TAIPEI, Taiwan - Taiwanese news website DigiTimes has reported that Foxlink, a subsidiary of Apple's iPhone manufacturing partner Foxconn, is currently working on development of a micro-projector that can be integrated into mobile devices. Industry sources claim that this technology may be commercialized as early as the end of this year.

With some of the leading handset manufacturers of the likes of Nokia and Samsung announcing their intentions of providing inbuilt projectors on some of their models, Apple - makers of the most popular smartphone, iPhone - seem to have realised the potential threat from this segment. Being pro-active, Apple may have already outsourced the technology development to its Taiwanese subsidiaries.

This news, along with another rumour from TechCrunch reporting camera capabilities on the next generation of iPods and iTouch, seems to be raising the bar in the portable music player segment for Apple.

Most of the smartphones today, including the iPhone, have memories in excess of 8GB, making them ideal for storage of high-definition data, for playback on the move. With a micro-projector on board, projecting on a nearby screen or a flat wall will certainly contribute to a extended multimedia experience.

Success and market acceptability of this miniature projection technology will depend on both pricing and hardware feasibility. Projectors bulbs are major heat generators, and how this mobile projector technology will be addressing the device cooling issues is a major technical concern. With rumours of overheated iPhone 3GS discolouring the back panels being widely discussed on the web, device cooling is going to be the biggest technical hurdle for this technology. However, with most of the handset manufacturers turning to micro-projectors, companies such as Foxlink are likely to rake in huge profits.