones, which are used to process images and video, used technology designed by Hertfordshire-based Imagination, which was one of the UK’s most prominent listed companies.

But last year, it emerged that Apple planned to design its own graphics units instead. Imagination relied on royalties from Apple for around half of its revenue, and the news shares in the company plunging, raising questions about whether it could survive. 

Imagination, which had once held sale talks with Apple, was later bought for £550m by Canyon Bridge Partners, a private equity fund backed by the Chinese government.

Imagination had lodged a contractual dispute with Apple, questioning whether the US company was capable of designing graphics technology independent of Imagination’s own. Last week Apple said the graphics chip in this year’s iPhones had been designed completely by the company itself.

The chips in last year's had also been designed by Apple, but continued to use an Imagination Technologies system called tile-based deferred rendering. The new chip, which is 50pc more powerful than last year’s, has been improved to support high-definition games and augmented-reality features, in which virtual objects interact with the real world via the phone’s camera screen.

Imagination and Apple did not comment on the status of their dispute, or whether it had been resolved. Apple says it gave Imagination two years notice before last year to adapt to its plans. Apple continues to sell older versions of its iPhone and iPad that use Imagination-designed graphics technology. 

Since Imagination was bought, it has replaced its chief executive Andrew Heath with Leo Li, an industry veteran. It’s chief financial officer, former Tesco executive Jonathan Lewis, is also leaving the company.

Last year, Apple set up an office in St Albans, near Imagination’s headquarters. It recently posted several new job adverts for graphics hardware experts at the office.