It’s been an interesting day for Apple today. First off, they announced that they were buying a chip company called P.A. Semi. Not familiar with them? Don’t worry – neither was I, but more on that in a bit. The second important news had to do with Apple earnings, and for that, they did fairly well indeed. You can read the blow by blow results from News.com’s coverage on the Apple earnings announcement here. Here are the major tidbits that I’ve gleamed from the article:

• Posted revenue of $7.51 billion and net profit of $1.05 billion
• Gross margins were 32.9 percent – down from 35.1 percent a year ago
• March 2008 revenues were the highest in Apple’s history
• Shipped 2.289,000 macs during the quarter. Half of all Mac sold were to new Mac users – good news – but does this translate to users switching from Windows to Mac OS X?
• MacBook Air launch “successful” but no numbers were given
• Apple sold 10.6 million iPods – only 1 percent growth rate from last year – that seems disappointing and points to the notion that the MP3 player market is indeed maturing. iPhone SDK may help spur sales though.
• iPod shuffle sales down though picked up a bit after the price cut. Price cuts always help don’t they?
• Apple’s share of the U.S. MP3 player market is 73 percent
• Total iPhone revenue was $378 million during Q1 BUT all revenue from iPhones sold on or after 3/6 will be deferred until iPhone 2.0 software is delivered in June
• 74 percent jump in retail revenue – Apple likes their store fronts
• Apple still confident in selling 10 million iPhones for the year

Want to know more – read that News.com article or check out the press release here.

Now back to the purchase of P.A. Semi. So who are they? P.A. Semi is a two and half year old company specializing in making processors for the embedded devices market utilizing the IBM Power instruction set.

Now wait a second.. Power you say? Didn’t Apple just ditch the PowerPC processor in favor of the Intel x86 instruction set? Didn’t Apple also embrace the ARM instruction set for their iPhone product line? Yes and yes!

So why purchase a Power supporting chip company? Why get into chips at all? Very interesting questions and ones that Apple has no official response for yet… BUT.. it does drive some speculations and rumors of course.

Now before I get into the speculations, I need to remind you, these ARE speculations and not truths. OK? OK…

There are a couple of possible avenues that Apple could take with this purchase. First and foremost, it’s clear that Apple doesn’t want to necessarily rely on third party chip vendors for all of their products. The question then is – where does Apple intend on utilizing these processors (or any future processors from P.A. Semi)? It’s clearly a market where they see themselves needing a steady and reliable diet of PowerPC processors.

Before we speculate, we have to remember one thing. Even though Apple moved to the Intel x86 instruction set several years ago and away from the Power PC instruction set, it paved the way for a platform independent system with the introduction of Universal Binary support. Applications delivered as Universal Binaries will work natively in either x86 or PowerPC processors which means Apple could easily deliver the OS and application suite for either platform. Now assuming application developers were developing towards the Universal Binary platform, Apple is in good shape when it comes to application support for different platforms.

With that said, would Apple actually consider moving back to the PowerPC platform for desktops? That’s seriously doubtful given the performance of Intel Core 2 architecture and the processor roadmap from Intel. Plus, if you were to believe Jobs and Otellini, the Apple and Intel relationship appears to be very healthy.

Yet what about other markets? There are clearly other possible product that Apple could get into with their platforms. Of course the obvious thought would be a PowerPC driven mobile phone platform. However, P.A. Semi doesn’t have a processor available that has a low enough power utilization for the mobile phone arena – at least not yet. It’s not hard to imagine that the company COULD come out with a PowerPC architecture that sucked a few hundred milliwatts of power instead of watts of power. Imagine an iPhone with a PowerPC processor inside instead of an ARM processor.. NICE.

Ok.. so a future iPhone with a P.A. Semi processor could be in the works. What else? Definitely other types of mobile devices – everything from tablet devices to mobile Internet devices (MIDs) to even low power notebooks that compete against products from ASUS and HP. Think about it for a second. ASUS’s Eee PC has been a surprisingly big hit to consumers proving an interesting point. People are willing to purchase small systems with OK performance if it’s cheap and portable. They’re even willing to accept a Linux OS derivative! Thus providing an OS X-based low power, low cost alternative could be a possibility also. Could this pave the way to an Eee PC competitor? Who knows and it’s purely speculation on my part.

Others have speculated that Apple could get into gaming consoles or low power server systems. Gaming is a bit of a reach in my opinion only because the company has tended to ignore that market. It’s doubtful that they would want to get into a market where margins are thin if nonexistent for consoles and everything is about software licenses.

As for servers – it’s possible but again, Intel processors are doing a good job here in performance and in power consumption.. but then again, you never know.

The final area could very well be advances for the digital home. A beefier Apple TV device perhaps? Apple TV 2 has certainly delivered on the original Apple TV premise – could the acquisition of P.A. Semi point the way to a better, cooler running Apple TV device? Something that would be more powerful in performance, deliver more programming and media capabilities, and easily integrated into the home, networked environment? Maybe – but then again, could we simply see a low power Core 2 Duo in Apple TV instead? Definitely.

All this speculation and nothing concrete. Typical Apple but it’s just so much fun isn’t it?

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