Intel makes stab in the dark with Nokia deal

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Opinion – It’s almost a truism and it’s certainly a tradition that chip giant  Intel has tried many times to diversify its business by making non X86 chips, all to little or no avail.

So the rather vague deal it struck with Nokia yesterday to collaborate on  development of designs does make you wonder a bit whether cooperating with Nokia will produce any tangible results at all.

Under the terms of the agreement, both companies are to develop reference designs  for portable devices, an area that’s already somewhat crowded. More significantly, Intel may well be eyeing British company ARM – which licenses  its technology to companies such as the giant Texas Instruments and Qualcomm.

Nokia sources many of its semiconductors from Texas Instruments and that’s  expected to continue. Nokia hasn’t said that it’s going to buy any chips whatever  from Intel, although the Santa Clara firm must be hoping it will – pretty please.

The deal could mean that in a year or two the market for so called MID (mobile Internet devices) could be very crowded indeed, with everyone who has an iPhone  or even a Blackberry gazing at it and thinking, “this is a MID, isn’t it?”

Paul Otellini, Intel’s CEO, canned its own ARM based division three years ago and  sold it to Marvell – a company that’s done, er, rather marvellously with what it  acquired since.

While Intel would no doubt love to have its chips in every Internet enabled  device in the world, it faces tough competition in that sphere. Qualcomm is  betting its dollar on Snapdragon, an ARM derivative while Intel is hoping that  its low end “Atom” chip will continue to do well in the netbook category.

The size of the devices – or in the industry jargon the “form factor” – is more  important than it seems. While a lot of people have gone for the dinky sized  netbook category, they haven’t thrown out their iPhones or their Blackberry  devices with the bathwater. Many have both. I do.

The size of your fingers and your eyesight ultimately decide what kind of mobility device suits you best.  While the Blackberry and the iPhone go part of  the way to being a “road warrior”, you wouldn’t want to type a novel on these  devices, although, no doubt someone has tried or is trying to do that right now.

There’s one other thing Intel is very good at, apart from making X86 chips and so large profits, and that is forgetting the many collaborations, product ideas and reference designs it’s attempted to launch into an uncaring market.  Its vague arrangement with Nokia may well be completely forgotten in a year’s time. 

Mike Magee is the co-founder of The Register and founded the Inquirer.

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