Richard mainly compares the two companies to illustrate different approaches to chip making. Intel creates general-use chips that can be plugged into a wide range of devices and focuses on beefing up processing power exponentially. Apple, on the other hand, creates system-on-a-chip (SoC) solutions that are tailor-made for specific uses; the A5 that powers the iPhone 4S and iPad is a perfect example.

Since Apple’s chips are designed specifically for a limited set of hardware, their development is streamlined, according to Richard, and includes perks like “longer battery life, instant on and a fast connection” that require “lower power” and therefore appear to outperform more-powerful processors from the likes of Intel, at least in consumer eyes.

Intel has plans to create SoC designs, however; its Haswell chip, planned for 2013, will embrace an approach more akin to Apple’s, designed for laptops and tablets. Intel is also a chip foundry, while Apple is not. That gives it more of a leg up when it comes to actually getting its chips made, since it isn’t subject to outside market forces like Apple’s legal problems with Samsung.

Even still, Intel may be more in competition with Apple than it might appear at first glance. Apple, of course, will in no way become a chip maker for outside companies and probably will never license its chip designs for use by competitors. But if it makes faster progress with creating hardware-specific SoC processors that provide the benefits listed above (low power consumption, faster boot and better battery life) while also allowing for the kind of performance consumers are looking for in a notebook, we could see Apple shift to in-house designs for future notebooks. It’s something the company is reported to have already actively tested, after all.

Intel is taking lots of steps to improve its mobile presence, including plans to integrate NFC capabilities into its chipsets. But Richard makes at least one good point with his comparison. Apple isn’t waiting around to see how things shake out, especially when it comes to mobile devices, and it has instead been at the forefront of a new mobile processing design charge.

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Reports have been circulating that Apple has been in the process of trying to switch its chip-making business to Samsung rival Taiwan Semiconductor Manufacturing Company (TSMC) in an effort to cut ties with the Korean smartphone and component manufacturer. TSMC, however, hasn’t been able to get the manufacturing process right, according to one of the Korea Times‘ sources, which means Apple had little choice but to go with Samsung.

Meanwhile, Samsung and Apple’s legal battles around the world have recently become more, not less divisive. Apple recently won several key victories in courts around the world, including an injunction secured in Australia against the Galaxy Tab 10.1, and the successful prevention of a similar injunction against its own products in the Netherlands.

Statements made by Apple only indicate that things will get worse between the two companies before they get better. In court documents published Friday, Apple noted that it would only be interested in licensing its “lower level patents,” indicating that it wasn’t interested in a broad cross-licensing deal to end litigation. Samsung, too, has been talking tough about plans to beat Apple in appeals in areas where it has seen unfavorable rulings, according to another Korea Times article.

Legal battles notwithstanding, Samsung is reportedly already working on production of the Apple A6 chips in its manufacturing plant in Austin, Texas, according to the Korea Times’ sources. The chips are said to be quad-core, and will be used to power the next iPhone, according to the report. TSMC will continue to produce small volumes of custom chips for Apple, but it won’t be able to take over the bulk of Apple’s chip-making duties any time in the near future.

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Taiwan Semiconductor Manufacturing Co, Ltd. (TSMC)   is the company that will be supplying the A6 to Apple, according to the report. Reuters reported last month that the chipmaker was getting underway with trial production, but this latest report seems to suggest that trial production hadn’t yet begun in earnest until now.

The current A5 chip that powers the iPad 2, and is rumored to power the upcoming iPhone 5, is supplied by Samsung, but reports have long suggested that Apple was considering moving their chip production to TSMC, which is the world’s largest semiconductor foundry as measured by market share. Apple is also thought to be looking to move some of its business away from Samsung, since the two companies are involved in a complicated and volatile legal battle in various courts worldwide.

The A6, based on the ARM chip architecture, will use TSMC’s new 28-nanometer process, along with 3D stacking technologies. That will make for an extremely low-powered chip that’s also capable of blowing away the A4 and A5 in terms of processing ability, since those designs both use layered instead of 3D designs. The 3D stacking tech will allow layers to be integrated vertically and horizontally into one single circuit. Computerworld’s Jonny Evans suggested in July that such a design could make for a processor powerful enough, in theory, to replace Intel chips in future MacBook Airs, so they should extend the iPad’s capabilities considerably.

Taiwan Economic News says TSMC and Apple had discussed working together on past chips, but the chipmaker didn’t have the spare production capacity to take on the iPad maker as a customer. Owing to a downturn in the industry this year, the publication says TSMC now has room to fill Apple’s orders.

While it may be disappointing to some that it’s looking less likely we’ll see an iPad 3 this year, an iPad 2 and an iPad 3 released so close together isn’t a smart play for Apple anyway, as I noted earlier this year. The iPad continues to dominate the tablet space, and Apple is currently doing a good job of keeping its competition from even being able to sell their products. Even if we won’t get to see a new iPad product before 2012, the news that TSMC is getting underway with its chipmaking plans ahead of ramping up for full production in the first quarter of 2011 is still an exciting prospect for fans eager to see what’s coming next from Apple.

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It’s interesting that Intel looks to the iPad, because Apple uses its own, in-house A4 and A5 processors in that tablet, which are based on technology licensed by ARM, Intel’s primary chip design competitor for mobile devices. Recent rumors have suggested Apple may be considering a move to similar ARM-based designs for its MacBook line, though that wouldn’t be possible for at least another couple of years. Kilroy dismissed such speculation, citing the comparative power of Intel and ARM chips:

Go look at the performance of those platforms. They’re taking our latest and high-end end versions of second-generation core, and ARM doesn’t even come close to any capability there.

He wouldn’t go so far as to guarantee that Intel will be included in future MacBook products, but obviously that’s not something Apple would ever allow a manufacturing partner to do, even if a deal was in fact in place.

Meanwhile, at Intel’s annual investor day yesterday, CEO Paul Otellini addressed the perception that Intel is losing the mobile processing game by pointing out that his company still makes the most money on smartphones and tablets today. He says (via Barron’s) that’s because “the money is in the infrastructure,” and Intel is still very much the leader in supplying data-center oriented processors, which are in high demand to support connected mobile devices.

Otellini also brought up Intel’s role as a chip foundry, noting, “[i]f you look at the profitability around the smartphone chips, it’s mostly going to the foundry guys.” Intel is reportedly interested in becoming a foundry partner for Apple, which seems to want to expand beyond its main processor supplier for the iPad, Samsung. Samsung is arguably Apple’s most significant hardware competitor when it comes to mobile devices, thanks to the successful Galaxy line of smartphones and tablets.

Apple just unveiled new iMacs featuring the Intel Sandy Bridge line of processors, and the company is expected to release similarly equipped MacBook Air notebooks soon. According to all the obvious signs, the relationship between Apple and Intel has never been tighter. Intel could do far worse than hitch its mobile hopes to Apple’s wagon, and between Apple’s NC data center and a foundry deal, it would certainly be doing just that.

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According to the EE Times, Richard says that his sources indicate Intel (which recently made forays into the foundry business) is competing for some of Apple’s chip-making capacity. Apple is reportedly looking around for additional suppliers of the A4 and A5 chips it uses to power its iPod touch, iPhone and iPad devices, in an effort to reduce its reliance on Samsung, its existing manufacturing partner for Apple’s ARM-based application processors. Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) has been cited as a new foundry partner for Apple in the past, but Richard says Intel is another likely candidate.

It does make sense for the two to partner, as Intel would become one of the largest ARM suppliers (and therefore a major player in the mobile device market), and Apple would be able to distance itself from Samsung, which it recently took to court for patent infringement (Samsung countersued in response). Samsung’s Galaxy line of smartphones, tablets and now portable media players are Apple’s closest competition in terms of post-PC device dominance. The cosy supplier relationship between the two companies won’t be as easy to maintain as Samsung’s star continues to rise.

Intel would also benefit, as it owns its own manufacturing plants, which are expensive to build and more economical to run full-out — producing chips even when there is no demand. Additionally, as semiconductor designers make chips that pack in more transistors, the chips themselves become smaller, and more fit on a single wafer of silicon.

Essentially, it means that Intel is producing more and more chips as its semiconductor designs get better. But since it has so far missed the mobile wave, it is faced with a coming future where it has multi-billion fabs producing more and more chips that fewer people want. Sure, the demand for Intel’s PC and server chips will continue, but Intel can’t afford to stay on the sidelines of the mobile revolution, so if it can’t get there with its own silicon, it may decide to get there making someone else’s. Then its capital investment in manufacturing — which has been all but abandoned by most chip design firms who now outsource their chipmaking — will still contribute to the bottom line.

Richard notes that any significant shift in Apple’s foundry supplier relationships will take as much as a few years to materialize. That’s because of how Apple manages its supply chain, part of which involves signing high-volume contracts in order to lock-in prices and create component scarcity for competitor products.

With additional reporting from Stacey Higginbotham.

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The presentation, as reported by Fudzilla, was about AMD’s upcoming Fusion platform. Fusion is AMD’s new Accelerated Processing Unit (APU), which combines both CPU and GPU capabilities on a single-die processor. The platform is expected to debut in early 2011, and should make it easier for software developers to leverage the computing power of both types of processor.

During Ghilardi’s presentation, he showed one slide featuring Apple’s iMac and Mac Pro computers, with official Apple branding and even a “Courtesy of Apple” attribution at the bottom, during a segment about hardware partner. The AMD executive didn’t comment, saying only “I’ll flash through them very quickly.”

AMD announced yesterday that some Fusion shipments have already started making their way into manufacturer’s hands, so it’s entirely possible that Apple is already playing with the the APUs in pre-production test units. Which could mean we’ll see AMD-equipped Macs as soon as first or second quarter next year.

The introduction of the Fusion platform would mean that Apple will be parting ways with Intel for the first time since it originally partnered with the chipmaker in January of 2006 for a Core Duo-powered iMac. Since then, Apple Intel has provided the processor for the entire Mac line of computers, including the most recently announced MacBook Air.

Fusion is said to provide advantages in terms of visuals, power and design simplicity, and ease of software development. All of these are things that would appeal to Apple, a company focused on providing visually stunning displays and ever simpler system internals. And if Fusion really does make it easier for developers to leverage processing power, it should be a perfect fit with the upcoming Mac App Store.

UPDATE: A spokesman for AMD said that the slide in question was included simply to indicate that Apple is a current AMD hardware partner, not to indicate that it will or won’t be a Fusion platform user in the future. The representative couldn’t comment about Apple’s possible adoption of Fusion processors in upcoming models.

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Previously, there was an option for a Core i7 processor running at 2.66GHz over the standard Core i5, clocked at 2.53 GHz, for an additional $200. That options remains, but for true power users, this may be a nice way to eliminate the need for that Core i7 iMac and simply add a 27-inch Apple Cinema Display to your home office if you’re often working from the road. My preferred configuration is to get a new MacBook Air and go with the Core i7 iMac, but the new Air may not meet your processing needs.

The $400 price is pretty steep for the upgrade, but that’s just a reminder that despite lower prices among its other offerings, Apple still caters very much to the high end of computing market.

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The sources cited by the Evening Standard are well-informed “gossips,” but there’s evidence to suggest that this rumor may have more too it than just idle speculation, since the stock price of ARM rose significantly on the news as five-thousand shares of the company were traded, making it the biggest gainer on the day.

In case you’re unfamiliar with the company, ARM isn’t actually a chip maker itself, but instead it licenses its designs to hardware manufacturers like Apple, who will then build the tech into their own products. A prime example is the A4 chip that powers the iPad, which Apple developed in-house. The A4 is based on an ARM design. It isn’t the only one, either. Qualcomm’s Snapdragon, a popular Android processor, also uses an ARM-based design. In fact, 75 percent of global devices that use 32-bit processors use ARM tech.

The Advantages of Acquisition

Apple’s bid is said to be around the $8 billion range, which sounds crazy, until you consider that Apple apparently has cash reserves of $41.7 billion on hand to fund ventures and acquisitions exactly like this one. Once acquired, ARM would allow Apple certain privileges. First of all, it wouldn’t have to license its own tech in order to develop new chips, so you can bet more projects like the A4 would go ahead, especially for Apple’s growing stable of mobile devices.

Of course, that’s not the only advantage. ARM would still likely continue to be the place most mobile device makers go to get their chip design licenses, so Apple would then gain all the revenue from that branch of the business, too. And not only would they get that revenue, but they would also be in the power position of owning the technology most of its competitors license whenever they create a new device.

Antitrust and other industry regulations would obviously prevent them from doing anything as brash as blocking competitors like those using Google’s Android OS from being granted licenses, but that’s not the only way Apple could use its new found authority. Since other hardware makers would have to apply for a license before beginning their chip development, Apple would be privy to information about its competitors’ product release plans well in advance of usual, and Cupertino would be paid for the privilege.

An Arms Race

If this is an arms race between Google and Apple, an ARM acquisition would definitely put Apple ahead in the chip department. Google only recently nabbed AdMob out from under Apple’s own bid for the company, forcing the Mac maker to look elsewhere to help back its iAds plan.

It’s only just come out that Google has since answered Apple’s acquisition of chip maker P.A. Semi with the purchase of AgniLux, a startup chip company founded by P.A. Semi employees who left that company when Apple originally acquired it. Ars Technica doesn’t think Google acquired the company with any intent of making its own chips, but as a preemptive defense against possibly having to route its chip licensing plans through Apple…it could make sense.

The most likely outcome if an ARM acquisition actually does go through? Nothing but good things for future iPhone, iPod and iPad owners. All iDevices could conceivably receive significant boosts in battery life and processor power with an entire chip design company working ’round the clock to eke more out of ever more energy conserving designs, with direct access to prototype Apple hardware to test them out on. So cross your fingers for this one, even if it does put more power in the hands of Apple than it should rightly have.

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New details have emerged which suggest chip maker Palo Alto Semiconductor (PA Semi) might not be the hive mind behind the iPad’s “A4” processor as was widely expected.

In case you missed it, the A4 is the diminutive custom silicon that lies at the heart of Apple’s new iPad. It’s the wee beasty that has the raw power to make Magic Move work so smoothly in the upcoming Keynote app, while providing the intelligence to manage energy efficiently enough to squeeze 10 hours of actual use out of the iPad between charges. Oh, and it runs at 1Ghz and is fuelled by unicorn tears, or something.

Anyone with an iPhone (and everyone who has ever relied on laptops to do a days work) knows that there’s usually a big difference between a mobile device’s advertised and actual battery life. So, unless Steve Jobs is lying through his teeth, how exactly does the iPad’s A4 processor manage to deliver its number-crunching goods over such a long period of time?

Certainly Apple’s developments in battery design help a lot, but it’s thought that the real magic happens in the custom-designed processor itself. Venturebeat.com’s Paul Boutin has been investigating the A4, and pushing chip engineers for answers. In an article published on the weekend, he offers the following (possible) explanation;

Apple has invested heavily in OpenCL and LLVM, which are technologies to distribute work across multiple CPUs and multiple GPUs. In this Apple is different than other mobile devices: other vendors want video decoding and 3D games at a good rate, but often leave the GPU mostly idle.

Apple is looking to drive a lot of work through the GPU all the time, as part of any application. For Apple, it makes sense to put a lot of GPU cores in the chip. It even makes sense to put in so much GPU that the chip would overheat, but throttle back the ARM clock speed to leave more thermal envelope for the GPUs to run.

Ah, right then. Magic. Got it.

Terribly Clever

This all sounds plausible, and makes Apple’s 2008 purchase of PA Semi (a snap at only $278 million) seem like a terribly clever move. And since we have yet to see a new custom brain in any iPhone, the iPad offered the most likely candidate as the first recipient of the chip maker’s special silicon.

Only, it’s not. Boutin adds the following;

A very trusted source tells me: PA Semi didn’t do the A4. It was the existing VLSI team. Apple has made custom chips for years like the Northbridges for G4 and G5.

So, if the iPad didn’t get the PA Semi treatment as we originally thought, what’s going on? $278 million is an awful lot of money (even for a company with billions in the bank), and I’d have thought we’d start seeing the results of that purchase by now.

If we haven’t yet seen the full might and majesty of PA Semi’s magic in Apple’s mobile offerings, that might all change soon. After all, we’re just months away from the anticipated 4th generation iPhone…

Back to Front

Maybe I’ve got this all back to front? Was the acquisition of PA Semi — like the more recent acquisition of music streaming service Lala — not so much about Apple getting its hands on new technology, but more about securing the mad skillz of new engineers? If that’s the case, the iPad may be the fruits of that acquisition after all.

Either way, if the next generation iPhone inherits any of the genetic characteristics of its iPad big brother, what might we expect from Apple’s next smartphone? A blistering-fast processor, perhaps, light-years ahead of the best competing handset? Insanely long battery life, perhaps two or three days between charges?

One thing is for sure; last month Steve Jobs very deliberately redefined Apple as a mobile devices company. In the last few years, the company has aggressively enhanced the processing performance and battery life of all its products, from MacBooks to iPods to iPhones and now, of course, the iPad. A breakthrough advancement in one device ultimately migrates across product lines into another, until we’re left with an ecosystem of devices that offer unrivalled power and interoperability. It’s those refinements that have helped sell MacBooks at record levels in spite of a global recession, and allowed the iPhone to steal valuable market share from well-entrenched competitors.

So with all these remarkable advancements in battery life, power management, custom silicon and hardware/software interoperability in mind, ask yourself – what can we expect to see in the next iPhone? Looking at the iPad’s A4 processor as a guide, I’m beginning to think it’ll be the most significant iPhone revision Apple has ever made. And we don’t have very long to wait before we’ll know for sure.

But Apple apparently isn’t interested in using the mobile platform, at least not in its default configuration. The problem is that the yet to be released 32nm Core i5 and Core i7 processors include mandatory integrated graphics. Since switching to the NVIDIA GeForce 9400M graphics processor, we haven’t seen hide nor tail of an Intel integrated chip, and thank goodness for that.

According to reports from Bright Side of News citing sources “close to the matter,” Apple is said to have demanded that Intel build it a custom version of the Arrandale platform that leaves off the integrated graphics. That would allow the Mac maker to then make use of its own graphics option, which at this point seems like it will continue to be NVIDIA despite rumblings about a serious rift between the two companies.

In the past, Apple has received special treatment from Intel on numerous occasions. Perhaps most relevant to the matter at hand, the original MacBook Air featured a custom-designed Merom Core 2 Duo processor that featured very low power usage. Due to Apple’s continued success in the marketplace, and its high-profile public image, Intel must consider them a valuable customer and will probably try to accommodate if it isn’t financially irresponsible to do so.

If no special, non-GPU version of the processor is forthcoming, two outcomes are possible. Most likely, Apple will just continue to use existing processor tech until Intel finally does introduce a GPU-free version. The other, less probable outcome is for Apple to either seek CPUs from AMD, Intel’s biggest competitor, or to begin producing its own in-house, something it might be prepared to do thanks to acquisitions and hires made over the years. I still think going in-house is kind of a nuclear option for Apple, since outsourcing is probably much more cost-effective.

Either way, I’d love to see a major change in the MacBook and MacBook Pro line soon. They’ve been using Intel Core 2 Duo processors for quite a while now, and while incremental processor speed upgrades are all well and good, a serious boost would be much better. Still no quad-core mobile computing anywhere on the horizon, though, despite long-standing expectations.

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The Mac Pro got a new option in the processor customization department, a 3.33GHz quad-core Intel Xeon processor for an additional $1,200. As of yet, there’s no option to double up the 3.33GHz version of the quad-core to create a more powerful 8-core machine on the more expensive configuration of the Mac Pro.

You can also now outfit your Mac Pro with 2TB hard drives, instead of the 1TB option at which capacity previously maxed out. That means the official total capacity of the Mac Pro, as configured in the Apple Store, is now 8TB, which is nothing to sneeze at. Each 2TB drive will set you back $550.

The only reason to hesitate if you’re thinking about picking up a Mac Pro is that the last time they were updated was back in March 2009. Chances are another major upgrade isn’t too far around the corner, possibly involving Intel’s forthcoming i9 processor, so if you can wait, you probably should.

The configuration options for the Xserve were also updated, allowing for use of the same 2TB drives that are now available to the Mac Pros. That means max capacity for the Xserve is now 6TB. RAM options also got upgraded, with 4GB modules now available, so that the max configurable memory is now 24GB on the quad-core Xserve, and 48GB on the 8-core.

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Back in October, HardMac reported that Apple was busy testing Intel’s new “Gulftown” Xeon chip ahead of its inclusion in a refresh of the Mac Pro, which is slated for release early next year. The 32nm Gulftown chip is an evolution of the 45nm architecture found in the currently-shipping 2009 Mac Pro model.

Gulftown will be sold under the Core i9 brand name for consumer machines, while its server counterpart will be labeled the Xeon 5600 series. HardMac’s sources suggested Apple would have short-term exclusive use of the chip, much as it did for each of the last two “Xeon” revisions of the Mac Pro line.

Now, according to AppleInsider, Polish website PCLab last week published performance test results on Gulftown, showing that the new chips operated at nearly twice the speed of the previous generation chips during parallel tasks. In addition, they consumed only 50 percent as much power doing so. Sadly, the performance results are no longer available. PCLab explains:

We have been contacted by the reps of Intel Corporation. We agreed to remove the article. We will bring it back once Gulftown hits the stores, somewhere in 2010 :-)

Earlier this year I bought a 2009 Mac Pro. And – as sheer luck would have it – my purchase was delayed by one week… the very same week, as it happens, that Apple refreshed the Mac Pro line. I scoured the online store, meticulously comparing specs and searching the web for in-depth reviews of the new machine from the sort of geeks who spend their days doing nothing but benchmark testing. In short, I learned that while the Mac Pro prices went up, clock speeds came down – but I was reassured by those “in the know” that it didn’t matter the cores were (marginally) slower than before. I was still getting a more powerful machine than I’d ever need. I don’t mind admitting, though, for what I paid, I wanted my Mac Pro to be light years ahead of everything else, and I wanted it to stay that way for a long time! That’s not too much to ask, is it?

Still, Gulftown will squeeze-in an extra four physical cores above the eight I currently enjoy, and provide an extra four megabytes of L3 cache over the eight offered by my suddenly lowly-by-comparison machine. And don’t forget that 50 percent power-saving…

I’m only partially joking. Setting aside my shameful greed for ever-more-powerful hardware, the fact remains that my many-cored 2009 Mac Pro is woefully under-utilized. I do a fair bit of audio and video editing, but none of the software I use takes full advantage of multiple-processor cores. In addition, none of it is optimized for the 64-bit architecture of my machine or its Snow Leopard operating system. Final Cut doesn’t even try to be 64-bit compatible. Adobe CS4 Master Collection (in itself almost the price of a Mac Pro!) stubbornly remains a 32-bit suite.

So the bottom line is that my gloriously powerful and impressive Mac Pro is still sporting its (virtual) training wheels because, frankly, developers are dragging their heels updating their software.

That doesn’t stop me wanting the new Mac Pro, of course. Like I said, I’m greedy. But I’m also learning. And even if Apple releases this behemoth early in 2010, I don’t think I’ll be too frustrated. News of breathtakingly-more-powerful machines is tantalizing, to be sure, but until software developers really get behind this new hardware, whatever advantages these powerful new chips and architectures promise remains almost entirely academic.

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Installing OS X on third-party hardware is nothing new. The combination of super low-cost hardware with extreme ease of installation, however, have led many to turn their netbooks into rogue Macs. Apple has rarely been supportive of attempts to hack its hardware and software, as the long cat and mouse game of iPhone jailbreaking and its lawsuit against Mac clone maker Psystar make clear.

This move may be more than just  general animosity towards hackers, however. Instead it may indicate Apple is preparing to compete more directly with netbooks with an upcoming tablet device. Although rumored to be priced in the $700-$800 range, significantly higher than most netbooks, the tablet will compete in the same size space as an extremely portable computing device. Apple may not want people to have a choice between a $700 iTablet and a $300 netbook running OS X.

Disabling support for Atom processors would be an elegant way to nix this competition, as Apple’s tablet device is rumored to run an ARM based processor designed by engineers from Apple acquisition P.A. Semi. In the meantime OS X Daily advises anyone who has hackintoshed a netbook to stick with their current version of Snow Leopard or Leopard until a workaround is discovered.

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With the recent launch of the iPhone 3GS, many are curious as to exactly what makes up the guts of the new device and what it costs Apple to build it. A recent teardown by industry analyst iSuppli reveals the iPhone 3GS, while at first glance is very similar to its predecessor, actually includes some unique changes to the hardware. According to the research, the total cost of the new iPhone 3GS 16GB is about $179, which is only $5 more than the previous generation 8GB model when it was released around this time last year.

Of course, when comparing this figure to the cost of the new iPhone, it’s important to remember that it doesn’t include what Apple charges carriers, which subsidize the price to the end user in exchange for signing new contracts. Additionally, this figure is for the cost of the device itself, and does not include packaging or other accessories included in the box.

From a hardware perspective, there are a few new changes, including the replacement of two separate chips (one for Wi-Fi and another for Bluetooth) and with a newer, single-chip solution. The new “digital compass” is composed of the existing accelerometer and a new azimuth sensor by AKM Semiconductor. The accelerometer allows the device to determine the iPhone’s orientation, while the azimuth sensor allows the device to determine its location in relation to magnetic north. The processor in the 3GS has also been bumped to 600MHz, up from the 532MHz processor found in the iPod touch and the 412MHz processor found in the previous-generation iPhone 3G. The new iPhone 3GS processors are, according to FCC filings, capable of higher speeds (in the 800MHz range) but have been clocked lower, likely for better battery performance.

Another interesting item to note is that the flash memory, displays, touchscreen assemblies and processors are still the most expensive components of the device. According to the breakdown by iSuppli, these were primarily manufactured by Samsung and Toshiba. However, keep in mind that Apple does source displays and memory from several vendors, which could skew these figures slightly.

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A number of different tidbits of information are pointing towards Apple shifting its chip design in-house, including the acquisition of P.A. Semi and the hiring of Mark Papermaster, but ARM clearly wants to give it every reason not to try to go it completely alone. It’s responsible for the Cortex A8 processor powering the much zippier iPhone 3G S being released later this week, and now, according to CNET, it’s already teasing the dual-core capable A9, due for inclusion in production smartphones in 2010.

The Cortex A9 will be the first smartphone processor to be dual-core configuration capable, further narrowing the gap between what your computer can do and what your phone can do. Next year’s chip will be only 45 nanometers, down from the “bulky” 65 of the A8. The size reduction should reduce power requirements enough to allow a dual-core configuration of A9s to use just about as much power as the current A8.

Not only will the A9 allow for much-improved performance due to its superscalar (can execute two separate instructions per clock cycle) and out-of-order capabilities, but it should also pave the way for much better graphics. The OMAP 4 from Texas Instruments, which is based on the Cortex A9 platform, is said to support 1080p playback and HD recording and image capture capabilities. In other words, if put to proper use, the next generation of smartphones could be capable enough in the A/V capture department to actually allow you to leave the camera and camcorder at home during that European sightseeing vacation you’ve been planning.

Though the current Cortex A8 processor in the iPhone 3G S is technically Apple-branded, many suspect the actual manufacturer to be Samsung. ARM licenses its processor designs for a fee to third-party manufacturers, many of which will tweak the design somewhat and rebrand it as their own product. Texas Instruments, for instance, makes the OMAP 3, which is the processor powering the Palm Pre, and is based on the Cortex A8 design.

If Apple does decide to start making its own processors, one avenue for the company to take is to license ARM’s IP and use that as the basis for its designs. In many ways, it is the smartest solution, since ARM has over 25 years of industry experience under its belt, and the R&D work they put into its designs represents a very large chunk of saved cash compared with doing your own in-house. P.A. Semi was a licensee of ARM design when it produced the StrongARM processor in 1995, which was then part of the spec list for the Apple Newton.

If Apple is working on its own processing chip for the next-generation iPhone, expect it to be based on the Cortex A9. 2010 will be the year of the dual-core smartphone, and that could bring about the first major leap in smartphone tech. Could be one good reason to skip the iPhone 3G S, unless you’re just going to get every model they release anyway because you have a problem, like me.

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This week saw Apple hiring not one, but two former ATI/AMD chip designers. Just one would be enough to arouse speculation, but two in the same week is being seen by many, including the Wall Street Journal, as nothing short of a public declaration that they do indeed intend to start building their own chips.

Note also that these hires coincide with Mark Papermaster’s official return to work at Apple, which was delayed owing to the legal settlement between them and his former employer, IBM. Papermaster was instrumental in developing the PowerPC architecture with IBM.

One of the new hires this week was Raja Koduri, who was formerly chief technology officer at AMD in their graphics group. The other person brought on board, Bob Drebin, held the very same title before Koduri. Aside from these two high-profile hires, Apple also has ongoing active job postings for various chip-related positions, including some that actually admit to involving “testing the functional correctness of Apple silicon.”

The WSJ article also reminds readers that Apple acquired chip maker P.A. Semi last year. They suggest that the chip company was then tasked with designing a brand new, more energy-efficient ARM processor for the iPhone (which has terrible battery life, as anyone who has one can attest), and that the new hires represent a continuation and extension of this strategy.

But what reason could Apple have for wanting to develop their own chips? After all, outsourcing is more cost-effective, and a preventative measure against corporate bloat. In Apple’s case, however, bringing the development of that core component of their computers and media players in-house might actually make more sense. The WSJ points out that in building their own chips, Apple (which is notoriously secretive) would have to share far less information with chip suppliers. Third-party suppliers are probably the source of most of Apple’s early product leaks, as reports from DigiTimes and other Asian news sources repeatedly indicate.

Internal chip development would also stop the flow of information from Apple to chip makers, and through them to other computer/electronic device manufacturers. It’s basically the same reason Willy Wonka used Oompa Loompah labor, which was to hamper corporate espionage. Don’t get your hopes up for catchy, cautionary song and dance numbers, though, since it looks like Apple is still limited to boring old human workers.

If Apple is working to develop their own chips, they’re going about it the right way: hiring lots of experience, and not rushing a bad or underdeveloped product out the door. The Journal expects a 2010 date for the introduction of any proprietary Apple chips, but don’t be surprised if it takes longer than that for desktops and notebooks to get Apple-designed brains.

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