Nokia says Intel won't replace TI ... yet

Nokia has no immediate plans to use Intel's processors in its handsets, the phone maker said Thursday, tempering an announcement earlier this week that Intel is building a reference design for a Symbian OS (operating system) mobile phone based on Nokia's Series 60 user interface.

Intel, Nokia and Symbian intend to collaborate on a reference design platform based on Intel's Hermon/Xscale processors, for release sometime in 2005.

"We, along with Nokia and Intel will invest in a reference platform for 3G (third-generation) handsets. This will reduce the time it takes licensees to get a handset to market, and it will reduce their development costs," said Symbian Chief Executive Officer David Levin in a speech at the Symbian Expo in London.

Both Intel and Symbian's Levin declined to commit to any timetable for the reference design or for when actual products design may hit the market. Analysts estimate that it would take at least a year for the reference design project to be completed.

Nokia, which has a long-standing relationship with Texas Instruments (TI) and currently uses TI chips in its Series 60 handsets, did not send representatives to the Symbian Expo. The company said later that it has no immediate intention of replacing TI chips with those from Intel, though the Nokia didn't dismiss the idea of such a move in the future.

"We have not said that we are replacing TI chips in our products with Intel," said Hannu Markus, Nokia's communications manager on Thursday. "It was decided that Intel is going to be developing chips for the Symbian OS and the Series 60 UI (user interface), which is something we licence out to other companies. It does open the door for the future use of Intel, but it is just one option, and not just for us but all licensees of Series 60 UI."

Markus declined to say when products using the Intel reference design may become commercially available, saying Nokia does not speculate on upcoming products.

For its part, TI, based in Dallas, shrugged off the importance to the alliance. "The announcement (Tuesday) doesn't change anything for us," said Bryce Johnstone, manager for TI's worldwide OMAP Developer Network. "There is no difference in our relationship with Nokia."

Intel, which has yet to get its chips into any handsets, has attempted to challenge TI's dominance in the cell phone market, and sees the midrange feature phone market that Symbian is now targeting as its chance to make some headway with handset makers.

"The involvement in the reference design is good from the point of view from Intel in that it has its foot in the door but TI still has an extremely strong position within Nokia," said Alan Brown, principal analyst in Gartner's emerging technologies and semiconductors group. "TI's crown is slipping but it isn't on the floor."

In announcing development plans with Intel, Nokia could also be trying to leverage its position with TI. "I think there is quite a bit of politics being played, I'm sure," Brown said. Though he added any chance of Intel getting its product into Nokia handsets would be a long-term prospect.

"With Nokia, a company does need to establish a relationship over a long period of time to gain its trust. Though Intel does have such a relationship with Nokia on the network side, I would say Nokia is much more cautious and conservative on its handset side," Brown said.

Intel may make quicker inroads through smaller handset manufacturers with limited resources, according to Ben Wood, Gartner's senior mobile communications analyst.

"It's not like we're going to see a flurry of products with Intel chips inside in one or two years, but it does make it easier for smaller vendors with limited technical resources to build phones," Wood said. "For more advanced phones, it adds a little more horse power as well. This does give Symbian licensees some choice."

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