Nvidia to acquire PortalPlayer

Nvidia has agreed to buy PortalPlayer for about $357 million in stock. PortalPlayer, which supplies the audio chip used in the fifth-generation iPod, was hit hard this year when Apple picked Samsung to power the second-generation iPod nano and second-generation iPod shuffle. Analysts said the news was the company’s “worst nightmare” because Apple accounted for more than 90% of PortalPlayer’s revenue at the time. Interestingly, it was reported earlier this year that Nvidia had beat out Broadcom to supply the multimedia chip inside the next-generation video iPod. “We believe the Nvidia chip adds 3D graphics functionality in addition to all of the existing features (such as H.264) that Broadcom supported with the existing vPod,” American Technology Research analyst Satya Chillara said at the time.