Intel Has Plans

The chipmaker looks to be front and center in the digital revolution of the home.
By Chris Kraeuter ,

Intel (INTC) - Get Report laid out its vision of all things not on the desktop Wednesday, with an emphasis on establishing its prime position in the digital revolution occurring inside the home, as well as improving the wireless connectivity of mobile technology products.

Sean Maloney, co-general manager of Intel's Mobility Group, and Don MacDonald, general manager of the company's Digital Home Group, spoke for the first time at the Intel Developer Forum in San Francisco as leaders of their respective units, which were established in January as part of a companywide reorganization.

The reorganization was designed to replicate Intel's success with its Centrino wireless networking platform. Intel wants to roll out similar groups of technology components for other end markets, such as the desktop computing market and consumer electronics products.

MacDonald demonstrated several new entertainment PCs that allowed users to download and watch a movie in one room while another user in the same house played an online video game being rendered through the same PC. The PC was based on Intel's "Smithfield" processor, now known as the Pentium D, which features two processing cores that can handle two streams of data simultaneously. The entire Intel platform, which includes a chipset and related technologies, was known as "Anchor Creek."

"This is the future of computing in the home," said MacDonald.

But others weren't so ready to accept Intel's sudden clarity about what's ahead for the computing industry.

"The problem with the PC in the living room is it's too complicated and unstable," said Van Baker, vice president and research director with Gartner/G2, the strategic planning arm of Gartner.

Baker noted that the idea of a central computer that acts as the hub of a home -- handling everything from movie and music playing to Internet browsing and personal document management -- holds a lot of promise for Intel and its competitors. However, he also noted that serious hurdles remain.

For example, Baker cited the problems inherent with adding software to such a device -- as users do all the time with standard PCs -- that could subsequently crash or drag down the performance of the entertainment functions of the entire system, like hindering video playback on the TV.

"There are plenty of opportunities in the living room for Intel, but we think Intel needs to broaden its sights a bit," Baker said, citing set-top boxes as one example in which Intel might be able to find a better foothold for its processors.

Even one of Intel's guest presenters said the jockeying that's going on for space inside the home leaves opportunities for different outcomes. Erik Flannigan, vice president of programming for

Disney's

(DIS) - Get Report

Buena Vista unit, demonstrated his company's on-demand MovieBeam rental service with an entertainment PC. But before leaving stage he said MovieBeam isn't ready to tie itself to only one type of technology.

"There are many different types of digital homes and we want to make sure MovieBeam works in all of them," he said.

But Intel isn't going it alone. MacDonald brought a

Microsoft

(MSFT) - Get Report

executive on stage who gushed about the collaboration between the two technology giants. "Microsoft and Intel are really aligned on their vision of the digital home," said Joe Belfiore, general manager of Microsoft's Windows XP Media Center. "The PC can be at the heart of the digital home."

For his part, Maloney talked about the opportunity for Intel in cell phones and notebook computers, especially as broadband access/use continues to spread. "This is a period of incredible innovation going on right now in mobile devices," he said.

Maloney said Intel will roll out silicon for the entire spectrum of 2.5G and 3G phones all the way up to the highest-end phones. Maloney cited customers like

Motorola

(MOT)

,

Samsung

,

PalmOne

(PALM)

and

LG

as examples of traction in this area, but he expected continued momentum as "more and more standard cell phones have computing capabilities."

Along this line, Maloney detailed the company's flash memory plans for this year and beyond. Flash memory, especially the kind that Intel makes, is used heavily in cell phones, as well as other mobile devices. Maloney cited a 90-nanometer multilevel cell chip known as "Sibley," a family of embedded flash products called "Sixmile," and a new flash file system for multimedia applications called "Naubinway." He also said the company has successfully made engineering samples of its 65-nanometer flash chips.

"Flash is alive and well here," Maloney said.

Intel's flash plans should be interesting to watchers of

Advanced Micro Devices

(AMD) - Get Report

, Intel's main rival in the market for NOR flash. After AMD mounted a strong rally in the NOR market in 2004, Intel recaptured the No. 1 revenue leadership position at the end of the year. Most industry watchers attributed Intel's resurgence in the flash market solely to price cuts.

Maloney disputed that and said it comes down to quality. "The reason we have been successful during the past year isn't because of price cuts, it's because of technology." Intel seems to be sending a message with its flash plans that innovation is a key part of its strategy in this market.

Maloney also demonstrated a technology that will be included as part of Centrino in 2006 that will allow a laptop to have one-button connectivity with a cell phone, which could help with downloading or syncing information back and forth between the two products. "We need to get the phone and notebook much more aware of each other's presence," he said.

Maloney also said good things were happening in its transition to WiMax -- a wireless networking standard capable of covering areas up to 30 miles from a base station. Widespread deployment of the standard is hoped to enable truly mobile computing, especially when compared to the short coverage areas that Wi-Fi currently enables.

Maloney said Intel's Rosedale chip for WiMax sampled several months ago and that there are currently 15 carrier trials under way around the world. He stated a goal of 75 WiMax trials under way by this time next year.

"Coverage is key," he said. "It's critical to us to extend that reach."

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