Wedbush Morgan: iPod Roadmap Should Include PortalPlayer

The Consumer Electronics Stock Blog picks up a research note from Wedbush Morgan analysts Craig Berger and James Schneider about "emerging Apple iPod products and implications to suppliers PortalPlayer and Broadcom." Key points from the note were:

• There is significant market speculation that a new Video iPod is in the works, and that PortalPlayer may lose the Video iPod chip business to Broadcom, that device’s video processor supplier, as two chips integrate into one chip.
• While we have been unable to confirm this rumor through channel checks, technical analyses of these firms’ current and likely next-generation chips leads us to conclude that it is unlikely that Broadcom will replace PortalPlayer’s chip in the Video iPod in 2006.
• If a new Video iPod product launches this spring, we believe it is quite unlikely that PLAY will be designed out given software ’stickiness’ issues and next-generation video processor requirement.
• We think PortalPlayer has an 80% chance of retaining its Video iPod socket in a fall 2006 product refresh given our calculations suggesting few power benefits of moving to a one-chip solution. Furthermore, there is a good chance the firm will “deliver the goods” for video processing with its next-generation chip.
• Competitors’ wireless chip offerings are not likely a threat to PortalPlayer in 2006, with a wireless radio unlikely to be integrated with the processor until 2007 or later; wireless capabilities will be driving the next phase of growth for media players.