April 2, 2008Intel Makes a Push Into Pocket-Size Internet DevicesBy JOHN MARKOFFSAN FRANCISCO — Intel plans to proclaim Wednesday in Shanghai that the next big thing inconsumer gadgets will be the “Internet in your pocket.”The challenge for the giant chip maker will be to prove that it is not too late to a market that hasrapidly become the hottest spot in the consumer electronics business in a post-PC era.At a developer event in China, the company, based in Santa Clara, Calif., will display a range ofwireless Internet devices that Intel believes will fill a gap between smartphones and laptops. Thecompany is hoping to capitalize on the success that Apple has had with its iPhone, which is one ofthe most popular mobile Web smartphones.Intel is calling the new computers Mobile Internet Devices, or MIDs, and claims that it will have asignificant advantage over makers of chips for cellphones because the Intel version will be highlycompatible with the company’s laptop and desktop processors for which most Web software iswritten today.The first generation of Intel’s MID technology will be aimed at data, not voice communications,leaving the company out of the market for smartphones. That has not damped the enthusiasm ofIntel executives who foresee a proliferation of devices ranging from advanced ultracompact laptopsto small, tablet-size devices that will be used for browsing the Web, navigation and Internet chat,rather than voice communications.“What enables the innovation is the ability to bring over all the existing PC applications,” saidAnand Chandrasekher, general manager of the company’s Ultra Mobility Group.The weak link in the Intel strategy is that voice communication remains a significant factor forconsumers choosing to buy hand-held devices.Intel backed out of the cellphone market two years ago when it sold its Xscale microprocessorbusiness to the Marvell Technology Group. Intel then set out on an ambitious redesign project forultralow-power versions of its PC-oriented X86 chips. The current system requires two chips, onefor the processor and one for peripherals. It will take the company another technology generationto place everything on a single chip.That leads some analysts to believe that the company’s real breakthrough will not come until 2009or 2010, when a new processor, now code-named Moorestown, arrives.“We’re pretty bullish on it with some qualifications,” said Van L. Baker, a research vice presidentat the Gartner Group, a market research firm. “We don’t believe they get there in a significant wayuntil the next generation of technology.”Meanwhile, Intel’s strategy is moving the company toward a direct confrontation with Qualcomm,the San Diego-based chip maker that is also trying to deliver the wireless Internet on hand-helddevices. The company, which refers to its strategy as “pocketable computing,” is offering acompeting chip that offers lower power consumption and which is aimed for devices that blendvoice and Internet data.“We need to deliver an Internet experience that is like the desktop,” said Sanjay Jha, Qualcomm’schief operating officer. “People are used to the Internet, and you can’t shortchange them.”The new Intel mobile Internet strategy takes advantage of the company’s Atom microprocessor,which was announced in early March. The Atom will have performance roughly equivalent tolaptop computers introduced four years ago, but will use little more than a half-a-watt to two-and-a-half watts of battery power. That is significantly lower than the 35 watts of power consumedby the company’s state-of-the-art microprocessors in today’s laptops.The new MIDs, which are scheduled to begin showing up in consumer electronics outlets in June,are the clearest evidence to date of the effort that Intel has made since its chief executive, PaulOtellini, set the company on a low-power strategy in 2005. In interviews, Intel executives said thatthe company was slightly ahead of the commitment Mr. Otellini made to bring out a line of lower-power processors before the end of the decade.Complicating life for Intel is the fact that the chip maker is locked out of the low-power cellphoneand smartphone marketplace, which today is entirely based on microprocessor chips made bydesigns licensed from the British design firm ARM Ltd. to companies like Qualcomm.More than 10 billion ARM chips have been sold by more than 200 licensees, and ARM now saysthat more than eight million chips a day are being used in cellphones, smartphones and a widerange of hand-held consumer products.Until recently, early efforts by the PC industry to create so-called palmtop PCs, such as theMicrosoft-inspired Ultra-Mobile PCs, have failed to find a broad consumer audience. Indeed, theentire P.D.A., or personal digital assistant, market is all but dead as many of its functions wereovertaken by the smartphone.However, the category showed renewed signs of life last year when Asus, a Taiwanese equipmentmaker, made a name for itself by introducing the Eee PC, a two-pound Linux-based laptop thatsells for $400.Now many of the mainstream PC makers are rushing to introduce similar laptops that fall wellbelow the traditional PC laptop price, but allow Web surfing and many basic computing tasks.below the traditional PC laptop price, but allow Web surfing and many basic computing tasks.There is also renewed interest among consumer electronics makers in devices that are neitherlaptops or cellphones.Introducing products at the Intel event in Shanghai will be Asus, BenQ, Clarion, Fujitsu, Gigabyte,Lenovo, LG-E, NEC, Panasonic, Samsung, Sharp, Toshiba, WiBrain and Usi. Intel has alsodistanced itself from its traditionally close relationship with Microsoft and Windows by strikingup a new partnership with Ubuntu and Red Flag, two distributors of Linux software for consumermarkets.“Think of it as, ‘honey I shrunk the PC,’ ” said Richard Doherty, president of Envisioneering, aconsumer electronics market research and consulting firm. “Intel is betting that this will be a winin China, which already has the world’s largest mobile phone market and therefore influences therest of the world market.”Copyright 2008 The New York Times CompanyPrivacy Policy Search Corrections RSS First Look Help Contact Us Work for Us Site
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