MacRumors.com

In an unconfirmed report published at SiliconValleyWatcher.com, Apple has contracted to use a new multimedia chip from Broadcom, who aquired Cambridge, UK based Alphamosaic in 2004.

From the press release about the new chips:

Building on the success of the VC01, Alphamosaic is now sampling VC02, the world's most advanced mobile multimedia processor. The VC02 can display video on 3.5 inch color LCDs and capture 8 megapixel images, making it ideal for watching TV, making videos or taking studio-quality photos on a cellphone.

This new technology could be used to create a video version of the iPod, with high-resolution graphics, game playing possibilities, digital photographs, as well as wireless communication options. Alternatively it could open the gate for a new wave of multimedia devices yet to be introduced.