Imagination Technologies, the FTSE 250 business which designs graphic processor chips in Apple's iPhone, yesterday saw its shares crash 16 per cent to a three-year low, amid slowing smartphone growth and a slide in profits.
Licensing revenues – which come from clients who license Imagination's chip designs for future projects – remained weak, although they picked up from the previous six months.
Sir Hossein Yassaie, the company's chief executive, played down the slowing growth in sales of smartphones after the explosive increase of the past five years.
"This market shifted from zero to a billion units in the past five years – that rate of growth has been pretty dramatic," said Sir Hossein.
The firm claims to design around 50 per cent of all graphic-processing units in the smartphone market, including for market-leader Samsung.
"Now we're going from one billion to two billion, the rate of growth will be slower,"he added. "The high end is still growing but the mid-range and the low end is growing faster."
Sir Hossein insisted Imagination was still "on track" as it expands beyond graphics with low-power chips and connected technology, which can be used in household appliances and cars – dubbed the "Internet of Things".