Monday, February 24, 2003		Feature

Cellphones with Intel inside
Doug Young

CHIP giant Intel Corp, a relative bit player thus far in the cellphone revolution, is making its first serious foray into chips that lie at the heart of handsets and has enlisted a handful of mid-tier Asian firms to use its design.

But Intel, taking on entrenched rivals such as Texas Instruments Inc and Analog Devices, must win over top phone makers, such as Nokia, if it is to become a key supplier for handsets that are becoming more like computers.

"If you look at the (market) for cellphone silicon, it’s in the tens of billions of US dollars, and we intend to be a significant player in this space," Joe LaValle, group sales director for Intel’s wireless communications and computing group told Reuters in a telephone interview. "This is an opportunity to significantly add to Intel’s revenue stream," he said, without giving estimates.

The company unveiled a new high-tech chip, called PXA800F, last week.

The chips are designed for a new generation of phones that allow for high-speed data transmission such as online games and videoconferencing. The first models using it could appear later this year, with large-scale production likely in the first half of 2004.

Asian firms that have endorsed Intel’s new "base band," the industry word for the central chip at the heart of each cell phone, include Taiwan’s MiTAC and Wistron, Korea’s Maxon and China’s Ningbo Bird, TCL and Legend Group. "They’re endorsing the concept of integration, endorsing the technical concept," LaValle said.

Intel is also in talks about incorporating the chips into future handsets from the world’s top five makers: Nokia, Motorola , Samsung, Siemens and Sony Ericsson. None has formally endorsed the chips but all buy other Intel products used in cellphones, primarily flash memory and applications processors.

The new chips are considered groundbreaking because they combine a central processor, applications processing and flash memory on a single chip—a move that not only standardises those three key functions but also saves battery power. Texas Instruments plans a similar integrated chip, but has said it will not be available until next year.

Intel’s wireless communications and computing division contributed $ 2.24 billion to the company last year, or about 8.4 per cent of the company’s $26.76 billion in total revenues.

Intel expects the models to retail for a relatively modest $ 100 to $ 200 each, after subsidies and rebates.

Analysts said Intel’s entry into the market reflects the growing importance of cellphones in the computer world as the two products start to converge.— Reuters