Apple introduced the iPad handheld device, which has a 9.7inch diagonal screen and is designed for browsing the internet, playing games, reading e-books and viewing video content, this week.
The product fits somewhere between the iPhone and MacBook laptop, said Apple CEO Steve Jobs at a press event.
The iPad is powered by a chip called A4 that was designed in-house by the company, Jobs said.
The system-on-chip includes a processor that runs at 1GHz and a graphics core that is capable of displaying 720p high-definition video. The power-efficient chip can also provide 10 hours of battery life on active usage of the device.
The iPad shares many characteristics with the iPhone, so the A4 chip itself or its variants could ultimately make it to the iPhone, analysts said. Both use low-power chips and are designed to run the iPhone OS.
The A4 chip was designed for portable products, and modified chips based on the architecture are prime candidates to be used in new iPhone versions, said Nathan Brookwood, principal analyst at Insight 64.
A variant of the A4 chip could make iPhones much faster, he said.
"There's really no reason why a chip with this kind of characteristic wouldn't make it in the iPhone," Brookwood said.
The chip was "breathtaking" in terms of speed and execution as it launched programs on the iPad instantly, Brookwood said.
The iPad was also able to turn the screen to landscape mode almost instantly, something iPhones lag at.
The iPhones could use a speed boost that the A4 chips could deliver, and Apple could run the chip at lower frequencies to provide the iPhones longer battery life.
"My guess is [the A4] is a lot faster than what they use in existing products," Brookwood said.
Technology strategist Jim McGregor of In-Stat agreed with Brookwood, saying that Apple could spin the A4 silicon for the iPhone.
The chip could undergo further modifications for the iPhone to fit the screen size and improve the device's battery life.
Apple typically refreshes the iPhone design every year. The iPhone 3GS was announced by Apple last year, and an upgrade may come next year. The iPhone 3GS uses an Arm-based system-on-chip made by Samsung.
An Apple representative declined to provide details about the A4 chip on Wednesday, but analysts said it was based on an Arm processor core.
The chip was most likely designed by employees who came with Apple's 2008 acquisition of chip firm PA Semi, which earlier was involved in designing low-power chips.
Apple is trying to gain larger control over chip development for an advantage over its rivals, Brookwood said.
Apple's options outside Arm-based processors for the iPhone are also poor, analysts said.
Though most Mac laptops and desktops are powered by Intel chips, the chip maker doesn't have a track record in developing mobile chips.
Intel just recently showed its first smartphone, LG Electronics' GW990, which has an Atom mobile chip inside. But the chip isn't proven, so Apple took to developing its own chips for mobile devices.
But Apple isn't necessarily competing with Intel in the chip development arena. The emergence of the A4 chip won't change Intel's mobile chip road map or development, McGregor said.
The challenge for Apple will be to keep pace with rival chip designers like Marvell, which designs heavily modified chips with Arm processors to fit into specific mobile devices.
However, the A4 itself shouldn't be looked at as a platform-specific processor, analysts said.
The chip could possibly make it to MacBooks as a co-processor for certain features like instant-boot, where laptops start in a matter of seconds for users to quickly access web browsers or check email, analysts said.
For example, Dell is offering Arm processors alongside Intel processors in laptops specifically for instant-boot capabilities.
However, that may not happen in the short term as Apple just finished the transition of moving its software, including the Mac OS X operating system, to Intel architecture.
The transition was painful, and Apple may not want to go through that again in the short term, Brookwood said.
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