Steve Jobs's shop recently announced the $278 million purchase of a small computer-chip maker named P.A. Semi—a takeover that most analysts assumed was designed to shore up efficient chip technology for future versions of the iPhone.

But it turns out some of P.A. Semi's best customers are defense contractors, including Lockheed Martin and Raytheon, and they're not at all comfortable with the company's new latte-drinking, yoga-practicing, peacenik boss. Rumors are flying that Apple will shut down production of a key processor used in "more than 10" different defense systems.

EE Times reports: 

Apple Inc. may have to face the ire of the U.S. Department of Defense following its planned acquisition of P.A. Semi Inc. The startup's PWRficient processor is designed into DoD programs in every major branch of the armed services, said one P.A. Semi customer who expects Apple will end production of the parts.

"We've had customers saying they are going to the DoD on this one," said a source in one of the several companies making embedded computer boards with the processor.

Lends new meaning to the term "iPod Killer," doesn't it?