Intel Launches Atom: Too Late For Smartphone, Tablet Gold Rush?

Intel Corp. (NASDAQ:INTC) announced its new Atom “Clover Trail+” chips geared at winning momentum in the burgeoning market for smartphones and tablets as demand from computer customers eases. The chip giant said Lenovo Group (PINK:LNVGY), Asustek Computer (TPE:2357) and ZTE Corp. (SHE:00063) will integrate the chips into new smartphones.

The Santa Clara, Calif., company made the announcements at the annual Mobile World Congress in Barcelona, where rivals, including Qualcomm Inc., (NASDAQ:QCOM) are announcing new products and design wins. Some manufacturers, notably China’s Lenovo, had previously said it would design Qualcomm’s Snapdragon chip into new mobile platforms.

Qualcomm CEO Paul Jacobs gave a keynote address Sunday similar to one at last month’s International Consumer Electronics Show, where he predicted mobile networks will connect as many as 24 billion devices by 2020. The San Diego company announced new, high-speed 4G LTE chips for phones from Ericsson (NASDAQ:ERIC) later this year.

Qualcomm has had close development ties with ARM Holdings Inc. (NASDAQ:ARMH), the principal chip partner of Apple Inc. (NASDAQ:AAPL). ARM and Qualcomm processors are built into Apple’s iPhone and iPad family.

Intel CEO Paul Otellini, who plans to retire in May, acknowledged last year that the company was late to the smartphone race and has spent $18.2 billion, or 14 percent more on research and development than in 2011, to catch up.

“We will build on this foundation,” said Hermann Eul, Intel VP and co-general manager for the mobile and communications group. “In less than a year’s time, we have worked closely with our customers to bring Intel-based smartphones to market in more than 20 countries throughout the world.”

Later in 2013, Intel said it would introduce Atom chips for more powerful tablets dubbed “Bay Trail” with partners including Lenovo, Dell Inc. (NASDAQ:DELL) and Hewlett-Packard Co. (NYSE:HPQ). Those products are scheduled for fourth-quarter shipment, Intel said.

Among the new chips are a dual-core Atom Clover Trail unit for phones and Android tablets, including a multimode LTE chip scheduled to ship in the first half. The dual-core processors, just like those on laptops, run at speeds of 1.2 Ghz, 1.6 Ghz and 2.0 Ghz, come with Intel’s graphics media accelerator engine that supports up to 533 Mhz in boost mode to support 3D movies and video games.

The Atom chips can support two cameras, with a primary camera sensor up to 16 megapixels, real-time facial recognition and detection.

As well, they will be loaded with software for authentication for secure access to social networks and services like cloud banking, Intel said. Besides Intel’s own McAfee security, partners including both Visa Inc. (NYSE:V) and MasterCard Inc. (NYSE:MA), will provide authentication software.

Shares of Intel rose 8 cents to $20.50 in Monday trading, while those of Qualcomm gained $1.11 to $66.07.