Apple Inc (AAPL) hit out at its supplier Imagination Technologies Group plc (IMGTY) Friday, July 7, saying the company knew the contract was coming to an end.
Imagination shares were down 5.4% in London, changing hands at 149 pence and extending an almost 40% fall over the past six months.
Imagination lost more than £500 million from its market value in less than 15 minutes after the shares plunged 70%, after it said in March that Apple would not be using Imagination's intellectual property in its new products in two years time and that it will not be eligible for royalty payments under the current license and royalty agreement.
However, Apple on Friday told Bloomberg that it had informed Imagination in late 2015 that it would no longer be buying the company's latest technology but that it would still use older systems.
Apple said that it then told Imagination in 2016 that it would further diminish the relationship by triggering a clause in the contract that allows Apple to pay a less royalties for using a smaller amount of intellectual property.
"We began working with Imagination in 2007 and stopped accepting new IP from them in 2015," Apple told Bloomberg. "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 said Tuesday that it was still in dispute with Apple. In May, the company said it had started dispute resolution proceedings with Apple over issues relating to intellectual property.
The company said it believes it would be "extremely challenging" for Apple to "design a brand new GPU architecture from basics without infringing its intellectual property (IP) rights."
Imagination in June put itself up for sale following Apple's move.
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