With Apple and Intel, It's Speculation Squared

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The latest frenzy is about whether Apple will begin using Intel's XScale processors in the iPod. Writes Jeremy Zawodny:

Jon Stokes actually got the ball rolling on this rumor, suggesting that Apple could be in for some nice discounts from Intel.

There are two sides to this story that are worth noting. The iPod is the most wildly successful--at least the most ubiquitous--of Apple's products at the moment. And Intel's digital home and digital convergence strategies are focusing on bringing its processor technology into the worlds of distributed music and video.

There are also some caveats to this speculation. There is AMD's antitrust lawsuit against Intel, and it's anyone's guess whether AMD will try to bring Apple's about-face on using Intel chips this year into its antitrust argument. Apple and Intel may want to wait until the AMD case is resolved, since the courts will have to decide whether Intel is unfairly using rebates and discounts to OEMs to shut out other chip makers.

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Secondly, Apple and Intel have reached no agreement on anything other than Intel processors in the Mac. So while everybody is speculating, speculate about this: Would Steve Jobs want exclusivity from Intel before using its processors in the iPod? Dell is a pretty big Intel customer of that makes its own MP3 players and could pose a competitive threat to Apple, especially once portable video is brought to market on a greater scale.

Regardless of the technology and point announcements, the Apple-Intel deal has the potential to make at least a few vendor-supplier relationships a little more interesting.

But that's just speculation. Squared.