Rumor: $800 iTablet to Use Custom Apple Chipset?

Following up on rumors of a $800 Apple netbook, MacBook, iTablet, etc. VentureBeat reports that Apple might also use the new platform to introduce their long-rumored custom system-on-a-chip.
This would be the result of Apple purchasing fabless chip design firm Palo Alto Semiconductor (PA Semi) and hiring Papermaster from IBM and graphics processor (GPU) gurus x2 from AMD/ATI (though whether or not it includes the ARM and PowerVR licenses for cores found in the iPhone and iPod touch, or beefier Intel chips found in the Mac line is uncertain).
While Steve Jobs said PA Semi was going to be used for iPods and iPhones, VentureBeat claims the team was actually split in two, half for iPod/iPhone and half for the tablet.
TUAW speculates that, given recent news of problems between Apple and Nvidia, who currently makes the Mac integrated chipsets, perhaps Apple will push the custom work into that line as well.
Either way, we've seen the huge benefit shared software technology has provided for the iPhone and Mac (Spotlight, QuickTime X to name but two), Apple going in-house with the chipsets could be just as beneficial...
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This could also mean an upgrade on chips to next years iPhone. We can only imagine what that thing is gonna be able to do.
Lol not happening.
I'm still not sold on this thing. It looks really cool and I would want to try one out but I don't see something like this as a useful primary computing device in any common profession or hobby.
@Al, as with the common misconception of every netbook, they are not meant to be used for any common profession. They are meant for quick use, check email, etc. At least that has been the idea currently.
I guess we'll just have to wait and see what happens.
@Al, if it has a touch screen (duh) then it has infinity use for both graphic and music production, live PA applications. Think of Ableton live with multi-touch. Think of Brushes with a larger canvas and resolution. I mean...it's the Holy Grail I've personally been waiting for from Apple....give me multi-touch and OSX, and it's game over for music producers everywhere!
I think that it would be great for taking notes