Samsung lands iPod chip contract

Samsung on Wednesday said it has landed a contract to supply some of the internal components on the next generation iPod. The announcement comes days after longtime iPod supplier Portal Player said that Apple would not use its chips for its high-end future iPods, although it said Apple would continue to use them in the lower-end flash based iPods. Samsung's coup, the largest LSI chip order for the company, comes at the expense of Portal, which currently generates over 90 percent of its sales from Apple’s iPod, and other suppliers such as SigmaTel, Actions, and LSI Logic--all of whom were were also considered front-runners for the new iPod processor contract. Apple has already sold over 50 million iPods and may sell up to 35 million more by the end of 2006, according to analysts. Ironcally, Samsung also sells MP3 playes that compete with Apple's iPod and has been trying to gain marketshare with new product releases and turned to one of the original iPod architects for the design of its Z5 portable MP3 player.

The EE Times reports that an executive from Samsung said that it had won the MP3 media processor business for Apple's next-generation iPods. Samsung is the "majority" supplier of NAND flash memory chips for lower-end iPods, according to company representatives.

The report says that Samsung disclosed that it won the iPod contract at the SEMI Strategic Business Conference on Wednesday, while touting its own chip, dubbed the "PortalPlayer killer." Samsung's chip is based on 32-bit processor technology from ARM Holdings plc.

"I knew PortalPlayer would take a dive," said Jon Kang, senior vice president for the technical marketing group at Samsung Semiconductor Inc., the U.S. chip arm of South Korea's Samsung (Seoul). "I knew that we would win this design."

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