Apple buys chip maker P.A. Semi

The big announcement of today is that Apple has acquired chip designer P.A. Semi for $278 million. This 150-person firm designs low-power processors which Apple may use in future ultraportable devices.

There's some chatter that Apple is going to use chips from P.A. Semi for its iPhone but Beyond3D says that's not possible because these chips use way too much power and don't have integrated multimedia capabilities. The site speculates Apple may use chips from P.A. Semi in devices like the Mac Mini, MacBook Air, the rumoured Apple Tablet PC or for more embedded applications such as the Apple TV.

So clearly this acquisition isn't for the iPhone or the iPod, except perhaps in the very-long-term with a different processor architecture developed by the same team. Which doesn't seem very likely either; they'd need to integrate multimedia capabilities on the same chip and so forth, so effectively Apple would be designing the entire system except the baseband. They'd be competing with a proprietary solution against every single handheld SoC manufacturer in the world. Once again, nonsense!

So what's the point behind the acquisition, then? Well first of all, it likely represents a complete rejection of Intel's Atom architecture for ultraportables and mobile devices between the iPhone and the Macbook, such as a previously rumoured Apple Tablet PC. Secondly, it also represents a possible rejection of Intel for more embedded applications such as the Apple TV. And finally, it might mean trouble for Intel in the Mac Mini and Macbook Air segments of the market.

Those who claim this represents a 'missed opportunity' for Intel with its Atom architecture are completely missing the big picture; this isn't just about new business Intel might have captured. It's also about existing business they're likely to lose now, and obviously the financial consequences of that are more problematic.