Much is made of the open- versus closed-ecosystem models of the PC and Mac worlds, with Apple’s obsessive helming of their hardware oft credited for their success in usability, reliability and that overall sense of “specialness” that keeps the zealots so contented and the Microsoft-faithful ever on the defencive.  Yet behind that homogenised corporate achievement are a number of individual success stories: those of processor, chipset and graphics manufacturers, to mention just a few.  Apple’s achievements in interface and design are founded upon carefully selected hardware partnerships and, in a world where key products in their catalogue are credited not only with topping the sales charts but of revolutionising whole market segments, there’s little doubt that being included on their circuit board can be a faststream to profit.

Seeking Alpha’s Sramana Mitra dips a toe or two into the murky waters of Apple’s mysterious hardware suppliers, secure in the knowledge that if only one thing is known to be true then that’s that “someone must be making a killing off this on the chip side.”  It’s a safe assumption, and Mitra herself is leaning toward graphics maestros Nvidia being next in line for some vicarious light from the Cupertino halo.

Previous reports in the EE Times - which quoted industry analysts FBR staking their professional reputation on Nvidia subsidiary PortalPlayer gaining lucrative iPhone CPU+GPU chip contracts – suggested that the established relationship between Apple and PortalPlayer would see the development of all-in-one chipsets handling applications, audio and video processing.  Mitra believes this could be a further foray into coming competition with Microsoft’s growing focus on home-entertainment, currently centred on the Xbox 360 and its role as a media streamer.

Interesting as market prediction might be, for the prospective iPhone user the key implication is the eventual success of the device in those central areas of usability, entertainment and longevity.  The gradual evolution of the iPod has show Apple’s willingness to invest long-term strategy in refining a product, unveiling a raft of incremental advances that maintain their lead above competing products.  Yet to compare the DAP market with the far faster-paced cellphone market – and, more importantly, to presume that excellence in one makes success in the other an inevitability – is a dangerous naivety that Apple would do well to avoid. 

Users are less forgiving of a sluggish, under-powered and slightly incapable cellphone than perhaps any other item of personal electronics.  Whether Apple is using the iPhone as a potential test-bed or viewing it as a relatively straightforward adjunct to the iPod line, they would do well to remember that any drawback or failing, no matter how minor, will be greatly magnified.

Apple’s iPhone and the Future of Nvidia [Seeking Alpha]