Chipmaker Intel faces long march to mobile salvation

Thu Jan 31, 2013 5:57am EST
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By Jeremy Wagstaff and Clare Jim

(Reuters) - Intel Corp, the world's biggest chipmaker, opened a new front on Thursday in a long and stuttering campaign to get its processors into mobile phones, although it appears to still have a long way to go.

It joined PC maker Acer Inc in Bangkok to unveil the Liquid C1 smartphone, a $330 device running Google Inc's Android operating system, which will be launched first in Thailand and then rolled out across Southeast Asia, one of the fastest-growing markets for mobile phones.

"We've made a conscious effort to go after these fast-growing markets as our first foray into the business," Mike Bell, who heads Intel's mobile division said in a telephone interview.

The company's ninth such device in nine months, the Liquid C1 represents how far Intel has come in convincing bigger name manufacturers to take a chance with its mobile chips as the sales of personal computers and laptops plunge.

But analysts say it also shows how far it still has to go to get a foothold in a market dominated by the likes of Qualcomm Inc and Nvidia Corp.

"First and foremost they have to prove they can play in this space at all," said Scott Bicheno, senior analyst at Strategy Analytics. "There's no obvious technical fault with Intel's chips. It's just that the incumbents are very well established."

Intel has little choice but to get into mobile. It saw revenue fall 3 percent in the last quarter on weak sales of PCs, part of a steady decline in revenue growth since 2009.

It has also watched as devices like Apple Inc's iPad cannibalize sales of PCs.   Continued...

Intel processors are displayed at a store in Seoul June 21, 2012. REUTERS/Choi Dae-woong