Intel Hopes To Enter Smartphone Chip Market

Intel already holds a strong position in the personal computer and server market. But, like other companies, Intel wants more. Moving forward, Intel’s executives believe there’s a good potential to increase Atom's traction in adjacent markets by targeting these low-cost, energy-efficient chips at various multifunctional consumer gadgets including smartphones and other portable devices that access the Internet. “Atom is Intel's growth engine,” said Intel spokesman Bill Calder.

Breaking into the smartphone market won’t be easy, however. The market is currently owned by companies such as Qualcomm, Texas Instruments, STMicroelectronics, MediaTek, and Infineon Technologies. All of these companies use a very successful chip design that is licensed from a small United Kingdom firm, ARM. ARM’s design has been popular because it uses little power which is crucial for battery life in mobile electronics.

Intel’s high-performance microprocessors typically consume too much power for mobile phones, which is part of the reason Intel created the Atom platform. As Intel’s smallest chip, Atom is relatively inexpensive. Atom is also designed to use little power. Atom has already found great success in the netbook market and has also been tapping into the Mobile Internet Device market. However, Atom has not yet entered the Internet-capable phone market.

Sharp WS016SH Running Windows Vista

Next year, Intel plans to introduce a new version of Atom that is even more power efficient than the one we have today. Code-named Moorestown, the chip will offer a 50x power reduction at idle and reportedly will deliver enough horsepower to handle 720p video recording and 1080p quality playback.  In 2011, Intel plans to introduce an even smaller and less power hungry version of the chip known as Medfield. 
With this upcoming chip, Intel will begin targeting the smartphone market.

Intel Atom Die Map - Click for high res

Medfield will be built on Intel's budding 32nm process technology and is said to offer the opportunity to reduce board size, operating and standby power dramatically.  Medfield's displacement area is targeted at about half the size of a credit card.

Intel will certainly face some competition in attempting to displace ARM-based chips. Not only are the chips ubiquitous in phones, but now they’re also starting to target other mobile computing markets Intel is currently pursuing. For example, in May, an HP executive said the company is considering making netbooks using ARM chips. In June, ARM announced that four personal computer manufacturers are planning to introduce ARM-based netbooks sometime this year.

Analysts are mixed as to whether this latest attempt from Intel will succeed or not. Some are concerned that Atom could cut into Intel’s sales of pricier microprocessors, hurting the company overall. Intel dismisses these concerns, saying Atom is opening new markets and hasn’t had a major affect on the sale of its other chips.

Regardless, Intel will enjoy a lower profit margin for the low-priced Atom than from other microprocessors. As a result, Intel will have to sell large quantities of Atom chips in order to make the product worthwhile.
Tags:  Intel, smartphone, Atom, ARM, chips