Intel drops bombshell on mobile phone processor market. (Top Technology Showcase).

Chip giant Intel Corp. has lobbed a potential hand grenade into the mobile phone industry with a new, inexpensive integrated chip for handsets.

The Intel PXA800F cellular processor offers cell phone makers a new system-on-a-chip option, an integrated piece of silicon that combines a CPU, application processor, and flash memory, potentially offering big cost savings for manufacturers and consumers.

The processor operates at speeds up to 312MHz, and includes 4MB of integrated Flash memory and 512KB of SRAM for applications. The PXA800F also includes a 104MHz signal processor with 512KB of integrated Flash and 64KB of SRAM. It is based on Intel's .13 micron process technology.

Perhaps most significantly, though, the tiny chip will be priced at just $35 in 10,000 unit quantities. Phones with the chips will therefore be available for prices well below $300, according to analysts. Early phones using the chip may appear later this year, with volume production in 2004. Intel has not announced major phone QEMs who will adopt the chip, but its success will depend on at least one of the large phone vendors supporting it (Motorola Nokia, Siemens, Samsung, and Sony Ericsson are the largest, based on sales volume).

"As the industry transitions from voice-only phones to advanced devices that combine voice and data, the ability to effectively and efficiently combine advanced processing, memory and communications technologies will be required to drive the next generation of cell phones," said Hans Geyer, Intel vice president and general manager of its PCA Components Group.

Intel has indicated that it expects the chips will enable a new class of low-priced phones with a slew of (until-now) costly applications, including digital cameras, MP3 players, color displays, games, and video. The chip even supports an optional global positioning interface. The integrated solution, Intel officials say, will not only make such features cheaper, but will also result in longer battery life and smaller, lighter handsets.

While the initial incarnation of the chip supports only GSM/GPRS phones (used primarily by AT&T and Cingular Wireless), Intel is expected to release CDMA versions for carriers that use these networks, including Sprint and Verizon.

www.intel.com