Longtime iPod chip supplier PortalPlayer may not be down and out yet. A new report says that the company may supply the chips for Apple's next-generation video iPod, despite indications that the company had lost a future contract bid for iPod chips and one Samsung executive claiming that it has already won the contract to supply chips for the next-generation iPod nano, which analysts expect could surface by the September quarter. Craig Berger, an analyst with Wedbush Morgan Securities, told the EETimes that PortalPlayer is still the favorite to win the contract for at least some of Apple's future iPod line. "We continue to believe PortalPlayer will retain its socket in the soon-to-be-released video iPod given Apple's design constraints," Berger said in his Tuesday report to clients.

"While we maintain our thesis that the Video iPod will remain a two-chip solution in 2006, we are removing these units from our PortalPlayer revenue forecast in light of Apple's apparent ability to switch chip vendors at will," he told clients.

After posting impressive second quarter results earlier this week, the company's stock dropped on dramatically lowered guidance for the second quarter. During the conference call, Portal said that it would "fight" to regain the lost iPod chip business at Apple. "We haven't given up with that customer," Johnson told analysts, referring to Apple. "We will fight back to win that socket."