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Intel Says Nokia Went to ‘Highest Bidder,’ Microsoft

Feb. 17 (Bloomberg) -- Intel Corp. Chief Executive Officer Paul Otellini said Nokia Oyj went to the “highest bidder” when it chose to use Microsoft Corp.’s operating system on future phones instead of software Nokia is developing with Intel.

“Between Microsoft and Google he was getting incredible offers, money to switch,” Otellini said on a conference call with investors, referring to Nokia CEO Stephen Elop. “Microsoft bid more.”

Nokia, the world’s largest handset maker, said on Feb. 11 that it will use Microsoft’s Windows Phone software as its primary mobile-phone platform, replacing its own Symbian software. Intel and Nokia had jointly developed an alternative operating system called MeeGo, an attempt by both companies to break into the market for smartphones, which is dominated by Google Inc.’s Android and Apple Inc.’s iPhone.

“I wouldn’t have made the decision he made,” Otellini said. “I would have probably gone to Android. Doing MeeGo would have been the best strategy for him, but he concluded he couldn’t afford it.”

Laurie Armstrong, a U.S.-based spokeswoman for Nokia, didn’t immediately return an e-mail and phone calls seeking a comment. Microsoft spokeswoman Melissa Havel declined to comment on Otellini’s statement.

Seeking Other Partners

Intel, the world’s largest chipmaker, is trying to grab a foothold in the rapidly growing market for smartphones and tablet computers. Its scaled-down personal-computer processors have failed to win a spot in any phone that’s currently on sale. The majority of smartphones and tablets run on chips made by companies such as Qualcomm Inc. and Texas Instruments Inc., using technology from ARM Holdings Plc.

Intel is developing MeeGo to try to expand in the industry. Otellini said that mobile-phone service providers support his effort because they don’t want the market to be dominated by Apple and Google.

“The carriers still want a third ecosystem,” he said. “We’ll find other partners.”

Nokia’s Elop said last week that a MeeGo-based device will be shipped this year as a way to “learn” about users’ experiences, and then developers will be put on other projects.

Intel rose 22 cents, or 1 percent, to $21.97 at 4 p.m. New York time in Nasdaq Stock Market trading. The stock has gained 4.5 percent this year.

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

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

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