The fruity-cargo cult has told Imagination Technologies that it no longer needs its tech and it will be inventing its own GPUs from now on. The move left Imagination high and dry and forced its share price down the loo.

The only way for Imagination to keep its contracts with Apple is to offer huge price cuts on its licensing.

Imagination has allowed itself to become rather too dependent on Apple over the years which means that it is vulnerable to this sort of issue.

Now the company has started a "dispute resolution procedure" with Apple, its biggest customer, after not resolving a standoff over licensing between the two companies.

Imagination said in April that Apple had notified the British firm it was developing its own graphics chips and would no longer use Imagination's processing designs in 15 months to two years’ time.

But Imagination points out that Jobs' Mob has been using its tech since the days of the iPod, and it cannot really make its own gear without tripping over its patents.

The company said it been unable to make satisfactory progress with Apple on an alternative commercial arrangement for the current license and royalty agreement. In other words, Apple is either sticking to its guns and really wants to make its own chip, or Imagination is not cutting its prices enough.

Apple is expecting its iPhone sales to continue falling, and it needs to keep its margins down. Apple has taken a similar move against Qualcomm with the aim of getting cheaper licensing. 

Meanwhile Imagination also said it planned to sell two businesses, its embedded processor technology MIPS and mobile connectivity unit Ensigma.