Advertisment

Intel sets more aggressive goals than Microsoft

author-image
CIOL Bureau
New Update

Lucas van Grinsven and Duncan Martell

Advertisment

NEW YORK: Intel Corp., the world's largest chipmaker, has set even more

aggressive goals than its partner Microsoft Corp. to supply the building blocks

for mobile phones, its chief financial officer said on Thursday.

Microsoft, the world's largest software maker, said last week that it aims to

have its software on 100 million cellular phones within three to five years, up

from zero today. At current levels, that target would represent a 25 per cent

share of the global market.

"I would not be satisfied with 100 million phones" in the next

three to five years, Andy Bryant, chief financial officer for Santa Clara,

California-based Intel, told Reuters in a round-table discussion here.

Advertisment

Intel is targeting the mobile phone industry as one of its next engines for

growth, seeking, at least partially, to recreate its success and business model

in the personal computing industry. Intel's microprocessors power about 80 per

cent of the world's PCs.

Bryant said Intel's strategy is to dethrone cell phone manufacturers such as

No. 1 Nokia Oy of Finland and US-based Motorola Inc. Nokia makes almost four of

every 10 cell phones sold worldwide, and about 400 million cell phones are

forecast to be sold this year, about flat compared with 2001.

"Right now, companies which have the name on the box grab most of the

value," Bryant said. "We would like to see the business model change

to go to more added value in silicon (chips)."

Advertisment

Intel, with its expertise in designing semiconductors, is confident that it

can compete in a business already dominated by powerful players such as Nokia

and Motorola, Bryant said.

Intel, Microsoft tie-up on phones



Last week, Intel and Microsoft announced plans to work together to develop
blueprints for making cell phones. The cheap blocks of silicon from Intel and

software from Microsoft would enable any electronics manufacturer to produce

advanced phones quickly.

Advertisment

Advanced phones typically can send and receive e-mail, pictures and play

games and music, in addition functioning as a normal wireless phone. Intel will

also provide chips for cell phones that would run software from companies other

than Microsoft, part of an increasing effort to be agnostic when it comes to

operating systems.

Intel is looking to second-tier cell phone providers, who do not have the

resources to develop advanced phone software, to be the first customers for its

microchips.

But Bryant conceded that Intel's strategy could fail if these players decide

not to ally with Intel and Microsoft, which have yet to prove themselves in an

industry dominated by Nokia, Ericsson and Motorola.

Advertisment

"Either the second-tier phone providers such as the Japanese become our

allies or they decide it's not worth fighting the battle," Bryant said.

"Sometime this quarter, names will be announced," he said, referring

to customer wins. But Bryant added: "There's going to be tension (with

Nokia, Ericsson and others) and we could lose this."

At the moment, cell phone manufacturers control the entire design,

development and production process of cell phones, including the specifics for

microchips inside the phone.

In response to Intel's and Microsoft's announcement, Nokia quickly came out

with its own partnership with chipmaker Texas Instruments Inc., offering silicon

chips from Texas Instruments and software from Nokia to outside electronics

manufacturers. Texas Instruments is the biggest provider of semiconductors to

cell phones .

Bryant, however, said that Intel and Microsoft would offer a more complete

product incorporating memory and a full set of software for running a cell phone

.

tech-news