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Imagination Technologies shares plunge as much as 71 percent after Apple ends chip deal

Shares of U.K. chip designer Imagination Technologies fell as much as 71 percent Monday after Apple announced it will no longer be using its chips in its new products.

In trading Monday, shares were down 63 percent to 98 pence ($1.22). At one point, they skidded 71 percent, to 76 pence – their lowest point since 2009.

Shares closed up Friday at £2.70 ($3.38) prior to the news from Apple – its largest customer – that it is to stop using the chips in its products within 15 months to two years.

Imagination Technologies creates the technology for electronic chips, focusing especially on graphics, video and visual products. For several years, this technology has been used to provide the graphics in Apple's iPhone, iPad and iPod products; however, the California-based technology giant told Imagination that it is developing its own "independent graphics design" and will be "reducing its future reliance on Imagination's technology."

Imagination has noted that this development could breach the duo's current licensing agreement.

"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," Imagination said in a press release.

"This evidence has been requested by Imagination but Apple has declined to provide it."

Imagination said in its latest annual report that it has other licensing deals with customers, but described the Apple contract as "essential." The company relies on Apple for about half of its revenues.

The Financial Times reported last year that Apple, which owns 8.5 percent of the U.K. company, had held talks about buying Imagination.

Apple declined to comment on the latest development when contacted by CNBC.

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