Intel Corp. and Nokia Corp. have announced an agreement to collaborate in the development of next-generation mobile computing devices that the companies said would go beyond the current generation of products as they fight to maintain dominance in their respective market segments.
The agreement calls for extensive joint product development efforts in the mobile communications market with plans for the two companies to support each other's efforts in hardware, software and internet-related offerings.
Under the agreement announced Tuesday (June 23), Intel would fund the development of chipsets for Nokia products with the collaboration spanning open source software programs. Intel said it will acquire a Nokia HSPA/3G modem license "for use in future products," as part of the transaction.
It appears the two companies want to establish the basis and partnership for a new generation of mobile computing products as their two market segments—personal computing and wireless communication—continue to converge.
The agreement aims to "marry the best features and capabilities of the computing and communications worlds and will transform the user experience, bringing incredible mobile applications and always on, always connected wireless Internet access in a user-friendly pocketable form factor," the companies said in a statement.
"We will explore new ideas in designs, materials and displays that go far beyond devices and services on the market today," said Kai Oistamo, executive vice president, devices at Nokia, in a statement. "This collaboration will be compelling not only for our companies, but also for our industries, our partners and, of course, our consumers."
Intel and Nokia already dominate their market segments but the microprocessor giant has already established a monopoly in the PC market with about 80 percent market share. Intel also sees growth opportunities for itself in the communications market where broadband connectivity is driving growth even in the midst of a major market downturn.
For Nokia, a successful partnership with Intel would allow it race ahead of rivals nibbling at its heels, including Apple Inc., which has established a major presence within only a few years in the market for smartphones with its iPhone.
Apple last week rolled out the iPhone 3Gs, the latest update to its wildly popular wireless handset, which in one weekend sold more than one million units.
Nokia has a range of products that rival the iPhone but no single product from the Espoo, Finland-based company has garnered the popularity of the iPhone. The company has also been promoting open source technology and indicated the latest agreement with Intel would help push this further.
It's likely any future chipsets developed by Intel using any technology licensed from Nokia would also be available to other wireless handset developers. More important, the deal will give Intel the opportunity to become one of Nokia's chipset suppliers, a goal the company has been long pursuing.
"The Nokia modem license complements Intel's broadband wireless technologies and will enable the company to extend the chipset solutions incorporating Nokia's modem technologies across its mobility offerings in the future," Intel said in the statement.
Nokia currently sources chipsets from five suppliers, including Broadcom, Infineon Technologies, Qualcomm, ST-Ericsson and Texas Instruments.