re: The Wintel Clash
Intel's strategy is to dethrone cell phone manufacturers such as No. 1 Nokia Oy of Finland and U.S. based Motorola Inc.
Intel is looking to second-tier cell phone providers, who do not have the resources to develop advanced phone software, to be the first customers for its microchips. ... Intel's strategy could fail if these players decide not to ally with Intel and Microsoft, which have yet to prove themselves in an industry dominated by Nokia, Ericsson and Motorola.
>> Intel Sets Aggressive Goals For Cellphones
Lucas van Grinsven
Duncan Martell
Reuters
01 March 2002
Intel Corp., the world's largest chipmaker, has set even more aggressive goals than its partner Microsoft Corp. to supply the building blocks for mobile phones, its chief financial officer said on Thursday.
Microsoft, the world's largest software maker, said last week that it aims to have its software on 100 million cellular phones within three to five years, up from zero today. At current levels, that target would represent a 25 percent share of the global market.
"I would not be satisfied with 100 million phones" in the next three to five years, Andy Bryant, chief financial officer for Santa Clara, California-based Intel, told Reuters in a round-table discussion here.
Intel is targeting the mobile phone industry as one of its next engines for growth, seeking, at least partially, to recreate its success and business model in the personal computing industry. Intel's microprocessors power about 80 percent of the world's PCs.
Bryant said Intel's strategy is to dethrone cell phone manufacturers such as No. 1 Nokia Oy of Finland and U.S.-based Motorola Inc. Nokia makes almost four of every 10 cell phones sold worldwide, and about 400 million cell phones are forecast to be sold this year, about flat compared with 2001.
"Right now, companies which have the name on the box grab most of the value," Bryant said. "We would like to see the business model change to go to more added value in silicon (chips)."
Intel, with its expertise in designing semiconductors, is confident that it can compete in a business already dominated by powerful players such as Nokia and Motorola, Bryant said.
Intel, Microsoft Tie-up on Phones
Last week, Intel and Microsoft announced plans to work together to develop blueprints for making cell phones. The cheap blocks of silicon from Intel and software from Microsoft would enable any electronics manufacturer to produce advanced phones quickly.
Advanced phones typically can send and receive e-mail, pictures and play games and music, in addition functioning as a normal wireless phone.
Intel will also provide chips for cell phones that would run software from companies other than Microsoft, part of an increasing effort to be agnostic when it comes to operating systems.
Intel is looking to second-tier cell phone providers, who do not have the resources to develop advanced phone software, to be the first customers for its microchips.
But Bryant conceded that Intel's strategy could fail if these players decide not to ally with Intel and Microsoft, which have yet to prove themselves in an industry dominated by Nokia, Ericsson and Motorola.
"Either the second-tier phone providers such as the Japanese become our allies or they decide it's not worth fighting the battle," Bryant said.
"Sometime this quarter, names will be announced," he said, referring to customer wins. But Bryant added: "There's going to be tension (with Nokia, Ericsson and others) and we could lose this."
At the moment, cell phone manufacturers control the entire design, development and production process of cell phones, including the specifics for microchips inside the phone.
In response to Intel's and Microsoft's announcement, Nokia quickly came out with its own partnership with chipmaker Texas Instruments Inc., offering silicon chips from Texas Instruments and software from Nokia to outside electronics manufacturers. Texas Instruments is the biggest provider of semiconductors to cell phones .
Bryant, however, said that Intel and Microsoft would offer a more complete product incorporating memory and a full set of software for running a cell phone. <<
- Eric - |
