Intel makes mobile move with Orange

Chip firm Intel heralded its debut in the mobile devices market early Monday, with the unveiling of the first commercial handset powered by its Atom chipset. Network operator Orange has co-designed the device, which it calls a ‘proper’ smartphone experience, but targeted at the mass market.

The handset, codenamed the ‘Santa Clara’, will be available in the summer, and features branding by both Orange and Intel. The unit is built by Taiwanese manufacturer, Gigabyte Technology. The device packs some high-profile hardware including 1.6GHz CPU, high resolution 4” display, 16GB of storage, HD voice, HDMI, NFC, but it will not be targeted at the premium end of the market. This may lead one to think that the margin Intel will make from this phone will be extremely small, if it even makes any profit from it, according to Malik Saadi, principal analyst at Informa Telecoms & Media.

“It is clear that Intel wants to send a message to the industry that its Atom chips can power high-performance, low-power consumption, thin-architecture phones all at very competitive price compared to alternatives CPUs based on ARM architecture.

“However, several questions come to mind when assessing market opportunities for the phone: Why the phone was not developed in collaboration with an established OEM? Why the phone is not targeted at the premium end of the market even though its BOM is too high? Why the phone is branded “Intel inside” and what does this mean to consumers? What marketing resources the company is putting in place in order to promote this brand? Why the phone is not powered by the most recent version of Android OS? What are the incentives for developers to port their existing applications compiled for ARM to Intel’s x86 platform?

“All in all, it is surprising for an innovative giant like Intel to position its first mobile device as a main-stream one with almost no differentiation from competing phones. This move is likely to dilute its brand as one of the key innovators in the industry. “