Apple released their new processor for the coming year's iOS products when they debuted it in the iPad 2. This new processor is called the A5, and it is based on the ARM Cortex A9 reference processor. The A5 is a dual-core system-on-a-chip (SoC) running at a variable speed of 800Mhz to 1Ghz. This variable speed allows it to save more power when not performing major tasks.
The processor costs Apple more to produce their own chip than to buy an off the shelf ARM processor. Some estimate the difference to be around 50% more, but the extra cost gives Apple the ability to make a better chip by modifying the reference design to suit their needs. Apple will be able to reduce this cost over time by putting the A5 into every iOS device like the iPhone, iPod Touch, and AppleTV. The performance gains are well worth it and gives Apple a major advantage in the mobile market space. While we don't know what Apple plans for next year's A6, we do know ARM's plans for future ARM processors.
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