AMERICAN-STATESMAN STAFF

Published: 7:28 p.m. Monday, Feb. 20, 2012

Intel Corp. is expected to provide more details next week on its plans to become a key supplier for the smartphone market when wireless industry experts gather for the Mobile World Congress show in Barcelona, Spain.

Intel is the kingpin of personal computer technology but a late arrival in a smartphone market crowded with such providers as Apple Inc., Nvidia Corp. and Qualcomm Inc.

Intel has been trying to push into the mobile products market for years without much success. Analysts say a few of its recent attempts — chips called Menlo and Moorestown — fell short of the mark.

But now the giant chipmaker appears to be in better shape, thanks to a massive investment in low-power chip manufacturing technology and the continued efforts of its Austin design team.

Its latest entrant in mobile is Medfield, a smartphone-oriented system chip. The company says it has strong design roots in Austin, where the engineering effort for Intel's low-power Atom chip family is based.

Intel provided some early details about Medfield in January and is expected to divulge more next week in Barcelona. The company also said it has two phone-makers signed up to develop Medfield-based phones — Motorola Mobility and China's Lenovo Group.

The new chip has strong enough performance and power savings to excel at two important smartphone functions: Web surfing and playing video clips, said analyst Patrick Moorhead with Moor Insights & Strategy.

Phones based on the Intel chips are expected to run either Google's Android software or an updated version of Microsoft Corp.'s Windows Phone software.

"There is a lot riding on this show for them," said analyst Will Strauss with Forward Concepts. "This is their chance to prove they are a top-tier supplier in the wireless market."

Strauss said he wants to see whether Intel will be talking about having a faster modem chip that can run with more advanced 4G smartphones. Right now, its chips are ready to work with slower 3G phones.

If Intel doesn't have a 4G solution in the works, "It will certainly cause people to look at them as a second-tier supplier rather than a top-tier player," Strauss said.

The stakes in the smartphone market are huge and expanding, analysts say. IHS iSuppli estimates smartphone sales will total $398 billion this year, up 17 percent from 2011.

It also estimates that smartphones will make up 54.5 percent of all cellphones sold in 2015, compared with just 32.5 percent in 2011.

Moorhead said Intel sees its entry into the smartphone market as a three-to-five-year game plan in which it will introduce increasingly advanced chips that benefit from its industry-leading chip manufacturing technology.

Intel tipped its hand on new developments at a California technical conference this week, when it unveiled a new mobile design called Rosepoint that includes a dual-core Atom processor with an integrated Wi-Fi radio on the chip.

"This is so strategic to Intel because it appears as though mobile devices will outpace the growth of the personal computer over time," Moorhead said.

That means smartphones and tablets could become the dominant devices for consumers, replacing the personal computer market, where Intel dominates as a technology supplier.

"Intel sees the threat coming clearly and they are responding," Moorhead said. "With enough time and money, companies like Intel can accomplish just about anything, particularly when senior management sees it as a mandate. (CEO) Paul Otellini views this as a mandate to get Intel competitive in the mobile space. And they have virtually unlimited resources at their disposal."

The shift in investment toward mobile technology is probably good for Intel's low-power Atom design team in Austin, where the company employs about 1,000 people.

"As the tide rises toward mobility, so do the fortunes of the Atom team," Moorhead said.

He also expects Intel will work closely with major wireless carrier companies to give them better deals for Intel-based phones than Apple currently offers.

"While Intel has a long way to go in proving themselves, they have the start they never had before at a time to take advantage of the mammoth growth in smartphones," Moorhead said. "Never count Intel out."

kladendorf@statesman.com; 445-3622