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Intel's New Chip Gives Hand-Helds Expanded Scope

Posted on: Monday, 12 April 2004, 06:00 CDT

Apr. 12--Intel Corp. plans to announce today a new generation of chips that could turn hand-held devices like PDAs and cellular phones into high-end digital cameras and even movie players.

In introducing its Bulverde microprocessor, the Santa Clara-based chip giant continues its strategy of expanding beyond its traditional business of supplying chips to the personal computer market.

Much of the research and marketing of the Bulverde is done from Intel's Folsom campus.

While the Bulverde is based on a current Intel design, it includes a number of improvements that could give hand-held devices far more punch, experts say.

For example, the chip could allow cellular phone makers to build cameras into their devices that take pictures at up to 4 megapixels of resolution, about four times better than what's currently available in camera phones.

It also has enough processing power to play DVD-quality video clips, high-end video games and even allow wireless video conferencing.

Bulverde includes technology to minimize power consumption, an important issue on battery-operated devices such as cellular phones.

Intel spokesman Dan Francisco said the first Bulverde-equipped devices would roll off production lines later this month. The chip will likely show up first in PDAs, which, because of their larger screen size, can take advantage of the microprocessor's advanced graphics capabilities.

Because manufacturers haven't yet announced such products, it's unclear how much the new devices will cost.

While analysts say Bulverde is not a quantum leap in technology, it contains enough new features to possibly drive sales of new devices.

"What's cool about Bulverde is that it allows some amazing things to take place on a PDA or smart phone," said Tom Starnes, vice president for research at Gartner Inc. "It can handle a tremendous diversity of media applications, both video and audio, and the quality is very high."

Starnes added that combining all these capabilities might mean the development of an all-in-one unit that includes the functions of a telephone, PDA, music player, camera and other devices.

"This gets us to the point where people might say they don't need a digital camera," he said.

But Intel's success depends on how soon consumers will demand that kind of capability from their hand-held devices.

Alan Varghese, a wireless analyst at ABI Research in Atlanta, said Intel is trying to anticipate what the consumer will want and is trying to build those capabilities into its chips.

But Intel also must persuade electronics giants such as Samsung and LG Electronics to include its chips in their newest products, Varghese said.

One advantage for Intel is that it can package Bulverde in a "stack" with flash memory chips, using up less space than a processor and memory chips sold separately.

"Intel has strong memory capabilities, and that's a strategy they have to use," Varghese said.

If Bulverde is a success, it would be a huge boost for the division in Folsom that designs and markets the chips as well as flash memory products.

That part of the business hasn't been profitable since 2000 and has been plagued by fierce competition, slow adoption of its products and mistimed price increases.

Last December, Intel merged that division with another that makes communications chips for telephone networks.

In the fourth quarter, the combined division reduced its loss to $145 million, from $216 million in the previous quarter.

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(c) 2004, The Sacramento Bee, Calif. Distributed by Knight Ridder/Tribune Business News.

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