The company reportedly wants to develop its own graphics processor units (GPU) for use in the iPhone, iPad, iPod and other products.
Apple will stop using Imagination’s technology over the next 15 months to two years.
Imagination said Apple has been working on a “separate, independent graphics design in order to control its products and will be reducing its future reliance on Imagination’s technology”.
But Imagination said that it will be difficult for Apple to create its own technology without violating Imagination’s intellectual property rights.
“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.”
“This evidence has been requested by Imagination but Apple has declined to provide it.”
Imagination said it is in discussions with Apple on alternative commercial arrangements for the current licence and royalty agreement.