Wireless

Dell is developing a pocket-size Internet device using Google's Android operating system that could take on Apple's iPod Touch, according to a report from the Wall Street Journal on Monday.

Two people who have seen early prototypes of the device told the newspaper it looks like Apple's iPod Touch but slightly larger. And like the iPod Touch, the device isn't expected to include a cellular phone. The device is considered part of a new category of gadgets called mobile Internet devices, or MIDs, which are designed to fit into the market between a mobile phone and a laptop or Netbook computer.

The device could go on sale as early as the second half of 2009, according to the Wall Street Journal's sources.

Dell supposedly started working on the new device about a year ago as a way to compete against Apple's iPod business. The Journal also cited an unnamed source who said that Dell has considered selling the new Internet device through a cell phone carrier. Dell and other computer makers such as Hewlett-Packard already sell their Netbooks through cell phone operators.

Dell has long been rumored to be making a smartphone. And the company has also been rumored to be testing the Android software for its smartphone and possible for its Netbooks. With these developments in the works, it probably wouldn't take much to also develop a portable Internet device using the same operating system without the phone. That's what Apple did with the iPod Touch.

Intel and Nokia have more than a few holes in their respective collections of mobile technologies. How far will the collaboration announced Tuesday go to plug the holes and take them to the next technology plane?

Intel senior vice president Anand Chandrasekher

(Credit: Intel)

A platitude easily missed in the announcement may be the most revealing statement. Simply, that the two companies create the opportunity to take advantage of each other's expertise.

Nokia makes mobile phones. Intel, the world's largest chipmaker, can't get its chips into mobile phones. On the other hand, Intel makes the silicon that powers the world's PCs. Nokia doesn't have a clue about PCs.

The announcement won't necessarily inspire confidence with its lack of product particulars, but that's not what it's about. "Today is a relationship announcement," said Jeff Orr, senior analyst for mobile devices at ABI Research.

Intel and Nokia are simply agreeing at this stage to collaborate rather than be direct competitors, according to Orr.

Nokia was clear--in a cryptic sort of way--on one point, however: "Today's collaboration is not about smartphones but creating a new class of devices," Kai Oistamo, executive vice president for devices at Nokia, said in a phone interview Tuesday.

Beyond those future devices--presumably powered by Intel silicon--what does Intel get? Initially, the most concrete thing is 3G. "This is a gap for Intel, which has focused on Bluetooth, Wi-Fi, and WiMax," Orr said. "As a result, when future architectures like an Atom platform are developed for MIDs (mobile Internet devices), Netbooks, smartphones, that means vendors will have more flexibility for connectivity."

In short, Intel can build 3G into its chipsets and Intel can compete more effectively in the future with products like the iPhone and Palm Pre that include 3G as standard. Intel-based notebooks and Netbooks, until recently, were rarely offered with 3G as a standard option.

"We're not talking about specific products today but certainly we would not have taken a license (from Nokia) if we didn't have the intention to build a product," Anand Chandrasekher, Intel senior vice president and general manager at the Ultra Mobility Group, said in a phone interview Tuesday, referring to Intel's licensing of Nokia's HSPA/3G modem technology.

And it may be too soon for 4G technologies like WiMax. There are many countries (ABI Research's Orr counts about 100) where 3G is just emerging, so talking about WiMax (a 4G technology) is "very premature for most countries," he said.

BARCELONA--Intel announced here Monday at the GSMA Mobile World Congress that LG Electronics will use its latest generation technology to build a new class of device called mobile Internet devices, or MIDs.

Specifically, Intel and LG will work together to build these new 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 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 full-fledged notebooks 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 a wireless Internet connection. Intel sees the category of product as something that is somewhere between a smartphone, like the Apple iPhone, and a Netbook, a scaled-down version of a notebook computer.

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 MID market, as an important area for growth. While the overall cell phone market was down about 12.6 percent worldwide in the fourth quarter, according to IDC, smartphones were actually up about 22.5 percent.

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 cell 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 smartphone but not as bulky as a Netbook or laptop. 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 smartphone like the iPhone. And this is essentially the conundrum that Intel faces. It has to convince consumers that they need to spend a few hundred dollars or more on an additional device.

But since this mobile device will also require wireless Internet access, Intel is also tacitly asking consumers to sign up for yet another wireless service plan. Of course, these devices will likely have Wi-Fi, but Wi-Fi isn't everywhere. And if someone wants a device with ubiquitous coverage, he'll have to pony-up an extra fee for a service plan.

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

Data service for laptops and Netbooks service generally costs about $60 a month. Meanwhile, carriers are also charging smartphone users an additional $30 a month on their bill for unlimited Internet access. All told, a single consumer could have to come up with about $90 a month just for mobile Internet access on two devices. Compare this with the $30 a month that DSL broadband subscribers pay, which allows them to connect multiple devices at much higher speeds to the Internet.

Most likely when these MIDs rollout, mobile operators will have a more affordable plan in place. Operators, such as AT&T and Sprint Nextel have already expressed interest in rethinking data plans to accommodate more devices that will access the Internet wirelessly. But one thing is certain. An expensive data plan could hurt MIDs before they even get out of the gate.