Intel and LG create 'mobile Internet devices'

By Marguerite Reardon on 16 February 2009, 11:00am

Intel announced today at the Mobile World Congress that LG will use its latest generation technology to build a new class of device called 'mobile Internet devices', or MIDs. Yeah, that'll catch on.

Specifically, Intel and LG will work together to build these devices using a processor that Intel has code-named Moorestown. The devices will also use a version of the Linux open-source operating system called Moblin. The LG device is expected to be one of the first Moorestown designs to hit the market. And Intel has said that devices using the new Moorestown chips will hit the market by 2010.

Intel and LG have already been working closely together on other products. In the fourth quarter last year, LG launched a netbook using Intel's Atom processor. And LG also ships fully fledged laptops using Intel's Core processor.

Now, the companies are working on a new class of product that are mini-computers that can also be used to make phone calls using an Internet connection. Intel sees the category of product as somewhere between a smart phone and a netbook.

As the global economy continues to deteriorate, Intel, like many other large companies, is looking for growth markets. The company's bread-and-butter PC processor business is suffering as people stop buying desktop computers.

Intel sees mobile devices, and specifically the high-end market, as an important area for growth. While the overall phone market was down about 12.6 per cent worldwide in the fourth quarter, according to IDC, smart phones were actually up about 22.5 per cent.

To date, Intel hasn't really played in this growing market. Instead, other players, such as ARM, Qualcomm and Texas Instruments, have divvied up considerable market share in the phone market.

But Intel wants a piece of the pie. So the company has been pushing this new category of device. Intel argues that consumers need a device that's more powerful than a smart phone but not as bulky as a netbook. The idea is that consumers who buy a MID could use it to watch high-definition video, make phone calls using the Internet, or download information from the Web while on the go.

Not surprisingly, Intel's vision of a MID is exactly why many people want to buy a smart phone such as the iPhone. And this is essentially the conundrum that Intel faces. It has to convince consumers that they need to spend a few hundred pounds or more on an additional device.

But since this mobile device will also require mobile Internet access, Intel is also tacitly asking consumers to sign up for yet another mobile contract. Of course, these devices will have Wi-Fi, but Wi-Fi isn't everywhere.

So far, mobile networks have done a poor job of providing people with a single subscription for multiple devices. Some carriers allow certain smart phones to be used as modems for laptops that essentially share the same data service. But some devices, including the iPhone, can't be used in this way, which means consumers who want 3G Internet access on their laptop and on their phone have to subscribe to separate services.