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Even though Apple has acquired a chip designer and can now develop its own processors for its devices, some analysts believe that next-generation Apple iPhone handsets will be powered by Intel Atom central processing units (CPUs).

JoAnne Feeney, an analyst with FTN Midwest research company, said in a note that Apple iPhone based on Intel Atom processors is due in 2009 or 2010. Ms. Feeney believes that Intel Atom CPUs manufactured using 32nm process technology will find its home inside future multimedia phones by Apple and will be able to lower the manufacturing cost of the device amid increasing performance without substantial increase of power consumption.

The analyst notes that the Apple iPhone 3G is expected to use a customized Samsung application processor along with baseband, RF and GPS chips from Infineon, reports Barron's web-site. According to Ms. Feeney, the Samsung chip will cost Apple approximately $13.50 apiece. In case Apple can sell 25 million iPhone devices, Intel could generate incremental revenue of $250 million for Intel provided that Apple will use the least expensive Atom chip.

Earlier this year Apple acquired PA Semi, a designer of Power-architecture microprocessors with whom Apple already held talks several years ago. According to unofficial information, Apple paid $278 million in cash for PA Semi, but there are no direct or indirect proves for this.

PA Semi was founded in 2004 by Dan Dobberpuhl, who earlier designed Alpha and StrongARM processors at Digital Equipment (DEC) back in the nineties. The company employs engineers from Advanced Micro Devices, Intel Corp. and Sun Microsystems who have a lot of experience in creating advanced microprocessors.

Analysts from Gartner believes that Apple could easily implement the PowerPC architecture in future products, but it will probably take several years to introduce the appropriate designs since current products by PA Semi will hardly satisfy the company’s clients in terms of performance, whereas development of highly-integrated system-on-chip (SoC) implementations may take up to several years, the market research firm believes. Apple will need to re-architect PA Semi’s products by "rebalancing the I/O and adding a graphics controller, creating low-cost, low-power chips" that enable new features and price points for wireless devices.

It is interesting to note that frequent changes of microprocessors - from current ARM to x86 and to PowerPC - will hardly make applications development for Apple iPhone easier, hence, popularity of the platform among software creators may be compromised.

Apple or Intel did not comment on the news-story.


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