Intel (INTC) has been trying for years to push its chips into the mobile device market, but had little success and several big failures. They got a nibble in February, announcing a partnership with LG. But today the chip maker landed a big, Finnish fish named Nokia (NOK) as a new partner in mobile devices.
Nokia, the biggest smartphone manufacturer in the world, will immediately begin collaborating with Intel on new devices that run on the California company’s Atom processor.
The deal could represent a big new cash cow for Intel, since 90 per cent of the company’s current revenue stream comes from computer-based chip sales. But it’s not just Nokia that gets access to new tech; Intel will also be able to licence mobile phone technology from the cell phone maker to offer to its other customers, perhaps even LG. Combined, Nokia and LG control almost 50% of the mobile phone market worldwide — though Nokia is particularly losing momentum in smartphones, a key area for revenues and profits.
The deal follows Apple’s 2008 purchase of PA Semiconductor and a chip guru hiring spree. Apple, which uses Intel chips for its Mac computers, does not for its iPhone or iPod portable gadgets. And by beefing up its chip design team, it could be signaling it won’t. So Intel isn’t foolish to team up with one of Apple’s biggest rivals.
The Nokia deal, though, isn’t just about smartphone and netbooks. Intel and Nokia say they are looking to create a whole new class of mobile devices. But details on where the new Nok-tel device might fit into the spectrum — and when, if ever, they might launch — are slim. It’s also worth noting that Intel has long been pushing WiMax, a 4G wireless technology — which hasn’t taken off, especially in the U.S., nearly as much as it would like.
The key will be making things happen beyond today’s press release.