Intel Outlines Cell Phone Strategy

Intel Corp. detailed its strategy to capture more of the cellular phone market Wednesday, showing off a new family of chips that support next-generation data networks and are powerful enough to handle video conferencing.

Though it's the leading maker of personal computer processors, Intel has struggled to win over cell phone makers. Last year, it reorganized the business and took a $600 million fourth-quarter charge after the unit failed to meet expectations.

The company's upcoming offering, code-named Hermon, can support dual radio modes and includes features that will help reduce the number of dropped calls as well as improve signals on third-generation, or 3G, networks.

Paul Otellini, Intel's chief operating officer, also demonstrated a prototype that supports three wireless radios in the same device - Wi-Fi, Bluetooth and GSM/GPRS, a cell phone standard. Such designs can be used by phone manufacturers to design new products.

Eventually, Intel plans to further reduce the size of the individual components by integrating more features into fewer chips. Instead of separate radios for each service, software will be able to tune a single device to whatever frequency is needed.

'Our track record of innovation and integration - putting more functionality in a smaller footprint -will have a profound effect on these market segments where cost is a critical factor,' Otellini said at the 3GSM World Congress 2004 in Cannes, France.

So far, Samsung and Motorola ship Intel-powered phones in limited quantities. On Wednesday, European phone company Orange said it would work with Intel on next-generation devices.

Shares of Intel closed up 42 cents at $29.62 in Wednesday trading on the Nasdaq Stock Market.

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