Pundits suspected this might be coming after Apple's relatively recent acquisition of the PA Semiconductor company.
The 1GHz frequency may sound trifling by modern desktop standards but it is beefy when compared to the mobile CPU range. Google's own Nexus One smartphone is similarly powered by a 1GHz processor.
According to Jobs, the A4 is able to decode high-def video for 10 hours on a single battery charge, giving it a rare mix of both grunt and low power consumption.
A computer manufacturer owning its own semiconductor company is not a new phenomenon. The eventually ill-fated Commodore Business Machines (CBM) made the smart move of purchasing MOS Semiconductor back in the early 1980's giving it ownership of the 6502 family of microprocessors.