First Intel-Powered Smartphone Expected This Week

Intel’s move into the smartphone sector is expected to take place this week with the launch in India of the first smartphone running an Intel processor.

Speaking to reporters and analysts in a conference call to announce the giant chip maker’s first-quarter financial results, Intel CEO Paul Otellini was outlining the key points the company expects to hit as 2012 wears on – particularly in the mobile space – from more than 100 new Ultrabook designs to more devices powered by next-generation “Ivy Bridge” processors.

Intel Smartphone

“We expect to see another important milestone for our business later this week: The launch of the world’s first Intel architecture based smartphone,” Otellini said.

He noted the announcements Intel executives made with Lenovo and Motorola Mobility at the Consumer Electronics Show in January, in which the two device makers said they planned to sell smartphones this year powered by Intel’s Atom X2460 “Medfield” platform. At the Mobile World Congress show in February, Intel made similar announcements with ZTE and Orange.

Otelllini declined to elaborate on what the new phone would be. However, according to reports, the phone will come from Lava International and will be available in India. Quoting an unnamed source, IDG News said the Xolo X900 will be powered by a single Atom Z2460 chip and feature a 4.03-inch screen. Intel and Lava initially announced the phone during the Mobile World Congress show.

Company Financials

For the quarter, Intel made $2.7 billion (£1.7bn) in the first three months of 2012 on revenues of $12.9 billion (£8bn). By comparison, during the same period last year, Intel earned $3.16 billion (£2bn) on $12.85 billion (£8bn) in revenues.

Revenues for Intel’s PC Client Group – which includes chips for PCs, tablets and smartphones – fell from $8.62 billion (£5.4bn) in the first quarter of 2011 to $8.45 billion (£5.3bn) this year, and its Data Center Group, which sells server chips, saw its revenues stay flat, at $2.45 billion (£1.5bn).

Mobility was a key theme running throughout the discussion of Intel’s first-quarter financial numbers. Company officials for more than a year have talked about making an aggressive push into the mobile computing space, challenging chip designer ARM Holdings’ dominance in the lucrative smartphone and tablet markets. This will be the year that Intel makes that push.

Mobility Push

The chip maker over the next few months will roll out more 22-nanometer Ivy Bridge chips that will be used to power the next round of Ultrabooks and make their way into tablets. In addition, the Atom Medfield chips also will be found in some tablets, as well as smartphones, according to the company.

The Ivy Bridge chips – the first quad-core versions already are shipping in volume , primarily for desktops, and will be followed by other versions for laptops and Ultrabooks – are expected to offer better performance and significantly greater power efficiency and graphics capabilities than the current “Sandy Bridge” offerings.

Beau Skonieczny, an analyst with Technology Business Research (TBR), said the ivy Bridge chips will be key drivers for Intel in 2012, even as the uncertainty continues to dog Intel-based Ultrabooks and mobile devices.

“[T]he quad-core iterations of Ivy Bridge will appeal mostly to enterprises and SMB customers looking to adopt all-in-one desktops,” Skonieczny wrote in an email. “However, TBR believes dual-core Ivy Bridge processors – which will shortly follow the quad-core versions – will drive more rapid growth for Intel, as demand for notebooks and premium Ultrabooks continues to grow.”

Ultrabook Move

Ultrabooks are an extremely thin and light form factor that is designed to offer the productivity and performance of traditional laptop with features found in tablets, including long battery life, instant-on capabilities and later this year, touch screens. Analysts say the Ultrabooks are a way to help Intel bolster a slowing PC market while creating another avenue into the mobile computing space.

Otellini said there already are 21 Ultrabooks on the market, and more than 100 designs that will be released over the next few months, most of them in time for the lucrative back-to-school shopping season. Pricing has been a key issue in the initial Ultrabooks – most carry price tags of more than $1,000 (£628) – but Otellini said the next generation will offer more affordable, “mainstream” prices. He said he also is confident that Intel will reach its goal of having Ultrabooks account for 40 percent or more of all laptops sold by the end of the year.

Intel also earlier this month kicked off a massive marketing and advertising campaign behind Ultrabooks that officials said will cost hundreds of millions of dollars.

Otellini said a key to the success of Ultrabooks this year also will be meshing them with the upcoming release of Microsoft’s Windows 8 operating systems, which will support touch-screen technologies. The new OS also will support system-on-a-chip (SoC) architectures like ARM’s, which sees an opportunity not only to defend its presence in smartphones and tablets, but also to move into low-power notebooks, similar to Ultrabooks.

In January, ARM CEO Warren East dismissed Intel’s mobile ambitions as “good enough” technology, telling Reuters that while the larger chip maker may get some design wins, it doesn’t have the capabilities to take over the smartphone and tablet spaces.

“It’s inevitable Intel will get a few smartphone design wins,” East said at the time. “We regard Intel as a serious competitor. Are they ever going to be the leaders in power efficiency? No, of course not. But they have a lot more to offer.”

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