The Kings Langley company that designs the iPhone's graphics chip has been dealt a colossal blow with Apple telling the group that it plans to stop using the technology.

Imagination Technologies, based in the Home Park Estate, announced this morning that Apple plans to stop licensing its designs within two years and that the US tech giant will develop its own technology.

Imagination's PowerVR graphics technology has been used in the graphics processing units (GPUs) of the iPhone, iPad and iPod for years and Apple is the British company's biggest customer, responsible for around half of its revenues.

Shares in the company fell by more than 60 per cent following the announcement.

The companies have been closely linked for years, with Apple holding an eight per cent stake in Imagination and at one point considering a takeover of the Hertfordshire-based group.

Apple has been quietly hiring Imagination staff amid rumours that it wants to develop its own graphics technology, a move that was confirmed on Monday.

Imagination said Apple expects to introduce its own technology in 15 months to two years' time, suggesting that it will do so in next year's iPhone, likely to be released in September 2018.