PortalPlayer (San Jose) generates over 90 percent of its sales from Apple’s iPod; it makes the media processor for the MP3. But PortalPlayer said that it has recently been advised that the follow-on to its PP5021 media processor chip has not been selected by Apple for use in its new mid-range and high-end flash-based iPods.

PortalPlayer's Stock has lost more than 40% value in single day. Even PortalPlayer Suppliers like LSI Logic have also suffered major setback.  (LSI Logic has lostmore than 10% value)

In today's electronics reality, where time-to-market and cost (not to mention the fickle and fleeting tastes of consumers) are governing factors, any company with so many eggs in one basket had best protect that basket at all costs.