Intel-Nokia deal brings mobile, PC, CE convergence closer

As the lines blur between smart phones and smartbooks, the partnership between Intel and Nokia brings the best of both worlds to both companies, and emphasizes the trend of convergence between the mobile, PC and CE industries.

For Intel, the move is viewed as a way to further expand its business into smaller form factor devices, such as mobile Internet devices (MIDs) and smart phones, which are typically powered by ARM-based solutions. Tom Hackenberg, an analyst with the semiconductor group of IMS Research said that "Intel has been promoting the MID platform ever since they began developing the Atom microprocessor. The challenge for Intel has been providing mobile connectivity and power/battery performance that allows for MIDs to compete with current smart phone form factors with regards to talk time. This move should provide them with a foothold in mobile connectivity, and we can reasonably assume that they have the expertise to further refine the Atom's power performance in new generations."

Nokia, on the other hand, while leading the mobile handset business has not pursued the netbook market, although it is openly considering this as a possibility. Bill Morelli, research director of the mobile technologies group of IMS Research commented that "Some of Nokia's motivation behind the partnership with Intel is likely a concern about losing share in the handset markets, more than being aggressive about moving into the other ultramobile device segments." According to Morelli, "Historically Nokia has been very cautious in developing new products. They have a definite approach to new product development with a focus on quality first. The partnership with Intel could provide Nokia with a meaningful differentiator for a netbook/smartbook device."

IMS Research released a study on Emerging Ultra-mobile Device Markets. They report that over 50 million UMDs will ship in 2009, in addition to over 150 million 3G smart phones and nearly 120 million notebooks. In five years, UMD shipments are forecast to reach 212 million. Anna Hunt, report author and principal analyst at IMS Research, comments, "Companies are rapidly creating new categories for the next-generation of devices, be it media phone, smartbook, Internet tablet, or MID, yet the underlying concept is the same: to provide consumers with new mobility platforms. Ultimately, as Apple taught us, the user interface will have a strong impact on who is the most successful."