A dissection conducted this week by iSuppli Corp.'s Teardown Analysis service of the new video-capable iPod reveals an important new supplier among Apple's semiconductor partners - Broadcom Corp., which is providing its new BCM2722 VideoCore Multimedia Processor to handle the video functionality.

The Broadcom chip and other integrated circuits account for 17 percent of the $151 total Bill-of-Materials (BOM) cost for the 30Gbyte iPod, according to iSuppli. Other key cost drivers include the hard disk drive and the display, which together account for another 70 percent of the BOM.

While Apple's use of the Broadcom chip is new, the company relied on a mix of old and new suppliers for other key semiconductors in its newest iPod. The old suppliers include PortalPlayer Inc. and Wolfson Microelectronics plc, whose chips have appeared in several iPod generations, and Cypress Semiconductor Corp., which scored its first iPod win with the nano.

Meanwhile, Cypress once again is supplying its Programmable System-on-Chip (PSoC)-based CapSense solution for the Click Wheel circuitry that translates user finger movements into digital signals. Apple chose Cypress when it switched from long-time supplier Synaptics Inc. to its own propriety solution for the Click Wheel.

Apple's use of the BCM2722 expands Broadcom's rapidly-growing presence in the consumer electronics market, where the company already supplies chips for set-top boxes.

In 2004, Broadcom grew its consumer-electronics-related semiconductor revenue by a staggering 143 percent, according to iSuppli. While the iPod win may help the company continue that growth, it is still too early to predict which supplier will dominate video processing in portable devices. For example, Texas Instruments Inc. recently announced a competing DSP based platform for digital video called DaVinci.

"With the market for Portable Media Player (PMP) semiconductors essentially doubling to $6.4 billion in 2009, the stakes in the portable video-processing market are high," said Chris Crotty, senior analyst for consumer electronics at iSuppli.

Once again the company is attempting to redefine a market pioneered by competitors. Other companies like Archos, Creative and Samsung have marketed video-capable players for some time. But none of those companies can match Apple's strength in content, which is key for the growth of video in a market better known for its connection to digital music.

"We used to say that video-capable PMPs were a subset of the MP3 player market. But by 2007, we'll be saying that audio-only MP3 players are a subset of the PMP market," Crotty said.

The iSuppli teardown analysis of Apple's iPod includes a complete BOM, cost data, photos and descriptions of key components. A similar analysis is also available for the iPod nano and the iPod shuffle.

The Teardown Analysis service from iSuppli provides comprehensive, detailed analyses of electronic devices such as mobile phones, digital cameras, PDAs and PCs by performing complete teardowns. iSuppli delivers a complete assessment of all electronic, electromechanical, and mechanical components, examining both pricing and design issues.

This is cache, read story here