Intel & Future of Mobile Phones

Yesterday during an interview with BBC, Intel CEO Paul Otellini said "We see WiMAX as the most cost-effective way to deliver high-bandwidth wireless broadband" [1] & just about three weeks ago Mr. Chnadrashekhar, head of Intel’s ultra-mobility group was showing a handheld internet mobile device at a conference in San-Jose which has Intel’s latest second generation �atom’ chip inside it. When you consider both of these together, a wireless technology which has strong bandwidth & long range capable of solving last mile problem and a very fast, power optimized, extremely tiny processor, you have a powerful disruptor ready to change course of the entire industry.

Intel would first want to make sure that WiMAX is popular in fixed & mobile communication network. Once WiMAX standard is accepted widely, it would trigger growth of WiMAX enabled handheld devices & notebooks, which will in turn trigger demand for Intel’s WiMAX chip �atom’. When we think about fixed communication, WiMAX will be more popular in rural areas where infrastructure cost will be lower as compared to other fixed communication options like fibre/DSL Cable [2]. Thus WiMAX looks very lucrative option for developing world. 3G provides high mobility but at lower speeds & Wi-Fi provides high speed but in short range. In urban areas role of WiMAX will be more intense as it can fill this void between Wi-Fi & 3G. Intel can make use of this disruptive force to increase their WiMAX infrastructure revenues as well as revenues of WiMAX enabled chips. In the long term, Intel sees all services like media, content management, phone etc becoming internet specific which will be accessed via handheld internet device. They want to make sure that they gain competitive advantage in this era using right connectivity technology (WiMAX) & communications infrastructure (advanced programmable processors). The alliances like �The Open Handset Alliance’ will go a long in ensuring that Intel has right kind of partners to promote use WiMAX network. One has to understand that core competency of Intel is to produce very efficient & tiny microprocessors. In future Intel is also likely to take advantage of this competency by trying position itself as a �green’ company, producing processors like �atom’ which consume very less energy, only 1/10 of energy needed at idle level [1].

This trend will prove disruptive for those players who have made heavy infrastructure investments in Wi-Fi & 3G. Both, mobile device operators (E.g. Nokia, Samsung) & network providers (AT&T) will be affected by this, because

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