Apple is reportedly working on a new low-power mobile chip, but it does not appear as if it will find its way into the new iPhone. The company recently acquired chip designer PA Semi and have taken out ads seeking engineers familiar with NEON extended instruction set that is used by next gen ARM processors. Analysts do not believe the new chip will be ready by WWDC, where it is widely anticipated that Apple will introduce new iPhones.

Apple currently purchases processors from Samsung and the next generation iPhone will likely run a faster version of the current chip. While the physical dimensions of the iPhone are expected to be similar to the current generation, the faster processor should be akin to purchasing a faster computer, where the noticeable changes come in launching applications and activities that are processor intensive. The new processor will help Apple compete with the Palm Pre, which features Texas Instruments OMAP3430 mobile processor.

According to Forward Concepts President Will Strauss, developing a custom chip design could take a minimum of two years to complete. If Apple's design were a multi-core, it would allow for more processor power in the iPhone than the average netbook or notebook PC. Such a processor would work nicely in the rumored Apple Media Pad.

[via Forbes]