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May 18, 2011

Intel Smartphone Postponed. Again.

Chip maker Intel is under scrutiny as to whether it will actually be making its foray into the smartphone market.

A few months ago, Intel’s CEO Paul Otellini (News - Alert) said that the company had plans to enter the arena sometime this year, and last June they were reportedly targeting the earlier parts of 2011. Of course, those dates have come and gone with nary a phone from Intel (News - Alert) and people are starting to wonder.

Financial analysts had lots of questions for Intel at the company’s investor meeting. Particularly, they wanted to know how the company could offer a distinct advantage over smartphone processors from rival chipmakers such as Texas Instruments (News - Alert), Nvidia, and Qualcomm, which make silicon based on the dominant ARM architecture.

Mike Feibus, principal analyst at TechKnowledge Strategies, said Intel’s delay is a bit of a concern. "It's a little disappointing...because I thought they would be further along than they are now," he said.

"Part of it may be that Intel has swung too far to the other side of the pendulum. In 2010, the company overpromised and took it on the chin. Now they may be a little overcautious as a result," he said.

Engadget reported that Otellini blamed the company's partnership with Nokia (News - Alert), which recently abandoned its MeeGo joint venture with Intel in favor of using Microsoft's Windows Phone platform instead. "In hindsight, Nokia was the wrong partner to have picked." However, Otellini said again that Intel is shopping its handset reference design around to other companies.

Otellini barely mentioned smartphones at the investor’s conference, according to CNET, although he said that Intel chips would appear in 35 tablets, including Android (News - Alert) and MeeGo tablets.

However, Otellini did say Intel Corp.'s forecast for this quarter remains "right on," as emerging economies and surging demand for data centers make up for a personal computer slowdown.

The popularity of smartphones and tablets is spurring the need for more servers, which run on Intel processors; Otellini also cited Brazil, China and other developing countries as fueling sales.

Michelle Amodio is a TMCnet contributor. She has helped promote companies and groups in all industries, from technology to banking to professional roller derby. She holds a bachelor's degree in Writing from Endicott College and currently works in marketing, journalism, and public relations as a freelancer.

Edited by Rich Steeves

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