The Intel experience

Intel has been making some interesting strategy announcements over the last couple of days, explaining how it intends to restructure its product development around a vision of “ubiquitous broadband based on open standards…performance and power innovation on computing and phone platforms.” The chip giant is putting mobility at the heart of its future roadmap, significantly beyond anything it has done in the past with its XScale and Centrino platforms.

These announcements are noteworthy for several reasons, not least because of the huge resources Intel can invest in marketing. As it demonstrated with Wi-Fi and Centrino, the company can afford to spend hundreds of millions of dollars on building consumer awareness and supporting the marketing efforts of its hardware customers. It has certainly paid dividends with Centrino and I expect Intel to follow a similar pattern with its future mobility efforts.

At the most fundamental level, Intel has traditionally struggled in the mobile telephony business because it hasn’t been able to meet the demand for relatively basic, highly power efficient processors. Its StrongARM and XScale chipsets (both based on technology from British processor designer ARM) only managed to find a home in high-end smartphones and wireless PDAs, primarily because they were expensive to buy, complex to integrate and required a lot of battery power.

Intel’s strategy of ‘ubiquitous’ mobility is obviously all about increasing the market for its chips. To do this, Intel knows it needs to encourage the use of more complex services on mobile devices, thereby increasing the demand for advanced processors and tilting the market in its favour.

Part of the problem is the speed of wireless networks. There is always going to be relatively little demand for processing power when the amount of content and the size of applications is limited by 2.5G cellular networks which deliver an experience equivalent to fixed dial-up. If Intel wants to sell advanced, high power chipsets to mobile device manufacturers, it needs to encourage the development of networks which can deliver true multimedia content.

Hence Intel’s interest in WiMax. Capable of delivering a broadband experience over a metropolitan area, WiMax is seen by Intel as a key enabler of advanced computing features on mobile devices. Intel is pouring resources into WiMax in exactly the same way as it did with Wi-Fi.

It is still very much an open question as to whether WiMax will succeed. Crucially the standard is backed by Nokia, Ericsson and Motorola in the cellular industry. However, there are other alternatives out there, such as Flarion’s Flash-OFDM (recently acquired by Qualcomm) and there are already some nervous voices being sounded in the network operator community about WiMax’s disruptive potential.

Intel is starting to get to grips with the fundamentals of the mobile user experience. It is notable that Sean Maloney, executive vice president and general manager of the Intel Mobility Group, made a point of emphasising the importance of power efficiency as a key metric for future mobile chipsets, rather than dwelling on traditional stats like processing speed. If Intel wants to become a key part of the cellular industry value chain, it will need to demonstrate it can deliver in basic areas such as power management, pre-integration and pricing before it can drive forward with a new agenda of ubiquitous, high performance mobile computing.

The market for Intel’s vision doesn’t exist at the moment, in the same way that 5 years ago there wasn’t a market for home-based wireless LAN connectivity. The challenge it faces in the cellular industry is far greater than that posed by encouraging the adoption of Wi-Fi. The rewards, however, are also much higher and Intel is not only right to pursue this opportunity – it actually has relatively little choice if it wants to ensure its long-term growth prospects.

This is just one example of how leading companies in the technology and telecoms industries are realising that delivering a new customer experience requires more than just an investment in R&D or acquiring a new product line: it needs to be a catalyst for strategic change throughout the organisation. This is a topic which will be covered in detail as part of our opening panel session at MEX on 6th September, entitled: “Redefining the mobile user experience.”

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    Joe Jasin

    In my personal view, this is a well written articulation of Intel’s strategy and the overall foresight of “ubiquitous” use of the IP technology and its impact on low and high bandwith networks. I have to commend the creators of this MEX conferrence, I truly wish I was able to participate as speaker and/or audience member, I am unable to with my schedule demands. Best regards and respectfully, JOE JASIN Partner of Wireless Blueprint, LLC and CTIA – W.I.C. Content-Download committee member USA.

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