Is PortalPlayer Showing Apple's Hand?

The iPod line has dominated the sector in part because Apple has consistently updated the line. The company introduced the shuffle, its first flash memory-based player, about a year ago, for instance. And last summer, Apple replaced the mini, a hard drive-based player that was the most popular iPod model, with the nano, a smaller, flash-based player.

Apple also has kept its iPod line fresh by adding new features. Unlike the mini, for example, the nano has a color screen. And last fall, the company added video playing capabilities to its top-of-the-line iPod models.

Analysts and enthusiasts have speculated for more than a year that Apple would soon incorporate wireless technology into its iPod line. As reported by AppleInsider and other outlets, the company filed for a patent in April 2003 for an iPod that would incorporate wireless technology. That patent application was published in November 2004.

As envisioned by PortalPlayer, the Bluetooth capabilities of the CSR chip will allow digital media player users to connect with wireless headsets. The WiFi feature would allow the players to sync wirelessly with music stored on PCs and would potentially allow customers to download and stream movies and music directly to their players.

Several companies have already released Bluetooth adapters for the iPod that allow users to connect their players without wires to headphones or car stereos. But there are not yet any WiFi adapters available for the iPod. Regardless, the presence of competitors hasn't stopped Apple in the past. The company released a combined FM tuner and remote control for the iPod line at the Macworld conference last month, even though some of its partners already were offering similar products.

PortalPlayer's chips are at the heart of two of Apple's three iPod lines, the hard-drive based iPods and the flash-based iPod nanos. And the company's presence within Apple could be growing more important; Apple recently introduced a 1GB version of the nano, which some analysts expect will eventually replace the 1GB shuffle.