ANALYSIS - Apple's push into chips could unnerve suppliers

By Gabriel Madway and Clare Baldwin

SAN FRANCISCO (Reuters) - Apple Inc appears to be pushing toward designing its own microchips for the iPhone, a move that would give it greater control but inevitably affect its base of suppliers.

The iPhone now uses chips from a variety of suppliers including Samsung Electronics Co Ltd, Broadcom Corp, Marvell Technology Inc, CSR Plc and Infineon Technologies AG, analysts say.

If Apple succeeds in coming up with its own chip, it could potentially dislodge at least one of these companies from the iPhone, while sending notice of its intent to take an even bigger role in the creation of its products.

Apple's semiconductor strategy has been apparent for at least a year, analysts say, pointing to its acquisition of microchip company PA Semi and its hiring of experts from chip companies like Advanced Micro Devices Inc.

"It's not chatter," said Broadpoint AmTech analyst Doug Freedman. "The cat's out of the bag."

But even so, it would take about two years for Apple to come up with a chip, said Freedman. "I don't think there's any material impact to the supply chain for another year or two -- maybe longer," he said.

Analysts say Apple is working on developing an application processor for the iPhone, which is currently supplied by Samsung. Application processors control advanced features on phones, such as multimedia capabilities.

"Apple is basically saying we don't want to put our future in somebody else's hands, said Craig Berger, an analyst with FBR Capital Markets. "The key for them is super low-power and better graphics processing."