Nokia plays catchup with Intel deal

25 June 2009

The Intel/Nokia deal that will see the two companies work on Linux-based software for mobiles is both good and bad news for Microsoft. But it's a real problem for Nokia's own Symbian group. When you consider that the Symbian OS started life as a mobile internet device (MID) operating system and mutated into smartphone software and took more than ten years to get where it is today, this is not the outcome that Nokia could have wanted when it decided to back Symbian. And it leaves Nokia looking a bit flat-footed against much smaller but apparently much more nimble competitors. The only good news for Symbian is that at least it's not Limo.

Nokia outsells the more fashionable brands, such as Apple, by a long way. This is something that the Symbian people were keen to hammer home when they decided to go open source last year. But reviews of the latest high-end Nokia phones are not good, with a number pointing to the overall clunkiness of the Symbian interface when compared with more recent software that was put together in a fraction of the time needed to get Symbian OS into its current state.

So, Nokia is left trying to work with Intel on knocking Moblin into shape so that they can take on the iPhone and the various Android-based devices going through design. In a back-handed way, this is good news for Microsoft when you look at the potential for bigger MIDs and small netbooks. Balkanisation of the Linux landscape only plays into Microsoft's hands. Intel will have its very own virtualisation software courtesy of Wind River, although the future embedded software subsidiary is mainly pitching that at telecom infrastructure equipment. It's a small leap of imagination to go from a design that runs Moblin (or indeed Android) to one that bungs on Windows 7 as well for those moments when only MS Office will do.

There is precious little detail in what Intel and Nokia have said so far but Nokia is just the kind of customer that Intel would want to have Atom-based devices made at TSMC. For Nokia, it makes the decision to go with ARM or Atom little more than a matter of deciding which core to slap down on the system-on-chip (SoC). The open question is how much Nokia will want to outsource design to Intel, given that it has been slimming down its own chip-design operations, versus the amount of control the DIY approach will give the Finnish company.

At the same time, Intel gets a lot of useful intellectual property (IP) that it can slap into an Atom- or Centrino-style chipset that finally might make a netbook a netbook rather than just a very cheap laptop. You have to hope Nokia got a very keen deal on pricing for its use of Atom given that this is a deal that gives Intel much better access to a market it currently craves and one in which, if the number-one chipmaker succeeds, will be able to play the monopoly game. Being able to pit Qualcomm and the other ARM processor suppliers against each has made ARM a much more attractive proposition to handset makers than anything Intel can come up with. But if, through a deal with a top supplier, Intel can get a foot in the door, the balance of power may shift.

But, it worth remembering that Nokia's previous attempts at the MID business, and deals with Intel, have hardly been stellar successes.