Intel re-enters market with smartphone

Intel unveiled a smartphone at the Consumer Electronics Show in Las Vegas on Thursday, marking its re-entry into the handset market after an absence of four years.

The move will spark a battle for market share with wireless chipmakers such as Qualcomm.

The world’s biggest semiconductor producer also announced an “app store” for netbooks, a category it has dominated but which is now under attack at the CES from “smartbooks” powered by the selfsame wireless rivals’ processors.

In a keynote speech, Paul Otellini, Intel chief executive, showed off a smartphone made by LG of Korea, using a new generation of lower-power Atom processors codenamed Moorestown. It has a 3D interface, can display HD video and will go on sale in the second half of 2010.

Intel has faced the problem of reducing the power demands of its processors to match the capabilities of its wireless rivals, which make low-power chips based on the designs of the UK’s ARM.

In a Financial Times interview, Mr Otellini said that the new phone and chip showed that Intel had reached the point where it was competitive.

“And it’s going to get better, over time we should have the best silicon in terms of performance and power characteristics,” he said, referring to Intel’s advantage in miniaturisation.

It has reached circuit widths of 32 nanometres – billionths of a metre – this year, ahead of its rivals, and launched a new family of more than 25 “core” processors based on the smaller chips on Thursday.

Mr Otellini said that the smartphone would run on a 32nm chip and Intel would be reducing the size to 22nm.

Intel’s previous attempt to crack the handset market failed and it sold its mobile phone chip business to the chipmaker Marvell in 2006.

The company has been unstoppable in netbooks, dominating the high-growth category with its Atom processor. Mr Otellini revealed a beta version of an app store for netbooks called the Intel AppUp Center, with support from Acer, Asus, Dell and Samsung netbook makers.

The model is similar to Apple’s App store, with software spanning education, entertainment, games and other categories available for free download or purchase immediately.

Mr Otellini said he did not think AppUp was a threat to its partner Microsoft, which he said was taking part with its Silverlight platform for creating apps.

The chief executive said Intel and Microsoft stood to benefit in 2010 as companies looked to upgrade four- to five-year-old Windows XP notebooks and desktops.

“I think people will want to go to the new Windows 7 [operating system] for security and performance reasons, and then a new computer is in order,” he said.

FT Techblog: Full coverage of CES Las Vegas

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