Intel opens up 'Manitoba' territory

The Santa Clara, Calif.-based company has been discussing the chip for some time, but Thursday it will formally announce the details of its "Internet on a chip" device, which will be officially known as Intel PXA800F. The cellular processor includes a 312MHz XScale processor, 4MB of flash memory and a 104MHz digital signal processor, and 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.

As more cell phones begin sporting advanced capabilities such as built-in digital cameras, Web surfing, e-mail and color screens, Intel's new chip is intended to make those features available to the mainstream market, according to Dennis Sheehan, a director of marketing at Intel.

"We want to help ratchet up the capabilities in the mainstream segment," Sheehan said. "The net effect will be a boost in performance with similar battery life...it will lend itself to better experiences and allow them to occur at (the same time)."

The components that make up the PXA800F are also offered separately and in other packages, but combining the components saves space and power, allowing phone makers to design smaller and more feature-rich phones. The PXA800F chip is made on the 0.13-micron process technology.

Intel is targeting a market that is expected to grow dramatically in the coming years but still be smaller than the nondata-related cell phone market. Shipments of data- and voice-enabled devices are expected to grow from 3 million last year to 150 million in 2007. Shipments of voice-only cell phones will increase as well, but to a lesser degree, from 406 million last year to 670 million in 2007.

"One of the biggest challenges cell carriers face is churn," said Richard Doherty, an analyst with research firm The Envisioneering Group.

Churn refers to the loss of a subscriber to a competing service provider. Carriers have tried to reduce that turnover by appealing to subscribers with advanced features, such as being able to send, receive and view images on their phones using built-in cameras. Those features often require a relatively powerful processor.

"By moving XScale onto the chip, they've added a powerful multimedia processor, not just a DSP, which can offer customers an improved experience," Doherty said.

Longtime rivalry
The PXA800F chip also marks the escalation of the ongoing competition between Intel and Texas Instruments in the cell phone and handset business. For years, TI has been the dominant supplier of DSPs, or digital signal processors, a crucial component that tunes signals inside handsets, while Intel has been the leader in flash memory.

TI has deals with most of the major-brand cell phone makers, but Intel is making headway with Asian contract manufacturers, which increasingly will take over phone design and manufacturing for the branded folks. Intel has also been the primary supplier of microprocessors and flash in the Pocket PC market. TI, meanwhile, supplies microprocessors to handheld market share leader Palm.

Phone makers have sample versions of the chips now and are developing devices that will be available later this year or early next year. A handful of original design manufacturers in Asia, Korea and Taiwan will be coming out with devices.

With the coming era of integrated parts, each company is leading with its strengths. Integration cuts power and costs, so manufacturers love it, allowing the chipmaker to colonize more real estate inside phones.

Manitoba, for instance, includes flash, a microprocessor and a DSP but not radio frequency chips, which catch and transmit signals over the air, or a power management chip. RF chips are analog devices (meaning that they deal with real-world gradations of temperature or sound) and are generally made with different processes and materials than digital chips (microprocessors and the like that deal only with ones and zeros). Intel has a very limited history in analog design.

Integrating the radio chip doesn't add much benefit at this time, said an Intel spokesman. Still, Intel plans to come out with radios made on regular silicon processes. Some of these chips will even be reconfigurable, so that they can be used alternately as receivers for Bluetooth, Wi-Fi or other wireless systems. Eventually, these chips will be integrated into microprocessors.

TI, by contrast, has long been a leader in analog chips, and under its "cell phone on a chip" strategy, it plans to integrate a microprocessor, DSP and radio functions. The company won't, however, incorporate flash. It has sold microprocessors with integrated flash before, and cell phone manufacturers have not bought them, said Dennis Buss, vice president of silicon technology development at TI.

"The radio challenges at the system level disappear," said Bill Krenik, advanced architecture manager at TI.

The first of these integrated chips will ship to manufacturers in 2004 and appear in phones in 2005. Intel is also expected to have an integrated chip as well.

TI will encourage cell makers to recover some of the cost normally associated with integration by using new types of packaging techniques that stack the flash memory on top of other chips. This vertical arrangement reduces board surface area and hence costs. Intel is also promoting vertical packaging.

Krenik and Buss both admit that adding radios to silicon has raised eyebrows. A number of academics and analysts have argued that it can't be done economically, they said.

Nonetheless, TI remains confident. The company started work on silicon radios four years ago and decided 18 months ago that experimental data showed it would be feasible. Studies at the University of Oulu in Finland also validate the data. Patents regarding this process are pending. The company will discuss its plans in more detail in the future.

A small Bluetooth radio released earlier this year reflects the direction TI is headed, Krenik added.

Cell phones aren't the first technology field in which Intel and TI have raced. TI founder Jack Kilby and Intel founder Robert Noyce each invented the integrated circuit around the same time in the 1950s.