Shares in Imagination Technologies (IMG) have crashed after its biggest customer Apple (AAPL.O) said it would stop using the chip maker's products.
Imagination lost two-thirds of its value, with its shares plummeting 65% to 94.5p on the shock news that Apple would stop using its graphics technology in the iPhone and other products in up to two years' time.
The news represents a hammer blow to Imagination's business, with the chip maker relying on Apple for around half its annual revenue. Last year Apple royalty payments totalled £60.7 million, with a further £65 million expected this year.
Imagination was sceptical that Apple would be able to develop its own processors with no reliance on its technology.
'Imagination believes it would be extremely challenging to design a brand new graphics processor unit architecture from basics without infringing its intellectual property rights,' it said.
'Apple has not presented any evidence to substantiate its assertion that it will no longer require Imagination's technology, without violating Imagination's patents, intellectual property and confidential information.'
The news represents a blow to Tom Dobell, manager of the M&G Recovery fund, who holds 7.6% of the company's shares, according to Thomson Reuters data.
Other major investors include Wesley McCoy, manager of the Standard Life Investments UK Equity Unconstrained fund, who holds 4.2% of the company, and Mark Costar, JOHCM UK Growth manager, who holds 1.2%.