Nvidia Corp. (NASDAQ: NVDA) is a top developer of graphics chips for the PC market. But now the company wants to move into a new, hot market: chips for portable devices.

So today, Nvidia agreed to pay $13.50 per share for PortalPlayer (NASDAQ: PLAY).

It's a good move for PortalPlayer, whose stock has plunged this year – from $30 to as low as $8.50. Basically, in April, the company's marquee customer, Apple Computer, Inc. (NASDAQ: AAPL), said it would not use the company's chips in some of its iPods.

Now, with a much bigger backer (i.e., Nvidia), PortalPlayer should have lots of leverage. And, of course, Nvidia will get a footprint in a fast-growing market. In fact, on news of the deal, Nvidia's stock increased $1.03 to $33.63, over 3%.

It looks, however, like the deal was fairly leaky. That is, over the past couple weeks, the stock price of PortalPlayer surged about 25%. Were some people buying on insider information?

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates InvestorOffering.com.

Apple closed today at $56.02, down $1.41, a 2.46% drop in its price, following another dramatic dip yesterday of 2.46, giving us an over 5% dip in the last two days.

Todays slide is most likely due to the fact that investors are finding out about a possible delay in iPod updates. Apple is swapping integrated chip suppliers. The company making the video and audio processor, PortalPlayer, is being dropped. Samsung is rumored to be the new supplier.

From the outside of the Apple world, many investors look at the iPod as being one of the main, if not the main, leg that Apple stands on. Any iPod related news will have an effect on the company.

[Disclosure: I own Apple stock at the date of this post]

Last week, PortalPlayer released news that it would not be supplying its digital chips for the next version of the iPod Nano. The report implied that Apple would be redesigning the guts of the tiny but wildly popular music device and spurred interest in potential details.

Now, the first reports are surfacing which provide some details on when the new Nano will be released and what design features it might possess. AppleInsider is reporting that a release date may be scheduled for September in time for the Christmas buying splurge.

The report also suggests that the new Nano will have a "significant internal redesign" which leaves those of us who obsessively follow new Apple products to speculate on which companies might be tapped to supply the replacement chips.