Imagination Technologies starts dispute with Apple over graphics chips

British chipset firm Imagination Technologies is having a tough quarter. After announcing that Apple is about to end its relationship with its supplier, the company is now starting the dispute process according to a statement sent to Reuters.

Imagination Technologies has worked for many years with Apple on graphics chipsets. Its designs have been essential to the iPhone and iPad graphical capabilities. But Apple thinks that it can’t rely on a third-party company for such a crucial part of its iOS devices.

That’s why Imagination Technologies announced that Apple had notified them that the American company was starting to design its own graphics chips. This process could take years. But as Apple represents roughly half of Imagination Technologies’ revenue, this is going to affect its bottom line.

Apple is an Imagination Technologies shareholder, making this move even more surprising as the company said last year it didn’t plan on making an offer to acquire Imagination Technologies.

Imagination Technologies believes that Apple won’t be able to design its own graphics chipsets without infringing some patents. So the company wants to get licensing revenue from Apple even if it stops using Imagination Technologies’ designs.

“Imagination has therefore commenced the dispute resolution procedure under the licence agreement with a view to reaching an agreement through a more structured process,” the British firm told Reuters.

This could be a matter of life and death as Imagination Technologies shares have been down roughly 65 percent since Apple announced its intentions.