Apple is reportedly developing its own graphics chip for its future iPhones.
The news came after British chip maker Imagination Technologies announced that Apple will no longer be licensing its technology for its products in the next two years.
Imagination has been providing PowerVR graphics processors for Apple’s iPhones, iPads and Apple Watches.
Imagination claims the iPhone maker makes up over half of the UK-based company’s annual revenue.
Shares of the British firm plunged by as much as 72 per cent when the news of Apple’s decision to shift towards making its own graphics chip broke out yesterday.
Apple owns an 8 per cent stake in Imagination Technologies.
Last year, The Financial Times reported that Apple had held talks with Imagination about a possible acquisition, but the plan was never pushed through.
If Apple decides to abandon Imagination, we could see new iPhones fitted with Apple’s A-series chips running both Apple-designed CPU and GPU, possibly by next year.
These fully Apple-designed chips are expected to compete with Qualcomm’s Snapdragon processors found on rival Android smartphones.
Apple has also considered designing its own chip for its future Mac computers, partly to improve power efficiency.
The company’s current desktop and laptop lineups are powered by Intel processors.
The tech giant has been relying on Intel processors for its desktop and laptop products since it transitioned from PowerPC processors (created by the Apple-IBM-Motorola alliance) in 2006.