Mobile phones with Intel inside

AMSTERDAM: Microsoft and Intel will have their first jointly designed mobile phone hit the market this autumn, as shown to consumers by Taiwan's MiTAC on Tuesday.

It will be the first mobile phone to use a chipset by Intel, the world's largest semiconductor maker. Intel, like Microsoft, has identified the 450 million units a year mobile phone industry, as an opportunity outside the slow-growing PC market.

MiTAC, a computer maker expanding into handheld devices, showed the new model 8380 on its Mio Web Site (http:/www.justmio.com). Mio is the brand name MiTAC uses.

Intel officials in Europe could not immediately comment, and MiTAC was not immediately available.

The phone is based on a reference design provided by Intel and Microsoft that was presented first in early 2002. It will play music and video, send email, snap pictures and keep a diary, alongside the ability to make voice calls. This design, announced at the world's largest mobile trade show in Cannes, France, sent shockwaves through the industry as many feared the two could commoditize mobile phone technology in the same way they had done with personal computers where the duo dominate in key operating software and microprocessors.

Established handset makers were reluctant to work with the new players, forcing Microsoft and Intel to first team up with Asian contract electronics manufacturers like MiTAC and High Tech Computer (HTC) eager to get into the new business.

Recently, it was reported that the No. 2 global handset maker Motorola will launch a Microsoft phone later this year.

MiTAC said on its Web Site the clamshell phone will come out in Europe by the end of the third quarter, although industry sources said it would more likely be the start of the fourth quarter, at between 500 and 530 euros before subsidies. Several European mobile operators are expected to offer it to consumers.

© Reuters