""This deal comes as a surprise to us as we believe there are other semiconductor firms that offer more technology for less money," Wedbush Morgan Securities analyst Craig Berger wrote in a research note to clients following the announcement."

That's why, commenting on the previous article today, I thought this deal was an interesting combination. It isn't all that obvious as to how the two companies add up to more than either alone.

If PortalPlayer loses the last chip contract it has with Apple, what value, as a company, is there left? The technology itself isn't worth that much without sales.

Does Nvidia see some chance that combining their chips will result in something better than either alone? Will that possibility give them a better chance with Apple in the future? Samsung has far greater resources, and we can see why a company should never rely on one big client. It's a rule in business.

Now I know this is a totally crazy thought, but could it be that Nvidia is after designing its own iPod rival? No?

Apple is known for keeping their products secret until as close to release as possible. If Nvidia is buying PortalP today it might mean that a new iPod product is just around the corner that already has a joint Nvidia/PortalP product in it. Apple is probably pushing all their partners to act as casual as possible to keep all secrets secret as long as possible.

speculation...

Apple seem to have gone wholesale over to a SOC ARM solution from Samsung on everything but the hard disk based iPods. I'd guess the next big iPod is also ARM based giving Apple one reduced cost development platform.

PortalPlayer's chips were all lack lustre compared to those from Cambridge, Broadcom and it would appear, NVidia even so what NVidia sees in them remains a mystery. Perhaps they've some IP and patents that would be valuable? Perhaps they've some as yet unannounced chips? I doubt it's Apple related.