Analysis PortalPlayer, the company that provides Apple with controller chips for the iPod family, has given us a tantalising glimpse of the Mac maker's plans for future music players. Unfortunately for PortalPlayer, it's not going to be part of the programme, it warned investors yesterday.

The chip company put out a terse statement stating that the successor to its PP5021 system-on-a-chip product has not been selected by Apple "for use in their mid-range and high-end Flash-based iPods". The company added that "other" iPods will continue to use the PP5021.

Let's look at what this may mean. PortalPlayer chips are currently used in the iPod Nano and the hard disk drive-based iPod. The iPod Shuffle uses a Sigmatel chip.

At the very least, PortalPlayer's statement suggests a major revision of the Nano is in the works. Since PortalPlayer is clearly worried about losing revenue or it wouldn't have issued the statement, so it clearly believes the current Nanos - the most popular iPods, and therefore PortalPlayer's bread winner - will be replaced.

At a pinch you could call the 2GB and 4GB Nanos mid-range and high-end products, respectively, but both are really sited in the bottom to middle area of of the MP3 player market. PortalPlayer's words, then, suggest Apple has its eye on higher capacity Nano models reaching up into the territory once held by the HDD models.

With a HDD-equipped video-oriented iPod believed to be in the works, Apple may well have decided that it's time to base the music-centric models on Flash. Flash prices have fallen during the past three months, and Apple has already secured its Flash supply chain with a series of deals with major Flash producers, announced in October 2005.

Apple may not have in mind a 30GB Flash-based iPod - it's technically possible, but the price would likely be prohibitive - its research might suggest that a more feasible 10GB model would attract buyers who consider a 30GB HDD-based player too capacious and/or too expensive, but think a 4-6GB Nano too basic.

But there's another, more radical possibility. If Apple is indeed preparing a product that combines an iPod with a mobile phone, it will almost certainly use Flash for storage and would undoubtedly be a high-end offering.

Newer, more capacious iPod Nanos based on chips from a rival might not be sufficient to 'scare' a company like PortalPlayer into issuing a statement headed with the words "product transition setback", but failing to secure a design win for a completely new, highly anticipated Apple product would. ®