Following Apple’s announcement that it expected to stop using Imagination Technologies’ GPU designs in iPhones and iPads within two years, UBS has put together a forecast of the financial impact.
UBS predicts that Apple will initially reduce the royalty rate it pays on each iPhone and iPad produced to just ten cents per device before ceasing payments altogether after two years …
Apple currently pays Imagination 30 cents per device, accounting for around two-third of the company’s income, reports Reuters. Without that revenue, UBS says that Imagination will make a loss.
Imagination lost two-thirds of its stock-market value on the news, and UBS calculates that the revised valuation the market places on the company is in the right sort of ballpark.
The chip designer is one of six companies said to rely on Apple for half to three-quarters of their revenues.
