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Intel scores flash memory deal with Ericsson

The computer chip giant lands a deal to sell more than $1 billion in flash memory chips to the cellular phone maker over the next three years, the companies say.

Computer chip giant Intel has landed a deal to sell more than $1 billion in flash memory chips to cellular phone maker Ericsson over the next three years, the companies said today.

In addition, the companies will team to develop flash products capable of storing code and data such as Web pages, email, voice and music. The agreement helps Ericsson develop new products that support content and services made possible by future networks, which will combine voice and Internet capabilities into wireless handheld devices.

Though they wouldn't give a specific amount, an Ericsson representative said the deal is worth approximately $1.5 billion.

Unlike standard memory, flash chips store data even when a phone or computer is turned off, and are used in products such as portable computers, voice recorders, digital still cameras and digital telephone answering machines as well as cellular phones and other data communication devices.

The move marks one of Intel's first pushes into the wireless market. With competition heating up in the PC processor world--and wireless all the rage on Wall Street--Intel recently announced the formation of a group dedicated to wireless and cellular communications.

Intel's latest push to support wireless development reflects the company's growing effort to diversify its business beyond the desktop PC, where it faces plunging prices and more competition than ever from AMD and others. The PC price wars have slowed or decimated traditional revenue streams at many high-tech companies.

Intel's wireless communications and computing group focuses on cellular and wireless communications, providing silicon-based products for various computing and wireless communication devices and data applications in the growing cellular market. These include flash memory, chipsets, reference designs and software, and low-power Intel architecture-based handhelds.