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According to an article published in today's edition of The Register, "PortalPlayer, the company behind the hardware, software and processor technology that powers Apple's iPod, will soon launch a upgraded version of its chip/firmware combo that paves the way for a Photo iPod."
"PortalPlayer Photo Edition will support synchronizing digital photos between portable devices and host PCs, along with on-device playback. [..] The Photo Edition comprises new, 180nm system-on-a-chip silicon based on two 80MHz ARM cores, plus a real-time OS updated with photo handling code that supports the JPEG and Motion JPEG picture formats. The device's software package supports picture manipulation features like editing, rotating, cropping and red-eye correction. It can also allow users to add music to slide-shows. All these features handily replicate functionality provided on the desktop by Apple's iPhoto."
The platform will reportedly support TV output, USB 2.0, Firewire and Ethernet, along with high-resolution color LCDs. Meanwhile, Apple's iPod already supports the the transfer of digital images via Beklin's Media Reader accessory, though company CEO, Steve Jobs, has widely denounced rumors of a picture or video capable iPod.