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News
Samsung’s Loose Lips Lost iPod Deal
Tuesday, May 30th, 2006 at 3:00 PM - by Jeff Gamet
Samsung's announcement that it would be providing chips for upcoming iPod models instead of SigmaTel and PortalPlayer apparently upset Apple. As "punishment" for making the announcement, Apple decided to cancel its deal with Samsung and continue to use chips from SigmaTel, according to an EE Times report.
Currently, SigmaTel provides the media processor chip used in the iPod shuffle, and processors from PortalPlayer in the nano product line. Reports now say that SigmaTel will continue to provide chips for upcoming shuffle models, and Samsung will provide the processor for new nano models.
Westbush Morgan Securities analyst, Craig Berger commented "We have increased confidence that SigmaTel will continue supplying the MP3 processor into the Apple Shuffle in [the second half of 2006], after a Samsung executive commented publicly that Samsung supplanted PortalPlayer in the next-generation iPod Nano."
The news comes at a good time for SigmaTel since it is losing market share to China's Action Semiconductor in the low-end MP3 player arena. Analysts expect Apple to ship about 7.4 million shuffles this year.
Mr. Berger stated "We believe that SigmaTel is likely to be the resulting beneficiary of the Samsung executive's gaffe."
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