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Alleged Apple Flash iPod 'partner' signs with Rio

SigmaTel's chips claimed to have won Apple's support

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Hopes that Apple may be preparing a Flash-based iPod appeared to be dashed on Friday when the company's alleged MP3 chip partner announced a deal with Apple portable player rival Rio.

Late last week, it emerged that analyst Jason Pfaum of investment house Thomas Weisel had reported that Apple will use MP3 chip maker SigmaTel's controller chip in an upcoming music player scheduled for a pre-Christmas launch.

Said device was claimed to use Flash memory for storage rather than the usual iPod hard drive.

However, on Friday, SigmaTel itself announced a two-year deal to supply Rio with controller chips for both Flash- and hard drive-based music products. Rio is already a SigmaTel customer. So is Creative, according to pictures on the SigmaTel web site.

SigmaTel's D-Major chip offers MP3 and WMA decoding, the latter including support for Windows Media DRM. With a built-in USB 2.0 controller, D-Major is touted as a compact, low-cost, low-power system-on-a-chip that combines various music player chip components onto a single die.

The company said Rio will be using its upcoming ARM-based audio processing chips, which are due to ship early next year.

There's nothing to indicate that the deal with Rio is exclusive, so it's not beyond the bounds of possibility that Apple might partner with SigmaTel. Apple currently sources audio controllers from PortalPlayer, which provides a similar ARM-based SoC product, which supports a variety of transports, including Firewire, USB and Bluetooth, and include memory, LCD and other controllers in addition to the audio stuff. PortalPlayer's chips can also control Flash storage.

Pace Pfaum's "numerous sources in Asia", it seems likely that if Apple was pondering a Flash-based iPod, it would stick with its established partner. But is a Flash iPod likely? Again, it's not beyond the bounds of possibility, but Apple's focus on hard drive players - which the market as a whole is tending too - particularly given the big price-per-megabyte advantage they offer over Flash, makes such a move seem unlikely. Indeed, Mini is specifically offered as a better value alternative to Flash-based players.

Apple may well feel, however, that a Flash product would not only fill a gap below the iPod Mini, but ease demand for that product. That said, with supplies of iPods and Minis ramping up and said to be nearing demand levels, such a 'back up' strategy may be unnecessary. ®

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