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Intel makes gains in handheld market

A relative newcomer to the handheld field two years ago, Intel has steadily picked up market share of chip sales as advanced devices have required higher performance.

A relative newcomer to the handheld field two years ago, Intel has steadily picked up market share of chip sales as advanced devices have required higher performance.

During Intel's spring analyst meeting in New York on Thursday, the company's senior vice president of wireless communications and computing, Ronald Smith, said the chipmaker's efforts as a supplier for handheld makers have borne fruit.

Citing data from research firm IDC, Smith said Santa Clara, Calif.-based Intel went from no presence in the chip market for handhelds to nearly 35 percent in just over two years. And that's not including a design win from handheld market leader Palm earlier this quarter for its Tungsten C device.

"First was the news of the rise of (Microsoft's) Pocket PC, which helped us gain significant market share," Smith said in an interview with CNET "And last quarter we started shipping into the other camp...we're also No. 1 in the Linux camp. If you extrapolate, we're on track to hit 50 percent by the end of the year...As things converge with cell phones, there is more room for us to grow."

Still, Motorola continues to hold, by a wide margin, the No. 1 position in the market for chips used in handheld devices, according to IDC analyst Kevin Burden.

Intel's StrongARM SA-1110 processor and its XScale chip for handhelds have found their way into devices from many major handheld manufacturers, including Palm, Sony, Hewlett-Packard and Dell Computer.

Smith said that before the appearance of the StrongARM processor, which was Intel's first handheld chip, devices using Microsoft's Pocket PC 2002 operating system did not have enough horsepower to support features such as clear digital audio and video playback. But the 206MHz of performance from StrongARM chips let Microsoft and its hardware partners promote and develop higher-end capabilities that drew increasing interest from consumers.

Intel's next generation of handheld chips, XScale processors for handhelds, now come in speeds that top 400MHz, helping devices support even higher-end features, such as Wi-Fi connectivity and digital content playback, Smith said.

Cindy Wolf, an analyst with research firm In-Stat/MDR, partly agreed with Smith.

"In 2001, Motorola had about 80 percent of the market, but when Pocket PC required ARM technology and Motorola didn't offer ARM, everyone had to go with Intel," Wolf said. "Motorola dropped the ball by not adopting ARM fast enough."

Motorola eventually did release an ARM-based processor for handhelds, called the Dragonball MX1.

Wolf added that In-Stat/MDR's numbers were not as aggressive as IDC's, estimating that Intel's share of the market for handheld processors was around 20 percent in 2002. But she said Intel had a good chance of doubling its share by the end of 2003.

Intel has been aggressive in preparing to further pursue smart-phone makers with its upcoming "Internet on a chip" processor, code-named Manitoba, but formally called the Intel PXA800F. The cellular processor includes a 312MHz XScale processor, 4MB of flash memory and a 104MHz digital signal processor. It will be available to phone makers in the third quarter for $35 each in volume. The chip will be used in cell phones that run on Global System for Mobile Communications (GSM) and General Packet Radio Service (GPRS) networks.

Intel is also working on its next-generation XScale handheld processor, called Bulverde, according to sources. The new chip will largely be aimed at devices such as HP's iPaq, rather than at cell phones, and will likely be significantly faster than current handheld processors.