Is Apple's PA Semi acquisition a hint that a Gaming Console is coming?

Apple made a surprising move by purchasing PA Semi, a little-known microprocessor design firm, that is specialised in low power, high performance chips, raising the apparent prospects of Apple shunning Intel and taking iPhone hardware design in house.

Apple declined to say why it has purchased the company but the $278 million acquisition suggests that it is not something done light-heartedly and this could send a strong message to Intel whose latest Atom range of processors is not considered low-powered enough to be incorporated into the forthcoming iPhone designs.

PA Semi though has been closely followed by Apple in the recent years before Apple made the move from PowerPC to Intel x86 micrprocessor family; PA Semi's team is headed by the lead designer of StrongARM, a Digital Equipment Company product, which was acquired by Intel and subsequently sold.

Last year, the team then designed a line of microprocessors called PWRficient from scratch which has won a number of awards; the processor is a 64-bit dual core processor which can run at up to 2GHz and is said to be four times more efficient than a Core 2 Duo, consuming between 5w and 25w.

PA Semi is understood to be working on a number of designs including a Quad Core derivative, a discrete GPU and a Southbridge solution and has won a number of defense contracts which PA Semi said, it may no longer be able to "guarantee supplies of its chips".

Apple's decision to integrate 3G and keep the iPhone as thin as it currently is means that the company does not have many solutions to improve battery life and increase performance at the same time, but more interestingly, it could be used as a lever (just as Dell did with AMD) to convince Intel to listen and collaborate more closely with Apple.

However, it might not be as clear a situation as it seems, as Taiwanese sources close to Apple say that Apple is not interested in PA Semi's products or roadmap but more for its Intellectual Property and talent; a fact reinforced by hardware tech website Beyond3D comments that even the PWRficient is not efficient enough for the iPhone.

So what would Apple do with a processor too powerful for its iPhone and which will not be used in its x86-bound computers, workstations and laptops; that could well be the successor to the Power-PC Based Apple-designed Pippin (see below).

PA Semi's website is currently down.