RIM To Use Intel Chip In Next-Generation BlackBerry

Intel Corp. and Research In Motion Ltd., maker of the business-friendly BlackBerry handheld, said Tuesday that the next generation of the device will run on an Intel cellular processor, a deal seen as giving the chipmaker a needed market boost.

The Intel PXA9xx chip, codenamed Hermon, will be used in upcoming BlackBerries that will run on high-speed EDGE, or Enhanced Data Rates for Global Evolution, networks. The move to EDGE represents a "fundamental architectural shift" for the BlackBerry, Mike Lazaridis, president and co-chief executive of the Canadian hardware maker, said in a statement.

EDGE is an enhancement to GSM and TDMA wireless communication systems. The technology increases data throughput to 384 kilobytes per second.

Intel has done well in the market for processors that run applications on advanced cellular phones and other mobile devices, Michael King, analyst for researcher Gartner Inc., said. The Santa Clara, Calif., company, however, has yet to make much headway in the market for cellular processors that are tied to network communications. Intel's rivals include Texas Instruments Inc.

"On the cellular processor side, this gives Intel a bit more momentum," King said. "They've been up and down a lot in terms of momentum and penetration."

While it isn't a huge deal in terms of number of chips sold, RIM is a good ally to have, given the BlackBerry's success among business executives.

RIM's success in the business market has made it the leading handheld device, with more than a fifth of the market for personal digital assistants, or PDAs, according to Gartner. RIM had about 3 million subscribers as of the end of May.

For RIM, the Intel deal probably got the company a decent price on the processor, King said. The price per chip drops as the volume increases, and RIM is a relatively small buyer, given that it ships only several million devices a year. Mobile phone manufacturers, by comparison, ship 10s of millions of handsets a year.

In addition, Intel's focus on speed and extending battery life will help RIM, King said. Battery life is being extended only about 10 percent a year, while the number of power-hungry applications and services running on mobile devices is increasing. Also, Intel will help RIM add features that will keep the BlackBerry competitive with advanced cellular phones coming from Nokia Corp. and other manufacturers.

"In the past, RIM has gotten pinged pretty good on their inability to keep up with the Jonses," King said.

Lazaridis acknowledge that RIM chose Intel because of its advancements in managing power usage.

"We chose the Intel PXA9xx cellular processor because it provides us with the increased processing horsepower we need for future wireless applications, without compromising battery life requirements," he said in announcing the deal from the CTIA Wireless I.T. & Entertainment 2005 conference in San Francisco.

Integrated with the cellular processor is the Intel XScale core for applications and the chipmaker's Micro Signal Architecture core for digital signal processing.