Apple bought P.A. Semi of Santa Clara, Ca., a fabless semiconductor company which focuses on low-power processors. Forbes reports that Jobs and Senior Vice President Tony Fadell led a tiny group of executives who spearheaded the acquisition. Some of the negotiating took place at Jobs' home in Palo Alto. Allegedly, Apple is seeking to use a proprietary chip on its iPhones and iPods.

There are also rumors that Apple was not impressed by the power specs of the upcoming Intel solution for mobile devices, the Atom platform. Furthermore, Apple would be able to instruct its newly acquired unit to specifically tailor future designs for its needs, rather than using a generic processor which would be available to competitors as well.

The deal is worth about $278 million, Forbes reports. "Apple buys smaller technology companies from time to time, and we generally do not comment on our purposes and plans," said Apple spokesman Steve Dowling to Forbes.

P.A. Semi was founded in 2003 by Dan Dobberpuhl who was the lead designer for the DEC Alpha and StrongARM processors. Dobberpuhl managed to snatch other top chip designers from Intel, Advanced Micro Devices and Sun Microsystems.

The company initially was pondering the development of a very powerful, 64-bit, 16-core processor based on the PowerPC design that would only consume a third of its rivals' power. The main customer would have been Apple. The project folded when Apple switched to Intel's already designed processors, but not before PA Semi demoed its PWRficient PowerPC-compatible chips.    

ARM is still the leading design in the low-power market of processors for mobile devices. In fact, iPhone uses a Samsung-made processor licensed from the British ARM. Furthermore, Apple is one of ARM's three main founders, together with Acorn Computers and VLSI Technology. They have created ARM in 1990, which was sold to Intel and became the foundation of the XScale family, subsequently sold to Marvell for $600 million in June of 2006.