Intel Expects To Ship 30 Million Cell Phone Processors This Year - InformationWeek

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Intel Expects To Ship 30 Million Cell Phone Processors This Year

The chipmaker plans to introduce its second-generation processor for cell phones in the second half of this year.

Intel has devoted years of effort and tons of money trying to make its mark in the cell phone market, without a great deal of success. But the chipmaker says it has turned the corner in its effort to become a supplier of processors to the cellular phone market, projecting it will ship nearly 30 million units this year.

Intel will introduce its second-generation processor for cell phones in the second half of this year, said Sean Maloney, executive VP and general manager of the mobile platforms group, at the company's wireless and mobility conference in San Francisco this week. The company expects to ship around 30 million processors to the cell phone market this year, and exit the year on a run-rate "significantly" greater than 30 million a year.

Maloney said the Intel was late to market with its first-generation cell phone processor, code-named Manitoba, which also failed to meet performance expectations. Intel was able to gain valuable experience in the market, however, and the second-generation processor, code-named Hermon, is expected to fare considerably better, he says.

"This was a totally new business," Maloney said. "We had a new design and developed a new architecture, which was a huge undertaking."

Will Strauss, an analyst with Forward Concepts, estimates that Intel has spent between $4 billion and $5 billion trying to establish itself in the cell-phone processor market, which includes several acquisitions.

The opportunities are significant. The segment probably represents the largest single market for processors, with about 680 million cell phones shipped in 2004. Texas Instruments has dominated the cell phone processor market, with a market share of 50% or more. TI has had a close association with long-time cell phone market leader Nokia. With the cell phone market expected to grow to around 1 billion units over the next few years, gaining even a 15% share of the market would represent 150 million new processor sales for Intel.

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