You guys are reading too much into the word "Analog".
All electronics circuits are analog. There is no such thing as a pure digital signal, it is just how its interpreted. All power and ground supplies are analog, all high-speed gigabit transmission paths are in +/- pairs and are much more analog than digital in how they are handled in board routing, impedance matching, etc.
Every circuit trace has capacitance and impedance, no voltage is stable enough to be 100% to an exact level at all times.
Hence, chips have analog function hardware... most often in the I/O drivers for transmit and receive logic on each pin, as well as for filtering power, powering on / off sections of the chip, and for Phased Lock Loops which are heavily used in microprocessors / SOCs.
Analog does not mean they are hooking up speakers or ancient technology directly to the chip. In-fact that would be a bad idea.
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As opposed to chips they already have in production? Why would they spend the "R&D" money to figure out how to make it smaller when they are already cranking out a ton of these puppies for a variety of different devices....
Actually, while you just stated it indirectly, that is a good point... there are multiple devices using the chip... what happens when there aren't? A5 is used on older designs. Maybe the single-core A5 Apple-TV is about to be the only thing left using the A5 processor in a few months. Why keep building a larger CPU than needed?