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This is a little old but it’s quite interesting. Cringely, no stranger to Apple rumors, is positing that instead of dumping Intel or changing the cafeteria to entirely vegan, Apple is planning on installing H.264 chips into all of their laptops and desktops, essentially enabling 2Mbps transfer of HD, 1080p content over iTunes. This would also enable 720p video chat in iChat and a host of other interesting improvements to Apple’s video offerings.

The basis for all of the conjecture is a comment during the July 21st Apple earnings call:

Here’s how this mess of a story got started. On Monday, July 21st Apple Chief Financial Officer Peter Oppenheimer dropped a bomb on those listening to Apple’s quarterly conference call on earnings for Wall Street analysts. He said that gross margins for the coming quarter, and possibly beyond, would be lower for three reasons: 1) a back-to-school special; 2) a one-time charge related to a contract manufacturer, and; 3) “a future product transition that I can’t discuss with you today.”


Note that he said margins would be lower, which means they’re going to be spending money in the future, not saving it by using a cheaper chipset. The H.264 chips cost about $50 to install and would essentially boost the price of Apple gear. Because H.264 encoding and decoding on a chip could bring future revenue in terms of video sales and video editing good will, spending $50 to make some nice cash down the line doesn’t seem like a bad idea.

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