For months I've wondered if Intel (Nasdaq: INTC) and Apple (Nasdaq: AAPL) were almost through as chip partners. Now, after sitting in on Intel's press conference at this week's Consumer Electronics Show in Las Vegas, I'm convinced that's exactly what's about to happen.

For those who don't know, Intel yesterday took the wraps off its latest Core processor for PCs at CES. Code-named "Sandy Bridge," the chip integrates graphics processing on the same die and is manufactured at the extra-small 32 nanometer scale to stuff more transistors into a smaller space. More transistors generally equal more processing power.

CEO Paul Otellini and PC client group general manager Mooly Eden also touted Intel's close ties with Microsoft (Nasdaq: MSFT) in shepherding Sandy Bridge. Hewlett-Packard (NYSE: HPQ) will be among the first to ship Windows machines based on the Sandy Bridge chipset. Additional technology for encoding digital rights into streamed high-definition video also received support from Time Warner's (NYSE: TWX) Warner Bros. studios.

If all that sounds important, you're right. But it's not the "what" of the Sandy Bridge announcement that had me curious as an investor. It's how Intel talked about the chip that really grabbed me.

Eyeing the "eye candy"
Otellini and Eden ticked off stats as each took their turns on stage, almost as if they were play-by-play announcers:

"Users watch 2 billion YouTube videos daily!"

"Consumers upload 2.5 million photos to Facebook monthly!" (Impressive, but still not enough to justify a $50 billion valuation.)

The implication? Next-generation PCs must be capable of transcoding digital media at very high speeds, and they can't afford to outsource the job to a separate video card. No doubt NVIDIA (Nasdaq: NVDA) would disagree. And, I suspect, so would most gamers.

Nonetheless, Eden said consumers would demand more from central processing chips in an age where transcoding -- i.e., the process of preparing and moving video from one device format to another -- is becoming more common.

Here, Intel and chief rival Advanced Micro Devices (NYSE: AMD) have common ground. AMD has made an all-in bet on integrating the ATI graphics technology it acquired into core chipsets.

Apple, too, should love this idea. Earlier reports had the Mac maker moving away from NVIDIA and toward Sandy Bridge for its low-end MacBooks with an eye on AMD graphics for higher-end offerings. Space-constrained Macs should love the efficient Sandy Bridge design. So why didn't anyone mention that at the Intel presser?

Mr. Otellini, I have Mr. Jobs on the line for you ...
No one did. Isn't this just a little curious? I think so. But I'm even more fascinated by how Intel chose to demonstrate Sandy Bridge's processing power. In a head-to-head demo, Eden virtually mocked the processing power of the Core 2 Duo, a common Mac chip made by Intel. Sandy Bridge was 830% faster, Eden said. Ouch.

What makes this especially troubling is that Apple has a history of haggling with chip component makers. Even NVIDIA, long a close partner, has suffered the Mac maker's cheapskate ways. If Intel wants a bigger slice of the processing pie, expect Apple to cry foul -- especially now that it has built its own chipset to support iOS devices, the A4.

On the other hand, maybe Intel is the problem. Perhaps fearing the rise of the A4, Eden left the Mac maker out of the Sandy Bridge discussion to leave room for an eventual parting. Nothing else makes sense, especially if Apple does have designs on moving away from NVIDIA as its long-standing graphics chip partner.

Now it's your turn to weigh in. What do you think of Sandy Bridge? Will Apple ever show an A4 Mac? Use the comments box below to let us know what you think, and be sure to check back here daily as we report on other CES stories as they emerge.

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