“At this point, anybody with even a cursory interest in technology stocks has probably heard that Apple recently informed graphics specialist Imagination Technologies that it would no longer need to use its graphics intellectual property in future mobile applications processors,” Ashraf Eassa writes for The Motley Fool.

“Imagination has historically depended heavily on Apple for the bulk of its revenue (just over 50% in fiscal year 2016). However, it’s worth observing that this figure understates just how important Apple was to Imagination’s PowerVR graphics business,” Eassa writes. “In Imagination’s disclosure vis-a-vis Apple, the former said that in fiscal year 2016, PowerVR licensing and royalties from Apple totaled 60.7 million pounds (about $76 million) in revenue… What this means, then, is that Apple made up nearly 70% of Imagination’s PowerVR graphics revenue in the company’s prior fiscal year.”

Eassa writes, “If Imagination can’t work out some sort of serious technology/patent licensing arrangement with Apple, then it is extremely unlikely that the former will be able to continue to fund the development of its PowerVR graphics technology.”

Read more in the full article here.

MacDailyNews Take: As we wrote last week, “Custom hardware married to custom software is something Apple’s would-be rivals simply cannot match. Already, iPhone does far more with less RAM and less power than the Android iPhone knockoffs. The same with iPad vs. fragmandroid tablets. The gulf will only widen.”

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Why Apple’s ditching of Imagination is critical for the future of the iPhone – and maybe even the Mac – April 5, 2017
Apple aims for more control, less cost as it accelerates in chip design – April 5, 2017
Apple could look to buy Imagination Technologies after ditching the chip firm, share price plunge – April 4, 2017
Imagination Technologies’ shares collapse after Apple dumps UK chip designer – April 3, 2017
Apple nabs top talent from iPhone 7 GPU chipmaker Imagination Technologies – October 13, 2016
After failed takeover talks with Apple, Imagination Technologies sells stake to state-owned Chinese company – May 9, 2016
Apple in ‘advanced talks’ to acquire Imagination Technologies for PowerVR GPU – March 22, 2016