TI gears up to take Intel head on

SAN FRANCISCO: Texas Instruments, the top maker of semiconductors for cell phones said it was well-positioned for the pending battle over the wireless Internet phone market with Intel Corp. Earlier on Thursday, Intel unveiled a chip for new generation phones that combines a processing, flash memory and communications on a single piece of silicon. The chip will allow users to do videoconferencing and play online games, among other applications.

Samples of Intel's PXA800F, code-named "Manitoba," will appear in phones later this year, with large-scale production likely in the first half of next year, Intel said. Texas Instruments, however, said there are smartphones and personal digital assistants on the market now that contain its integrated wireless OMAP chips.

Those chips have integrated digital signal communications processors, SDRAM (synchronous dynamic random access memory) and microprocessors, said Alain Mutricy, general manager of TI's OMAP wireless processor group. "We are far ahead of Intel," Mutricy said, a claim that Intel disputed.

Both companies claim their approaches are better, with either lower power consumption or faster speed and tighter integration or cheaper memory.

"It's going to be quite a horse race and the odds are that both companies are, to some degree, going to rescue the cell phone industry" by delivering advanced functionality, said Richard Doherty, research director at The Envisioneering Group, a market research and technology assessment company in Seaford, New York. "Intel has raised the bar."

Dallas-based Texas Instruments has an advantage being the top maker of semiconductors for cell phones, while Intel is a leader in selling flash memory to handset makers and Pocket PC-based PDAs, both companies said.

Intel hasn't announced any contracts, but said it is in talks with the world's top handset companies. Texas Instruments OMAP customers include NEC Corp., Matsushita Electric Industrial Co. Ltd. and Fujitsu Ltd., which all supply phones to NTT DoCoMo; Nokia, the No. 1 maker of cell phones; and Palm Inc., the No. 1 maker of PDAs.

After the Intel announcement, shares of Texas Instruments fell 2 percent, or 34 cents, to close at $14.91 and shares of wireless technology company Qualcomm Inc dropped 7 percent, or $2.65, to close at $33.91.

© Reuters