Nvidia is to acquire Apple's long-term iPod partner, PortalPlayer, in a $357 million share deal.

Nvidia will pay $13.50 per share for the company, which makes chips for digital music players, including those used in some present-generation iPods.

The buying company is better known for manufacturing graphics chips for use in computers, console games and other consumer electonics devices.

"Modern mobile devices are miniaturized yet powerful multimedia computers. At the core of their architectures are complex Application Processors integrating microprocessors, system logic, networking, and multimedia processors," said president and CEO of Nvidia Jen-Hsun Huang.

"With this acquisition, we are combining the two essential technologies of next-generation PMPs, PDAs, portable game players, and phones: PortalPlayer's innovative Application Processor technology and Nvidia's
industry-leading GPU technology. With the products created through this combination, we intend to drive the next digital revolution, where the mobile device becomes our most personal computer."

The acquisition has been approved by the board of directors of each company and is subject to regulatory approvals and other customary closing conditions.

More details pertaining to the acquisition will be disclosed on the 9 November.