PDAs Intel-Texas Instruments Battle Heats Up
Arik Hesseldahl, Forbes.com, 02.19.02, 5:00 AM ET
NEW YORK - As the battle to supply chips to handheld computer and mobile phone manufacturers intensifies, Texas Instruments (TI) and Intel are expected to make significant announcements today concerning a line of new devices that combine mobile phones with handheld PDAs.
At a wireless-industry conference held in Cannes, France, the 3GSM World Conference, TI (nyse: TXN - news - people) was expected to demonstrate a new version of Hewlett-Packard's (nyse: HWP - news - people) Jornada line of devices using a TI chip. Most recent PocketPC devices have used Intel-made chips.
HP's Next Jornada: Contains chips from Texas Instruments
The Jornada 928 combines a PDA based on Microsoft's (nasdaq: MSFT - news - people) PocketPC operating system with a mobile phone capable of handling e-mail and Web access using a technology called General Packet Radio Service. GPRS is a new wireless technology that allows an always-on Internet connection for e-mail and Web access while also allowing voice phone calls. The device will ship first to markets in Europe, where wireless carriers are moving faster to adopt GPRS than in the U.S.
The deal comes as Intel (nasdaq: INTC - news - people) recently took aim at TI's wireless chip business with the release last week of its XScale line of chips for use in both mobile phones and PDA devices.
Additionally, TI and Intel were both expected to announce separately that they have crafted collaboration agreements with Microsoft to develop and sell reference designs for SmartPhones. Once known under the code name Stinger, Microsoft's SmartPhone 2002 platform combines the PocketPC operating system with the look and feel of a mobile phone. Microsoft Chairman Bill Gates unveiled the company's plans for the platform at the International Consumer Electronics Show in Las Vegas last month.
Both joint plans, launched in parallel, call for Microsoft to develop, in collaboration with the chipmakers, everything a manufacturer would need to build a SmartPhone device, from the chips and other electronic components to the software, except the outside plastic shell and physical design elements. The intention is to make it easy for manufacturers to create SmartPhones easily.
"The idea is to have a licensee go from design to production of a device in only a few months," says Richard Kersleke, TI's marketing manager for wireless products.
The plans are similar in concept to one launched by Motorola's (nyse: MOT - news - people) semiconductors division last year. The company said it would offer everything a phone manufacturer would need to build a phone except the plastic shell. The key difference with TI's and Intel's respective plans is that both call for producing phones that run Microsoft's operating system software.
While both TI and Intel stand to benefit from their respective deals, the big winner is Microsoft, which is pushing ahead aggressively to promote its handheld platform in a campaign to overtake Palm (nasdaq: PALM - news - people). Palm is busily readying a massive upgrade of both the software and hardware for its Palm handheld devices, as well as those made by Handspring (nasdaq: HAND - news - people), Sony (nyse: SNE - news - people) and others.
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