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Intel kicks off carrier collaboration

Looking to boost use of data services, the chipmaker begins working with wireless carrier mm02, and it may have other companies lined up.

Chipmaker Intel said Monday it's taking the unusual step of working with a phone company to fine-tune cell phones that use its chips.

The arrangement may be the start of a trend for other chipmakers and service providers as the telecom industry seeks to boost revenue.

Intel will collaborate with U.K.-based carrier mmO2, the companies announced Monday. Together they will chose new wireless services that mmo2 will offer for its cell phone, which is based on Intel's PXA 255 processor. Then, the companies will add layers of new software to improve the services, said Intel spokesman Mark Miller.

Other cell phone providers using Intel chips, including AT&T Wireless, may follow suit, Intel said.

This is a break from the usual way chipmakers market their cell phone processors. Usually, a chipmaker supplies its silicon to a handset maker, then disappears from the picture.

"What we're doing is a lot like what you can do with your car," Miller said. "You get a core set from the factory--in this case a carrier gets a mass-produced phone. Then, you maximize the horsepower."

Gartner analyst Mike King said he believes Intel competitors will likely try to match the company's efforts. Texas Instruments and Motorola are the company's main rivals.

Miller and King said they believe the cooperation will improve service, which they said should lead customers to increase their use of wireless data services.

Many carriers offer the services, such as picture messaging, as they hunt for new sources of revenue. But so far wireless data has not caught on worldwide. Use is especially low in the United States, where only about 14 percent of all wireless dialers subscribe to data services.