Apple Dumps PortalPlayer Chip

Quash writes to mention a BusinessWeek article about Apple's decision to not use the PortalPlayer chip in a future version of the iPod nano. From the article: "PortalPlayer stock promptly shed $9.46, or nearly 42% of its value, and more than $220 million in market value. Apple generally doesn't discuss future products, nor its manufacturing or component supply strategies. It had no comment on the matter. But theories about who may have been the beneficiary of PortalPlayer's misfortune are abounding."

Comments

Why were they dumped?

[Whiney Mac Fanboy]

Interesting that this announcement from Apple came the quarter after PortalPlayer announced a new technology (called Preface) that's designed to work with Windows Vista only.

So - were they dumped for practical reasons or for punitive reasons? What do people think?

Onto a different aspect of this story - the company being touted as the most likely supplier of replacement chips is Samsung (allready a supplier of a good deal of ipod flash memory). Is it really wise for Apple to trust a competitor with components crucial to Apple's core business? (ipods are Apple's core business now).

Well, I guess Apple are happy doing business like this

Re:Why were they dumped?

[dsginter]

I think that we are close to seeing why Apple *really* switched to Intel. Put on your tin foil hat because I'm about to take you for a conspiracy theory ride:

1) Intel have been working with Ovonyx since 2000 on a technology called phase change memory (or PRAM, for short). Basically, PRAM uses chalcogenide - the same material used in rewriteable optical media - in a solid state RAM, only it is manipulated electrically, instead of optically. This gives the RAM nonvolatility and random accessibility. It is several orders of magnatude faster than flash (nearly as fast as DRAM) and has a write cycle endurance of 10^12 demonstrated as of about 4 years ago.

2) Intel patent applications have led me to believe that they have made great strides in the technology, while remaining very tight lipped. Here's some insight. Note that they are discussing the displacement of SRAM, DRAM and flash with this technology. Noteworthy, is the following:

[0058] Turning to FIG. 5, a portion of a system 500 in accordance with an embodiment of the present invention is described. System 500 may be used in wireless devices such as, for example, a cellular telephone, personal digital assistant (PDA), a laptop or portable computer with wireless capability, a web tablet, a wireless telephone, a pager, an instant messaging device, a digital music player, a digital camera, or other devices that may be adapted to transmit and/or receive information wirelessly. System 500 may be used in any of the following systems: a wireless local area network (WLAN) system, a wireless personal area network (WPAN) system, or a cellular network, although the scope of the present invention is not limited in this respect.

Now, here's where it all begins:

Envision, if you will, a high-speed, nonvolatile memory with very low power consumption. This enables the following:

1) Intel Robson Technology. This would answer the question of durability. Why would Intel demo such a technology if flash memory would wear out in short order? With PRAM, you've got CMOS compatibility so you can throw the whole deal right into the processor.

2) Ultra-low power wireless devices. Add Intel's Wireless USB and you've got the perfect medium to talk to your iPod. In addition, your gonna end up using it for more than just an iPod. Store your entire "desktop" on the damn thing, add some authentication mechanisms and you can use any wireless USB equipped PC to log into your "wireless personal server".

There's more, but this should be good for now.

Seems obvious

[joebooty]

The Nano got destroyed by suppliers not being able to provide product when the Nano oversold estimates. You will all remember how we were flooded with nano commercials at launch and then the commercials disappeared and so did the Nanos because Apple could not assemble any units to sell.

With this move Apple shifts from having a critical part supplied by a bit player to the part being supplied by one of the behemoths of the industry in Samsung.

Furthermore the Korean semiconductor companies are infatuated with marketshare. I am certain Samsung offered them a tempting deal as long as they were the singlesource.

Other Theories

[caramuru]

As an unhappy PortalPlayer stockholder, I have been reading everything I could find on the company since the news hit the street yesterday morning. The stock price has been driven down to less than two times the cash (on a per share basis) the company has in the bank - a very pessimistic valuation. Something not mentioned in the article is pricing. Some believe that either PortalPlayer has been too greedy or the new supplier (not known now) very agressively priced its chip. The new supplier might be Samsung, who already supplies flash memory for the iPod. Samsung could give Apple a "twofer" price on memory and processor. Another potential supplier might be Sigmatel. Until someone at Apple leaks the name of the supplier we will not know who the new supplier is. Apple employees, get busy! Doing business with Apple is not always a happy experience - ask IBM.

The reason they dumped PortalPlayer

[pslam]

...is because their chips were a buggy pile of putrid crap. Seriously I'm surprised they lasted this long. It's an underpowered chip by today's standards (ARM7TDMI? are they joking?), it's not the lowest power consumption available by a long shot, and they don't integrate enough peripherals to lower total product cost. They're years behind the competition now, and they have nobody to blame but themselves.

So, congrats to Apple for finally ditching them. You should all look forward to some better performing and longer lasting iPods in the future. Yes, I'm rather bitter from having to deal with the muppets at PortalPlayer in the past.