Chip vendor PortalPlayer
has been dealt a severe blow by Apple, as the
computer company has apparently decided not to use PortalPlayer's media processor in some next-generation iPod models.
PortalPlayer has been working on a successor to its PP5021 chip, but the company says Apple will not be using it in new
high-end and midrange flash models. However, PortalPlayer expects (or is that hopes
?) that Apple will continue
using the PP5021 in other models. There's no word yet on whose chips Apple will be using in the next iPods, though we
expect rumors to start flying furiously very soon. Meanwhile, in an indication of the power of the iPod ecosystem,
PortalPlayer's stock plummeted over 40% in about 10 minutes of trading today -- not a major surprise, perhaps, given
that the iPod accounts for a whopping 90% of the company's revenues. But, hey it's not all bad news: PortalPlayer has
plans to provide chips
for auxiliary displays
on Windows Vista-based computers. Which should provide some relief in about two or three
years, once such computers actually start shipping.