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Does Imagination license spell HD-out for future iPhones?

Over at Ars Technica, Chris Foreman dives into yesterday's story that Imagination Technologies Group, developer of the PowerVR chip for mobile device displays, has a licensing agreement with Apple for its chip designs (long suspected by AppleInsider but only just confirmed) and that Apple has picked up a chunk of ITG stock; cnet puts it at $5 million worth for a 3.6% stake. The 'smoking gun' press release from Imagination that was linked yesterday has mysteriously disappeared from the company's press page, which does lead one to wonder if the news wasn't quite ready for prime time -- but the speculation about what future iPhones might be capable of in the video-out department is still quite enticing. (You can see the Google-cached version of the PR blurb here.)

Foreman notes that the ITG chip designs Apple might use (the PowerVR SGX and VXD) would provide a dramatic boost to 3D performance, with Open GL ES 2.0 support, and also allow for HD-quality video out via the dock connector. Adding the playback power of an Apple TV (or better) to a mobile device, while reducing the power consumption required to pull off the trick? Add in a low-power 802.11n chipset for wireless streaming and you've just turned the home theater and set-top box market completely upside down.

If your iPod touch or iPhone could take over all your video playback needs at HD resolutions, would it find a home on your media center shelf? Mine would.