Intel looks to mobile PCs and handheld devices

The upcoming Intel Developer Forum is expected to focus on chips for both traditional notebooks and emerging mobile devices, and not so much on desktop PC processors, according to Intel officials and analysts.

The event's expected focus is consistent with Intel's rising interest in mobile processors, whose demand is growing much faster than demand for desktop PC processors, a stagnant market Intel has dominated for many years.

The show, to be held in San Jose, California from Sept. 9 to Sept. 12, will highlight Intel's developments in chips for embedded and wireless handheld devices, Intel officials have said. Intel will reveal new capabilities of chips based on its XScale technology, a chip architecture for mobile devices based on core technology from ARM Ltd., they have said.

Intel has been focusing much of its attention on the mobile market, although processors for digital cameras, cell phones, and personal digital assistants (PDAs) represent a small portion of Intel's current sales, with revenues of US$532 million in the second quarter of 2002, out of total revenues of $6.32 billion.

Intel announced Tuesday a partnership with Koninklijke Philips Electronics NV to develop a new generation of consumer electronics devices that use Intel's XScale processors. Also, Intel's PXA250 processors will be used in a combination cell phone/PDA device with a retractable keyboard from Bsquare Corp. Other announcements of handheld and consumer electronics devices with XScale processors are expected at the show, according to Intel officials.

"Mobile data access is going to be a key trend for this decade, and Intel wants to be a big part of it," said Kevin Krewell, senior editor of the Microprocessor Report and general manager of market research company MDR in San Jose.

Hopes for sustained growth in Intel's main business, its microprocessors, chipsets, and motherboards for desktop PCs, are falling as the world economy continues to stagnate, and the desktop PC market matures. Several financial analyst firms have reduced their revenue and earnings expectations for the final two quarters of Intel's 2002 fiscal year, and for the entire 2002 fiscal year as well, pointing to a weaker-than-expected back-to-school market. Some details of Intel's new chip for notebook computers, Banias, have already been released, but the company is expected to provide further technical details, according to Intel, and will probably demonstrate a prototype of the chip to the convention attendees, sources said. Further information on the forthcoming 3.0GHz Pentium 4 processor for desktop PCs is also expected at the show, according to Intel.

Banias is Intel's project to develop a processor optimized for a mobile environment "from the ground up," said Frank Spindler, vice president of the Intel corporate technology group in an interview last week.

Rather than just tweak existing desktop processors to perform in a mobile environment, as was done for the Pentium 4-M, Banias represents a "total systems approach" to a mobile processor, said Nathan Brookwood, principal analyst for Insight 64 in Saratoga, California.

Banias will contain 802.11b technology that cuts the amount of power consumed by a processor during wireless transactions, said Brookwood. This lengthens battery life, and also allows Banias to be used in extremely thin and light notebook form factors, he said.

Intel did not immediately return calls seeking comment on the 802.11b technology mentioned by Brookwood.

Designers of mobile processors have always been concerned with keeping power consumption and heat dissipation low, to avoid the types of problems experienced recently by some notebooks from Toshiba Corp. A group of users recently filed a class-action suit against Toshiba alleging the notebook manufacturer did not adequately address the design needs of desktop processors in mobile environments, which led to their Satellite 5005 series notebooks overheating and shutting down without warning.

Initial clock speeds for Banias are expected to be around 1.6GHz or 1.7GHz, which will require a different marketing strategy from Intel that focuses on overall performance instead of exclusively on speed, Brookwood said. Intel generally touts its clock speed advantage in comparison tests, but the Banias chip will have better overall performance than higher clock-speed Pentium 4-Ms, he said.

Rival Advanced Micro Devices Inc. has tried for years to make the argument that clock speed is not the primary determinant of processor performance, and Intel will have to acknowledge that with Banias, he said.

Still, Intel has a huge advantage in the market for desktop and notebook processors over AMD. According to research from Mercury Research Inc., Intel shipped 82.8 percent of desktop and notebook PC processor shipments worldwide, compared to AMD's 15.6 percent.

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