Nokia Signs Agreement With Intel

• Posted: Saturday, June 27, 2009
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• Author: pradhana
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• Filed under: Business Analysis

By Adam Leach, Device principal analyst at Ovum

An endorsement for Intel’s Atom processor for mobile devices

Since Intel’s launch of its Atom family of processors it has made no secret that it intends to make a serious play in mobile. The company hopes that taking a slice of the mobile device market will provide an engine for growth outside of its traditional PC and server markets.

However, the current family of Atom chipsets is not suitable for use in handsets and instead Intel has developed a new market segment for larger form factor mobile internet devices (MIDs) positioned above smartphones and below notebooks. To reach further down into the volume part of the mobile market and start reaching the expanding high-end smartphone segment, Intel needs to produce a chipset which can match the power/performance ratio of processors based on the designs of ARM Ltd. This week’s announcement is a sign that at least Nokia believes that Intel’s roadmap is credible and that the company can in time provide a competitive offering against ARM-based alternatives.

Nokia and Intel to collaborate on open source software

This announcement follows Intel’s acquisition of Wind River, a supplier of operating systems for embedded devices. The Wind River acquisition has given Intel a significant foot-hold in embedded and mobile devices, it provides them with the expertise to ensure that its chipsets are optimized towards embedded devices and gives the company access to a wide range of existing Wind River customers in this space. Intel understands the strategic advantage of maintaining control of the software stack that sits above its processors; this acquisition is a kin to Intel buying Microsoft in the early days of the PC market.

The agreement with Nokia continues Intel’s focus on software and strengthens its position. The two companies have agreed to cooperate on key open source projects and use these common technologies in Moblin (Intel’s Linux-based software platform for Atom) and Maemo (Nokia’s Linux-based software platform for its Internet Tablet products). This is good for Nokia as its platform will become more suited for the growing segment of mobile internet devices and netbooks; good for Intel as its platform will become more suited for smaller mobile devices and good news for developers as it will, to an extent, reduce fragmentation in Linux-based devices.

However, the real opportunity here is for Nokia and Intel to combine their efforts and back a single Linux-based platform for mobile devices. This could provide device vendors with a credible open alternative to existing smartphone and netbook platforms.

Intel to license Nokia’s 3G modem technology

To date, Intel has focused on WiFi and WiMax radio technologies. The announcement gives Intel the capability to produce 3G capable chipsets that will make its products more relevant the wider mobile market. It may also be the first sign that Intel is prepared to work with alternative 4G technology in addition to WiMax. It should be noted that this is not the first agreement between Nokia and Intel; in 2006 Nokia agreed to supply a HSDPA module for Intel’s Centrino platform, however, it never resulted in any commercial products. The fact that the current agreement to supply HSPA modem technology is in the context of a broader agreement, should increase the likelihood of commercial success this time.

Agreement provides Nokia with opportunity in MID and netbook markets

For Nokia this announcement also makes sure that it can compete on equal terms with PC and notebook vendors entering the mobile market with Atom-based mobile internet devices and netbooks. /PR-Ovum

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