Intel progressing in wireless markets

By Duncan Martell

SAN JOSE, Calif: Intel Corp. is making steady advances in getting cell phone manufacturers to use its Xscale processors while sales of its flash memory, an increasingly important component in cell phones, have held steady, a senior company executive told Reuters. "We definitely have design wins from recognizable -- easily recognizable -- cell phone manufacturers," said Ron Smith, who heads Intel's wireless communications and computing group, in an interview with Reuters.

Intel, the world's largest chipmaker, has been working to diversify away from the personal computer industry, a market that still accounts for about 80 percent of its revenue. The company has spent billions of dollars buying communications chip companies in the last four years and analysts have said the company seems intent on staying the course.

"We're seeing a lot of uptake with our product," Smith said. "Probably better than I could have expected in some ways because there is a paradigm shift to standard product parts in phones." Because of the downturn in the economy, cell phone manufacturers are increasingly turning to standard products, or building-block technologies, in which Intel specializes, rather than custom-designed chips and components, Smith said.

Advanced applications for next-generation phones, taking advantage of the higher-data-transmission-rate GPRS transmission standard, will be in phones available in the next several quarters, Smith said. Those features, which include viewing digital-movie clips, listening to music, and sending and receiving pictures would help spur demand, he said.

Sales of Intel's flash memory chips, which are widely used in cell phones, haven't dipped from the second quarter, Smith said, adding that the amount of flash memory used in each mobile phone is "increasing significantly," largely because of the move to color screens that require more memory.

Intel is one of the largest makers of flash memory chips. Rival AMD is another major flash chipmaker. Smith said that Intel's flash revenue rose 16 percent in the second quarter from the first quarter. "If you'd asked me last quarter was that (the first quarter) the bottom, I would have said I'd like to see more time" before making that call," Smith said. "It (flash chip sales) hasn't dropped back down, it's continued to be OK."

© Reuters