Apple says Imagination knew about end of PowerVR deal in 2015

Three months ago the share price of Imagination Technologies fell off a cliff as the company informed its investors that Apple will be dumping its PowerVR GPU technology within 15 to 24 months. At the time, Imagination acted surprised and said that Apple is unlikely to develop a mobile GPU that doesn't infringe on its patent portfolio and said it would explore potential alternative ways to license its graphics technology.

So far we've only heard Imagination's side of the story but now Apple fires back and its story alleges that Imagination mislead investors. The British technology company reportedly knew for nearly two years that Apple was winding down the relationship.

Apple explains to Bloomberg that it informed Imagination in late 2015 that it would not adopt the company's latest technology. The next year, Apple told Imagination it was further diminishing the relationship by initiating a clause in its contract to pay a lower royalty rate for using a smaller amount of intellectual property. This year in February, Apple send word it would no longer make any royalty payments as early as 2018. Imagination did not inform investors about Apple's decision until April 3.

“We began working with Imagination in 2007 and stopped accepting new IP from them in 2015," Apple said. "After lengthy discussions we advised them on February 9 that we expected to wind down our licensing agreement since we need unique and differentiating IP for our products. We valued our past relationship and wanted to give them as much notice as possible to adapt their future plans."

Imagination’s shares fell as much as 8 percent in London trading. The company said it disclosed the change of its relationship with Apple on April 3 "when it had sufficient clarity on Apple’s position." Imagination said it struck a multi-year licensing agreement with Apple in February 2014 that carried confidentiality clauses preventing it from commenting.

The timeline provided by Apple conflicts with Imagination's statement and will probably not sit well with disgruntled investors.