Apple's decision to drop Imagination Technologies as a supplier might seem like a ruthless move, but it underlines the technology giant's ongoing push to have more control over hardware which will have implications on its margins and ability to own new areas like augmented reality (AR) in the future. On Monday, Apple said it would be "reducing its future reliance on Imagination's technology" over the next 15 to 24 months. Imagination, a U.K. firm that designs graphics processing units (GPU), is a key part of Apple's products like the iPhone. The U.S. technology giant said it would be developing its own independent graphics design. Apple's move is hardly surprising given its recent history of trying to bring hardware design in house.

Tim Cook Adam Jeffery | CNBC

"One of Apple's successes has been built on the fact they tightly control all elements of hardware, software and services, it's a unique set of assets," Ben Wood, chief of research at CCS Insight, told CNBC by phone. "The performance advantages to owning the whole hardware stack are substantial." Protecting 'super-normal' margins Apple's relationship with suppliers hasn't always been easy and has sometimes been aimed at driving the cost of components down. In January, Apple filed a lawsuit against chipmaker Qualcomm accusing it of charging royalties for technologies "they have nothing to do with". Apple claimed Qualcomm was overcharging it for certain technologies. Analysts at Jeffries said in the case of Imagination, Apple could be playing the role of "bargaining bully" by walking away from the company in order to get the lowest royalty rate. CNBC did not receive a comment from Apple when it reached out regarding the Jeffries note on Tuesday. At the same time, Apple has been developing its own technology internally. In the iPhone 7 released last year, Apple showed off the A10 processor, a chipset it designed itself and not for the first time. Apple is also looking to move away from reliance on rivals too. The U.S. tech giant has reportedly ordered 70 million organic light-emitting diode (OLED) panels from Samsung for its upcoming anniversary edition iPhone. Given that Samsung has around a 90 percent share of the OLED market, Apple is unlikely to have had much room to negotiate on price, analysts said.