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Apple Dumps PortalPlayer Chip 147

Posted by Zonk
from the unhappy-executives dept.
Quash writes to mention a BusinessWeek article about Apple's decision to not use the PortalPlayer chip in a future version of the iPod nano. From the article: "PortalPlayer stock promptly shed $9.46, or nearly 42% of its value, and more than $220 million in market value. Apple generally doesn't discuss future products, nor its manufacturing or component supply strategies. It had no comment on the matter. But theories about who may have been the beneficiary of PortalPlayer's misfortune are abounding."
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Apple Dumps PortalPlayer Chip

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  • by Whiney Mac Fanboy (963289) * <whineymacfanboy@gmail.com> on Friday April 21, 2006 @12:01PM (#15174149) Homepage Journal
    Interesting that this announcement from Apple came the quarter after PortalPlayer announced [thestreet.com] a new technology (called Preface) that's designed to work with Windows Vista only.

    So - were they dumped for practical reasons or for punitive reasons? What do people think?

    Onto a different aspect of this story - the company being touted as the most likely supplier of replacement chips is Samsung (allready a supplier of a good deal of ipod flash memory) [technewsworld.com]. Is it really wise for Apple to trust a competitor [samsung.com] with components crucial to Apple's core business? (ipods are Apple's core business now).

    Well, I guess Apple are happy doing business like this [microsoft.com]
    • by Anonymous Coward
      Maybe their CEO did not greet Steve in the coffee shop earlier that morning...
      • by gEvil (beta) (945888) on Friday April 21, 2006 @12:07PM (#15174213)
        Maybe their CEO did not greet Steve in the coffee shop earlier that morning...

        "I'm going to fucking kill PortalPlayer!"

        Whoops. Wrong Steve...
      • Once upon a time in Cupertino, some believe, around the year two double-aught six, head priest of the Apple, Steve Jobs, was walking down the road, contemplating whatever it is that a man of Steve Jobs' infinite power contemplates - which is another way of saying "who knows?" - when a PortalPlayer employee appeared, traveling in the opposite direction. As the CEO and the employee crossed paths, Steve Jobs, in a practically unfathomable display of generosity, gave the employee the slightest of nods. The nod
        • You know, I love the Kill Bill reference, but I feel like by leaving the reference to the exploding-heart technique out you might have kept it more subtle, thus enhancing the humor.

          Of course, this comment obliterates all subtlety that remains. Hmm.
    • I don't believe that Samsung is a direct competitor to Apple in the DAP market, much the same way Dell isn't really a competitor to Apple in the desktop PC market. Apple goes after a pretty narrow market, and they're highly successful there. Samsung is more a more broad-ranging company sells tons of different things [samsung.com]. It's a bit like comparing a small boutique carmaker to General Motors. Both make the same product, but are not really competing against each other.
      • Not really. The iPod is as mass market as they get. They have a product lineup stretching from $70 to $400. Sure, they sell at a small price premium over comparable players, but everybody shopping for a digital music player wants one.

        Samsung is more diversified in more markets than Apple, but their MP3 player lineup is just as expensive and much less appealing than Apple. I don't see Samsung picking up the MP3 player market if Apple falls. The only brand that could win by default is maybe Creative.
        • I think this has more to do with the size of the market for these devices. DAP players are still not completely mainstream, as they require a computer and either some technical knowledge or a friend that can teach you. Before Apple and Itunes, the MP3 player market was a lot smaller and the software/hardware was worse (not that it's a lot better now). But it's important to note that it took a few years for a "breakthrough" product to come along and destroy the rest of the industry under the force of its
    • by dsginter (104154) on Friday April 21, 2006 @12:17PM (#15174292)
      I think that we are close to seeing why Apple *really* switched to Intel. Put on your tin foil hat because I'm about to take you for a conspiracy theory ride:

      1) Intel have been working with Ovonyx [ovonyx.com] since 2000 on a technology called phase change memory [sciencenews.org] (or PRAM, for short). Basically, PRAM uses chalcogenide - the same material used in rewriteable optical media - in a solid state RAM, only it is manipulated electrically, instead of optically. This gives the RAM nonvolatility and random accessibility. It is several orders of magnatude faster than flash (nearly as fast as DRAM) and has a write cycle endurance of 10^12 demonstrated as of about 4 years ago.

      2) Intel patent applications have led me to believe that they have made great strides in the technology, while remaining very tight lipped. Here's some insight [uspto.gov]. Note that they are discussing the displacement of SRAM, DRAM and flash with this technology. Noteworthy, is the following:

      [0058] Turning to FIG. 5, a portion of a system 500 in accordance with an embodiment of the present invention is described. System 500 may be used in wireless devices such as, for example, a cellular telephone, personal digital assistant (PDA), a laptop or portable computer with wireless capability, a web tablet, a wireless telephone, a pager, an instant messaging device, a digital music player, a digital camera, or other devices that may be adapted to transmit and/or receive information wirelessly. System 500 may be used in any of the following systems: a wireless local area network (WLAN) system, a wireless personal area network (WPAN) system, or a cellular network, although the scope of the present invention is not limited in this respect.

      Now, here's where it all begins:

      Envision, if you will, a high-speed, nonvolatile memory with very low power consumption. This enables the following:

      1) Intel Robson Technology [google.com]. This would answer the question of durability. Why would Intel demo such a technology if flash memory would wear out in short order? With PRAM, you've got CMOS compatibility so you can throw the whole deal right into the processor.

      2) Ultra-low power wireless devices. Add Intel's Wireless USB [intel.com] and you've got the perfect medium to talk to your iPod. In addition, your gonna end up using it for more than just an iPod. Store your entire "desktop" on the damn thing, add some authentication mechanisms and you can use any wireless USB equipped PC to log into your "wireless personal server".

      There's more, but this should be good for now.
      • ... are a real paranoid :D Thanks for the ride, though. Food for thought!
      • too bad ther already was a wifi enabled mp3 player on the market. it failed because the nimrods that made it kept it closed and used a nasty stupid way of getting music onto the player.

        and their Pc software sucked horribly.

        Personally I dont want to transfer music at 802.11g speeds. firewire is insanely faster.

        Soniqcast Aireo [engadget.com] is the wifi mp3 player.

        dont be tempted. it completely and utterly sucks based on the software and crappy firmware in it alone.
        • Personally I dont want to transfer music at 802.11g speeds. firewire is insanely faster.

          If you re-read my original post, you can see that I suggested wireless USB (480mbps). I think that you'll find the bottleneck elsewhere in this case.
      • by xoboots (683791) on Friday April 21, 2006 @12:58PM (#15174673) Journal
        Looking at the last earnings report from Apple it seems that the REAL reason they switched to Intel was to lower overall component costs. Scale matters -- being the only retail game for PPC was putting a premium on Apple's marginal costs; since switching to the Intel ecosystem they reap the reward of using essentially commoditized parts.

        So it wasn't really about a supposed technology ramp-up which they touted and I doubt they were banking on "future" technologies. The way I see it, it was simply a matter of the bottom-line: you really can lower costs when using high-availability parts. Go figure.

        Never-the-less, that's some fun technology to be watching.
        • by CapnGib (31274)
          the REAL reason they switched to Intel was to lower overall component costs.

          That is no doubt part of the story... but what could the cumulative per unit savings really add up to? While there is a very real cost savings on the cpu and associated architecture, the cost of the transition is huge. Rosetta development, maintaining support for 2 architectures, convincing 3rd party developers to ship UBs, Osbourne effect... If it really were only about saving a buck or two, it was a pretty risky move. Still,
          • Interesting but...

            ...if it were all about marginal costs on the CPU+arch, AMD would have been a better choice...

            The AMD infrastructure is still of a much lower volume than the Intel infrastructure and has fewer suppliers. Intel is still going to be cheaper in the long-run. The other costs involved in the switch are not negligible but neither are they insurmountable, especially since this time around they were porting an already provably portable OS. I wouldn't be tempted to claim the osborne effect in t

            • by CapnGib (31274)
              The AMD infrastructure is still of a much lower volume than the Intel infrastructure and has fewer suppliers....

              Even so, given AMD's traditionally lower costs, and Apple's (relatively) low volume, this could have likely been a cheaper way to make a mac.

              What I find very interesting is the false presmise that Apple needed to switch their computing platform to Intel to be able to broker (speculatively I should add) unrelated technology deals with Intel that concern the iPod platform. There is little or no sens
              • I'm surprised that people don't see an obvious reason for Apple choosing Intel over AMD:
                Intel has great brand recognition among most consumers. All those "Intel Inside" ads were not just played to give TV networks money. Apple wants to be associated with a top brand, since they want to be the top brand. AMD does not have nearly the brand recognition that Intel has. I have seen few, if any, AMD ads on TV.

                The fact is many consumers and businesses trust the Intel brand. Intel does not really sell direct

      • by camt (162536)
        Your conspiracy theory is well crafted, except for the fact that PortalPlayer provides the processing chips, not the memory, for the iPods. Apple already has a fairly long, prepaid contract with Samsung for the memory, if my own memory serves correctly.

        That said, I wouldn't be surprised to see Intel processors (ARM or XScale?) on a touch/widescreen video iPod in the near future. So I think your theory may be correct about Apple seeing the benefit of a strong Intel partnership not just for the Mac, but for
      • just to pick nits... and because its along the lines of what i do, chalcogenide isn't a material exactly, but a class of materials in the same sense that nitrides are a class of materials. chalcogenides have O, S, and Se Te usually, sometimes also Eu and others.

        europium chalcogenides were the first semiconducting magnets, predating the field of spintronics (spin electronics which has been a subject of a few /. articles) by 20-30 years... but their useable temperature is a max of 4 or 5 kelvin.

        word.
      • I'm not convinced. Intel - like most other semiconductor companies - like to offer each product independently. In addition to this, they will usually licence most of their patents using a cross licencing scheme, so there's no benefit to using Intel. Intel isn't going to care because they still get their money.
      • Huh??? Apple's Macintosh computers have had PRAM [apple.com] forever!

        Ohhh! You don't mean Parameter RAM!

    • Well if samsung screws up (IF they provide replacement chips somewhere in the future) their product will suffer too, plus imagine all that lawsuit money for apple. Win-win situation.
    • by vought (160908)
      I think Portal has always had designs on the Windows Media/Media Center market. When I worked there a few months after the first iPod shipped, employees were strongly discouraged from talking about their then largest (and possibly only) customer. I worked there for six months and never heard the word "Apple" from a single employee.

      The PP2002C,D, etc and PP5003 were good designs to get Portal off the ground, but it was never a product designed for Apple, just a convenient all-purpose dual core CPU with some
    • CLEARLY INTEL (Score:1, Interesting)

      by Anonymous Coward
      Ever wonder why Apple choose Intel, not AMD for their x86 products? Especially that 32 bit wanna-be dual core, when AMD's design is so much better?

      My answer is that there were two categories of chips in the running: computer chips and potable product chips. By combining both chips in a deal, Apple could leverage much better pricing and have more influence over whoever was their supplier. It's a little known fact but AMD also have an ARM like product based on the MIPS architecture (Alchemy AU1200 [amd.com]) which has
      • MIPS's power consumption is really nowhere near as good as ARM's. Plus ARM is bringing out the desktop-level cortex [arm.com] next year, and AMD really has nothing comparable waiting in the wings.
      • Because Intel could provide the CPU, chipset, everything, all from one supplier who isn't going to see real supply problems.

        AMD "lost" because they could not provide what Apple wanted; hell, I doubt they were even in consideration.
      • Not to mention that saying, "we're switching to Intel" made everyone from investors to pundits worry. Saying, "we're switching to AMD" would have caused a lot more anxiety.

        Wait unti the hard part is done, then we'll see what Apple does.
    • Cringley predicted this months ago. Cringleys speculation was that the reason Apple chose Intel over the nominally superior AMD was to get access to intel technologies on a broad level, including their low power embeded chips for the ipod. (Which they were familiar with from the Newton).
    • ...this announcement from Apple...

      Apple did not make this announcement. Portal Player did. Something about wanting to remain up and up with investors...

    • Apple used to use IBM chips for their CPU's while competing against IBM in the desktop and laptop markets, they have also used Sony components while competing in the MP3 and computer markets. These large corporations are heavily segmented (the chip business is often a seperate business unit from the consumer product devisions) so this is not as crazy as it seems.
    • The Broadcom Conference [yahoo.com] call STRONGLY hinted that newer broadcom chipsets (smaller, lower power comsumption, cheaper, faster, yadda yadda) were going to be the replacement for these PortalPlayer chips.

      Much of the work of several chips has been bundled into single chip solutions by Broadcom, making fabrication much easier for video applications and handsets (cellphones).
  • by WiZZLa (912473)
    It's possible they are making their own chip, but wouldn't it be ironic if they went with Sigmatel (who bought Rio). Maybe then they can finally get gapless playback and a decent mp3 player.
    • i don't think gapless is dicated by the chip. you can get gapless on your ipod by loading rockbox now. doesn't matter to most people anyway since often their songs aren't ripped for it and they r buying singles instead of albums more. listening habit has changed too, random/shuffle doesn't benefit from gapless.
    • You already can get gapless play back in the iPod with RockBox [rockbox.org]'s firmware, which would imply its not the fault of the PortalPlayer chip.
  • Samsung (Score:1, Insightful)

    by Metabolife (961249)
    You are treating Samsung as an evil business. Just because they are trying to enter a marketplace doesn't mean they will sabotage their reputation by selling faulty chips to apple. Seeing as how the volume of ipod's sold would tower over the volume of samsung players sold, samsung would probably be better off selling apple computer chips.
  • Not dumped entirely (Score:3, Informative)

    by john82 (68332) on Friday April 21, 2006 @12:15PM (#15174268)
    Apple has NOT dumped PortalPlayer entirely. At least, not yet.

    Instead, Apple announced that PortalPlayer's latest chip will not be used in an upcoming version of the iPod Nano. PortalPlayer is the supplier for this particular chip in the current Nano and Video iPods. The announcement made no mention of changing the supplier for the current product line.
    • Actually if you RTFA, Apple didn't announce anything, PortalPlayer announced it, and Apple has not confirmed it.

      As such there was nothing said about Apple's plans, as it was not an apple release.
    • Excellent observation! This announcement really only affects future flash based iPods. It is interesting to note that Apple did already stray from PortalPlayer for the shuffle. Not that PP really cared, shuffles didn't exactly sail off the shelf.

      PortalPlayer is still very much in consideration for future video iPods.

      So, who will get the new Nano business? My money is on Intel XScale, but a good argument can be made for Samsung.

      Disclaimer: I work for PortalPlayer (but I have no inside knowledge as to

  • Seems obvious (Score:5, Interesting)

    by joebooty (967881) on Friday April 21, 2006 @12:15PM (#15174270)
    The Nano got destroyed by suppliers not being able to provide product when the Nano oversold estimates. You will all remember how we were flooded with nano commercials at launch and then the commercials disappeared and so did the Nanos because Apple could not assemble any units to sell.

    With this move Apple shifts from having a critical part supplied by a bit player to the part being supplied by one of the behemoths of the industry in Samsung.

    Furthermore the Korean semiconductor companies are infatuated with marketshare. I am certain Samsung offered them a tempting deal as long as they were the singlesource.
  • by Tibor the Hun (143056) on Friday April 21, 2006 @12:15PM (#15174273)
    According to him it's Chevrolet!

    You heard it here first folks!
  • Let Me Guess.... (Score:4, Interesting)

    by dduardo (592868) on Friday April 21, 2006 @12:16PM (#15174275)
    They are switching over to Intel's Xscale processor. Since they are buying bulk Core Duos they must have gotten a discount on the PXA27x.
  • by mekkab (133181) on Friday April 21, 2006 @12:21PM (#15174327) Homepage Journal
    It's me. We'll always have the first Nano...

    -Apple
  • Wow, amazing how much power Apple has to just decide they're going to switch chip makers and therefore crush a company.
  • PP is expensive! (Score:5, Insightful)

    by Fengpost (907072) on Friday April 21, 2006 @12:34PM (#15174439)
    Portal Player solution is very expensive. Last time I checked, it requires 2 ARM 7 chips with an external auio codec chip to run the the non video version iPod. There are plenty of more cost effective solution from the competitors such as Sigmatel, Philips or Freescale.

    It is probably just a cost cutting move for Apple.
    • The PP chip does not require an external audio codec (what do you think those two ARMs are for?). Also, just to clarify, the PP chip contains dual core ARMs (not requires). The current video iPod is reported to use an external video codec (perhaps that is where your confusion comes in).

      You can bet that Apple negotiated a favorable pricing deal on the Portal Player chips. I don't think cost is the whole issue.

      • Re:PP is expensive! (Score:3, Interesting)

        by John Whitley (6067)
        The PP chip does not require an external audio codec (what do you think those two ARMs are for?).

        You're confusing terminology on this point. The parent was correctly referring to the external D/A converter chip, such as the Intel Aduio Codec '97 chips often found in PC Hardware (and which the PPI chips support) or an I2S chip such as Wolfson Microelectronics' or Sigmatel's offerings -- which are more suited to the portable embedded space than power-hungry AC'97 chips.

        So the parent's claims are that the BOM
    • Re:PP is expensive! (Score:3, Interesting)

      by SeaFox (739806)
      Portal Player solution is very expensive.

      With this huge devaluing of their stock, maybe Apple will consider buying the company outright.

      What an internesting manipulation of the markets this would make.

      1) Get annoyed at component costs for you main supplier of a hit product.
      2) Leak that you are dumping them to put their stock price in the tank.
      3) But company outright and do away with peksy contacts.
      4) Profit by not having to pay the old company's margin anymore.
  • Other Theories (Score:5, Interesting)

    by caramuru (600877) on Friday April 21, 2006 @12:36PM (#15174465)
    As an unhappy PortalPlayer stockholder, I have been reading everything I could find on the company since the news hit the street yesterday morning. The stock price has been driven down to less than two times the cash (on a per share basis) the company has in the bank - a very pessimistic valuation. Something not mentioned in the article is pricing. Some believe that either PortalPlayer has been too greedy or the new supplier (not known now) very agressively priced its chip. The new supplier might be Samsung, who already supplies flash memory for the iPod. Samsung could give Apple a "twofer" price on memory and processor. Another potential supplier might be Sigmatel. Until someone at Apple leaks the name of the supplier we will not know who the new supplier is. Apple employees, get busy! Doing business with Apple is not always a happy experience - ask IBM.
    • I am always confused by stockholders who are surprised when this sort of thing happens. Ignore the press released, the stock pricing, the valuation, the marketing, and all that useless stuff. The reason they are suffering can be summarised rather concisely: Their Product Sucks.

      Concentrate on that in future and you might save some money :)

      • Re:Other Theories (Score:3, Informative)

        by augustz (18082)
        So true. If the lexus of the space can't afford your product (and apple is the lexus of the mp3 space in terms of amount of money to burn) I'd say it's not going to be too popular with anyone else.

        Search for portalplayer here: http://www.rockbox.org/irc/rockbox-20040811.txt [rockbox.org]

        Granted, this isn't PR speak, but people wondering why in the world someone would use the product. Of course, as an investor, this is probably the first thing you are tracking, how good is their product relative to their competitiors. I'm
      • mor eimportantly, if you own stock in any company which depends on a single customer for the majority of it's value sell that stock and sell it quickly.
    • My first thought was that the company might have debts, but no, they're debt-free. The P/E is 6.5, which is unbelievably low. Of course that doesn't take into account the loss of Apple's business, and without a lot more financial analysis I can't begin to guess what their future earnings will look like. It's been declining steadily for a year, even before the latest bad news.

      But based on the numbers I've got in hand, it seems like the stock is very underpriced.
  • They're doing the same with the iPod?
  • by tomcres (925786) on Friday April 21, 2006 @12:49PM (#15174583)
    ...Intel is expected to announce what it is going to do with all of the Pentiums with the FDIV bug that were recalled... stay tuned...
  • by pslam (97660) on Friday April 21, 2006 @12:50PM (#15174594) Homepage Journal
    ...is because their chips were a buggy pile of putrid crap. Seriously I'm surprised they lasted this long. It's an underpowered chip by today's standards (ARM7TDMI? are they joking?), it's not the lowest power consumption available by a long shot, and they don't integrate enough peripherals to lower total product cost. They're years behind the competition now, and they have nobody to blame but themselves.

    So, congrats to Apple for finally ditching them. You should all look forward to some better performing and longer lasting iPods in the future. Yes, I'm rather bitter from having to deal with the muppets at PortalPlayer in the past.

    • Yes, I'm rather bitter...

      I think that explains your ridiculous comment quite well.

      Apple is not stupid. For whatever reason they chose to go with another supplier, I can assure you that it was not due to any technical issues or lack of capabilities on the Portal Player chip.

  • When Sony and other digital music players are getting 30 - 50 hours playback, why can't Apple release a product that truly offers more then 14 - 18 tops?

    Apple also needs something a little more robust, to offer such features as some PDA like functionality, games, or better video support (i.e. HD video out).

    Either that, or someone just offered Apple a cheaper version of the same concept so Apple can make more profit on their cheaper product lines.
    • by a_nonamiss (743253) on Friday April 21, 2006 @01:45PM (#15175134)
      Apple also needs something a little more robust, to offer such features as some PDA like functionality, games, or better video support (i.e. HD video out).


      Yes, Apple clearly needs to do something about it's 80% market share [macnn.com] in the portable music player business. I mean, clearly, consumers aren't about to put up with this shoddiness.
      • Apple also needs something a little more robust, to offer such features as some PDA like functionality, games, or better video support (i.e. HD video out).

        Yes, Apple clearly needs to do something about it's 80% market share in the portable music player business. I mean, clearly, consumers aren't about to put up with this shoddiness.

        Seriously! I mean, come on, a music player that just plays music??? Who would want such a useless thing???

        Why, how would I microwave my lunch, clean my toilet, brush my c

    • When Sony and other digital music players are getting 30 - 50 hours playback, why can't Apple release a product that truly offers more then 14 - 18 tops?

      Have you taken the time to read the fine print that the asterisk in those claims points to? You get 30-50 hours on files compressed to 32kbps WMA, meaning more files fit into the RAM buffer. You could easily do the same on an iPod by compressing to 32kbps AAC files.

    • Apple just announced yesterday that they are going to drop the price of the iPod [news.com.au] in the near future.

      So, your profit allegations are baseless.

      As for the playback time, Apple has been bitten by a class action for claiming that the iPods played longer than expected. Once bitten, twice shy. Also, don't forget the end sentence on the Sony site:

      Up to 50 hours continuous playback with built-in lithium-ion rechargeable battery (fully charged) when playing in ATRAC3 @ 105kbps and normal power save mode. Actual

  • "so-called" (Score:3, Insightful)

    by M-G (44998) on Friday April 21, 2006 @01:13PM (#15174831)
    Does this drive anyone else nuts? FTA: ...one of Apple's main suppliers for so-called NAND flash memory.

    It seems like anytime some media type doesn't understand tech, they drop 'so-called' in front of the name.
    • Don't you mean the so-called media types?

      'Cause I sure don't understand them.
    • It seems like anytime some media type doesn't understand tech, they drop 'so-called' in front of the name.

      Then it's a good indication the rest of the article is probably wrong too.
  • THAT is one magic dac and final drive circuit.

    the bass is well-known to be superior quality.

    the one thing that stops me from buying OTHER apple players is that NONE of them (but the shuffle) use that really amazing DAC. shame!

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