One of the key factors in the performance of Apple iOS devices is the snappy graphics chips it uses. The PowerVR GPU is a product of British company Imagination. Now it appears that Apple is going its own way on GPU design and manufacture and Imagination is out in the cold.
The news was announced by Imagination Technologies as part of its duty to shareholders and the Stock Market in general. Apple consumes a disproportionate percentage of Imagination's output and the news has significant bearing on the company's long term financial prospects.
Imagination's stock is crashing. To the point where Apple could conceivably purchase the company for a song.
Whether it does or doesn't it has quite effectively gutted the company and left it open for a takeover from somebody.
In the meantime Imagination is making threats about patent abuse and the adoption of its technologies, without licensing fees, in the iPhone 9.
Seems likely this could go one of three ways. Imagination's market value is limited by the loss of its primary customer. One of Apple's competitors might choose to jump in and acquire the technology for re-use in its own products.
Alternatively Imagination could begin a lengthy and costly patent battle with Apple with a long payoff window and unclear chance of success.
Finally Apple may decide the value has dropped sufficiently for it to acquire it's former partner. The fact that it already owns 8% of the company suggests it could make a go of that option.
It's not unknown for Apple to cut the feet from under a partner or software developer. The concept even has its own urban dictionary entry. To be Sherlocked. In this case however there's the added frission of industrial espionage and a heavy dose of market rigging to be considered.
Or Apple just decided it could do a better job itself and junked an underperforming partner.