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Intel Chips to Run Smartphones in Second Half of 2011

Dec. 8 (Bloomberg) -- Intel Corp. chips will make their way into smartphones from large manufacturers in the second half of next year, Chief Executive Officer Paul Otellini said.

The chips will be used in “premier” smartphone brands, Otellini said today at an investor conference in San Francisco. He declined to name any customers.

Intel, the world’s largest semiconductor maker, is trying to win orders from phone manufacturers to lessen its dependence on the personal-computer market. While the company has agreements with Nokia Oyj and LG Electronics Inc., there are no phones currently on sale that use Intel processors.

The market for chips that run the radios in mobile phones, called digital signal processors, is dominated by Qualcomm Inc. Intel is entering that field through its purchase of Infineon Technologies AG’s wireless unit. Intel is also scaling down its PC chips to create a product called Atom to gain a foothold in the growing business of supplying chips that run phone programs.

While Intel’s 10-year effort to capture orders in mobile phones has yet to help its earnings, Otellini said the company has more resources and technological capabilities than any of its rivals.

“We can bet big,” he said. “We can do it for the long term.”

Intel rose 24 cents, or 1.1 percent, to $21.82 at 4 p.m. New York time in Nasdaq Stock Market trading. The stock has gained 7 percent this year.

To contact the reporter on this story: Ian King at ianking@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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