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Apple's latest chip gamble

The Mac maker must have something in mind for the products of PA Semi, a chipmaker it acquired this week for $278 million. But what?

Is Apple really that much of a chip hopper?

If Apple follows through and uses a chip designed by its latest acquisition, PA Semi, in a future product, the company will have made major bets on Power, x86, ARM, and Power again in just this decade. What, no love for SPARC or MIPS?

PA Semi's chips aren't going to fit into this little package just yet, but they could one day. CNET Networks

A PA Semi representative on Wednesday confirmed last night's news that Apple has paid $278 million for the low-power chip designer. Led by prominent chip designer Don Dobberpuhl, the two-and-a-half-year-old company makes chips for embedded devices based on IBM's Power instruction set.

So what might Apple want with PA Semi? Forbes reported that Apple plans to put its chips inside the iPhone, but several possibilities are being considered this morning, as the industry tries to digest this piece of news.

Apple's iPhone group almost assuredly doesn't want PA Semi's current product. The PWRficient PA6T-1682M is the only product listed on PA Semi's Web page. It's a dual-core 64-bit chip designed for high-performance computing and embedded applications--things like server appliances or sophisticated telecommunications gear.

It's a pretty powerful chip that consumes between 5 watts and 13 watts of power, in most situations. However, while that may be ideal for a server, networking switch, or even a MacBook, it's way too much for a handheld device like the iPhone or the iPod Touch. The Samsung chip inside the iPhone is based on a core designed by ARM that consumes about 279 milliwatts running flat-out at 620MHz. Apple uses a slightly slower version.

Even Intel's Atom chip, which is going into so-called mobile Internet devices, consumes less power than the PA6T-1682M (that's a hell of a name). To date, no other company appears to be developing a smartphone based on this generation of Atom.

A few interesting possibilities perked up as I traveled across the Web this morning. A commenter at The Register, picked up by Slashdot, suggested that Apple could have a game console in mind. That would be a perfect application for this kind of chip, though I'm not sure that if Apple has the desire to get into game consoles, despite filing a patent for that type of device. Maybe Apple TV 3.0 could use a performance boost, which Apple would certainly get, switching to the PA chip and dropping an older version of Intel's Pentium M processor.

Apple could be planning to release a mobile Internet device of its own based on the chip. Again, power consumption concerns raise a red flag here, as you'd have to design any handheld device to accommodate the worst-case scenario power consumption of PA's chip: 25 watts. You'd really need something bigger to effectively dissipate that much heat, as it would require a cooling fan.

Another interesting possibility could be that Apple wants to get more involved in the server market. PA Semi initially wanted to get its chips inside Apple's notebooks, and was apparently in discussions with Apple right up until its decision to embrace Intel's notebook processors in 2005. After that defeat, PA Semi pitched its chip as ideal for clusters of low-power servers.

The most likely scenario is that Apple wants a future PA Semi product for a handheld, server, notebook, or something in between. Dobberpuhl and his team of veteran chip designers are some of the brightest minds in the industry, with an extensive track record. The chipmaker also brings along a low-power patent portfolio that would be attractive to any company focused on low-power computers.

Apple's Scott Forstall explains how the iPhone's operating system is just like Mac OS X at Apple's iPhone SDK unveiling. Corinne Schulze/CNET Networks

Initially last night, distracted by the epic Game 7 played by the San Jose Sharks, I was floored by the possibility that Apple might switch back to Power after such a public divorce. Veteran Apple software developers must have whiplash at this point, working with Power, ARM, and x86 in just three short years.

But I failed to remember (helpfully reminded by TalkBackers this morning) that when Apple made the switch to Intel's chips, it directed software development down the Universal Binary path. Any piece of software written for the Universal binaries will run natively on either x86 chips or Power chips, which allows PowerPC-based Mac owners to keep their systems and upgrade to new software, such as Mac OS X Leopard.

There's an extensive list of applications on Apple's Web site that were created with the Universal binaries. That means it would be relatively painless for Apple and its partners to switch back to the Power architecture for anything that runs on the Mac, since Universal software would run natively on PA Semi's chips.

Could Apple do the same for the iPhone, at some point down the line, when PA Semi is able to get power consumption down to milliwatt levels? We learned during the iPhone SDK event in March that the iPhone's OS X is almost exactly the same thing under the hood as Mac OS X, which would suggest that it also was developed with Universal binaries in mind that could run natively on ARM and other instruction sets, such as x86 or Power. That's not at all certain, but it's an interesting possibility.

That would mean that Apple has figured out a way to develop its software as to take advantage of whatever the best chip on the market is at a given time, without having to worry about porting concerns. Don't like Intel's road map? Switch to PA Semi. Don't like PA Semi's next big idea? Switch back to Samsung. That might be a stretch, but if true, it would send a shudder down the spine of many a chip industry executive.

Finally, there's the possibility that Apple is working on some new type of handheld computer that needs something different than what the ARM community or Intel has in mind two or three years down the road. I can't imagine that Apple would buy Dobberpuhl's company without giving that team some kind of project.

Don't count on much official word from either Apple or PA Semi just yet. Apple spokesman Steve Dowling told Forbes that the company doesn't comment on its plans for acquired companies, and the PA Semi representative said she couldn't even discuss whether the company's engineers would be moving across Silicon Valley from Santa Clara to Cupertino.

In any event, financial analysts awaiting Apple's earnings conference call later this afternoon will probably attempt to get an answer out of COO Tim Cook or CFO Peter Oppenheimer. Late last year, investors had wondered what Apple was planning to do with all its cash. Now they have some idea.