Apple is buying PA Semi, a design company known for sophisticated chips. PA Semi is a small company and Apple buying a small company is not something new and chooses to remain silent over the deal. If PA Semi would now onwards supply microprocessors to Apple the volume of business that Intel got from Apple would not be the same as before.

P.A. Semi’s 64-bit dual core microprocessor asserted to be 300% more efficient by consuming 5 to 13 watts running at 2 gigahertz than any comparable chips. These chips are now used in Telecommunications, networking and wireless companies.

Intel has also developed a very low power-consuming chip called Atom but PA Semi’s chip seems to be more efficient than any other chip. Apple intends to sell 10 million iPhone by the end of 2008. Now every other cell phone company wants to make an iPhone and Apple is not aware of it but Apple believes that it can only be a reflection of the original.

Intel is also producing a variety of chips suitable for different classes of applications like “consumer devices, low-cost notebook computers and set-top boxes”. But Intel will not cater exclusively to any customer which means customer has to build around Intel chips and not vice versa.

iPhone and the exclusive sophisticated chip from PA Semi is a strategic move by Apple. The PC sellers know how with Intel chips the profit margin gets narrower day by day. Now Apple owning PA Semi for its iPhone and then there are the iPods too and the focus is now on more powerful microprocessors that have less thirst for power consumption.

Companies like Texas Instruments, Qualcomm and Broadcom are fighting to build low power-consuming chips but these companies are targeting bigger and sophisticated machines. Apart from Intel, there are other companies producing microprocessors and Apple has partnered with them for its iPhone.