Rumors have been crisscrossing the Internet about actions by Apple that point tellingly to the advent of an Apple tablet, or some kind of outsize iPod touch. VentureBeat is speculating that Apple may use chips they have developed themselves in the imminent $800 tablet computer.

Following some of the back story to the rumor helps it make a little more sense: in 2008, Apple acquired P.A. Semi for $278 million and for seemingly no reason, other than extremely valuable and talented staff (P.A. Semi's founder was a lead designer of the StrongARM processor). Nonetheless, Apple quickly put the team to work developing processors for iPods and iPhones. What no one knew at the time, VentureBeat says, is that Apple actually broke the team in half, with the other half working towards a chip for their upcoming tablet.

The tablet is speculated to have only a touch screen with no physical keyboard, and Apple is said to be aiming the tablet at high-end users to avoid the endless need to undercut competitors like Asus and Dell on the lower end. Likewise, more in-house chips could mean lower manufacturing costs for Apple.

The impending in-house Apple chips also may imply doom for Apple's chip partner of a few years, NVIDIA, with whom Apple was reported to have a tiff a few weeks ago. Because of disagreements over the way NVIDIA handled issues with faulty chips in MacBook Pros, there was speculation that Apple may drop NVIDIA from future models and return to AMD. Now Apple has added itself to the list of contenders that will vie for processor production.

Both the China Times and MacRumors have said that Apple plans to release the tablet for the holiday season, and that it has placed orders with a few companies for components of the tablet. If this web of gossip and hearsay that we're hearing through the grapevine is to be believed, there are more than a few breakthroughs to be had on Apple's end, and the longing for a tablet by some may finally (finally) be put to rest.

The relationship between Apple and NVIDIA, the manufacturer of the graphics chips in most Macs for quite some time now, appears to be souring at an exponential rate. Electronista reports that negotiations between the two companies to continue their business relationship are not going well, with Apple accusing NVIDIA of being arrogant. According to a source with access to NVIDIA, Apple is on track to cut NVIDIA off as a graphics chip provider for the next 3-4 years.

If the two companies cannot reach an agreement, NVIDIA would continue to provide chips for models that currently use NVIDIA, but Apple would be likely to drop NVIDIA chipsets in updates to their product line, particularly in iMacs and MacBooks currently based on Intel's Nehalem architecture.

A significant factor in the disagreement is the way NVIDIA handled the graphics failures of MacBook Pros carrying the GeForce 8600M video chipset, which had a tendency to overheat and eventually stop working. Apple had to extend the warranty on MBP models graphics chips sold from June 2007 to October 2008 to three years (the Apple support page on this issue can be found here).

The relationship between Intel and NVIDIA hasn't exactly helped, either. Both businesses filed opposing lawsuits over NVIDIA's license to make mainboard chipsets with their own internal memory controllers. If Intel wins, NVIDIA could not make another chipset like its GeForce 9400M model that supports Core i7 processors, and would oust NVIDIA from Macs by exclusion.

Neither Apple nor NVIDIA have publicly spoken on the matter so far. Apple does have a history of severing relationships almost without warning, as they dropped ATI (now AMD) from Power Mac G4s after the company revealed Apple's plans ahead of a Macworld keynote address. However, if Apple does indeed drop NVIDIA, they may have to return to AMD in order to maintain their current graphics standard.

Papermaster. Drebin. Koduri. A law firm specializing in intellectual property? The backcourt starters for the Toronto Raptors? Three key graphics-chip experts now all on the Apple payroll? If you had option C on your answer card, congratulations: now you get to join the WSJ and Forbes in reading the tea leaves about what Apple's dream team of silicon-savvy engineering talent will be building in the secure labs deep in the dwarven mines under 1 Infinite Loop.

Apple's body-snatching spree, particularly focused on veterans of the GPU team at processor maker AMD, aligns with the purchase of PA Semi last year in expanding the company's hardware design capabilities. While there's no Apple product yet on the market featuring chips designed by the new squadron, the expectation is that future iPhones and mobile devices will benefit from Apple-only silicon; graphics capabilities built into these new and exclusive chips would be, presumably, unmatchable by competitors in the mobile space.

The WSJ notes that over 100 LinkedIn profiles for chip engineers who recently worked at Samsung, Intel or other hardware companies now indicate they are sporting Apple employee badges (yay for transparency!). With the current economic climate triggering layoffs and shrinkage at many high-tech enterprises, Apple's combination of marketplace strength and Scrooge McDuck-esque giant pile of cash is allowing it to build a brain trust in hardware that rivals its legendary software expertise.

What kind of super iPhone or magic Mac do you think will be built around these chips and this team?

Is an AMD Apple laptop in the works? That's the rumor that DigiTimes Systems published yesterday. According to Digitimes, Taiwan component makers are seeing increased orders for a kind of capacitor to be used in an AMD-based Apple notebook.

In September, AMD CEO Hector Ruiz speculated that Apple and AMD might do business together. However, the article mentions that a number of motherboard makers doubt the rumors, "noting the performance advantage Intel currently enjoys over AMD, especially for the Core 2 Duo processor compared with AMD's present CPU lineup. AMD is also considered to have insufficient capacity, the makers added."

During an Intel-bashing session at the Commonwealth Club in San Francisco, The CEO of AMD, Hector Ruiz, whined remarked that an AMD + Apple partnership is in their cards: "Knowing Apple, why would they want to be held hostage like everyone else has been?" Of course, Apple wasn't available to comment on whether Mac users could have AMD inside anytime soon.

While I try to manage my shackled ankles that this iMac imposes, I'll let you check out the full rundown of what Ruiz had to say at Bloomberg.

[via Engadget]

FiringSquad, a site covering all things gaming, interviewed Derek Perez, the Director of Public Relations for NVIDIA (ATI's largest competitor), about yesterday's news of the AMD and ATI merger. Mr. Perez looks at the merger as a boost to their own business, excited that NVIDIA will be the only GPU company that supports both AMD and Intel. If this is true, however, this merger could wind up being a bad thing for Mac users as Apple's machines are 100% Intel Inside (yes, I know that slogan is dead now). FiringSquad didn't get much out of Intel, their only comment was basically "we'll get back to you after we're finished reading all this legal mumbo jumbo".

It's still way too early to tell, but I hope this merger doesn't mean that Apple's customers will lose one custom build option in the online store.

[via IMG]

AMD, the #2 CPU maker in the world, has announced a purchase of ATI, a leading graphics card manufacturer, for $5.4 billion. IMG has more details on the buyout and the business end of things, but we're more interested in finding out what exactly this means for the Mac market. ATI currently supplies the graphics hardware in a good portion of Apple's machines, including the MacBook Pro I'm typing this on and my wife's iMac, so here's hoping ATI makes enough money from working with Apple to keep AMD - an arch rival to Intel - happy. Stay tuned for more details as they develop.