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Intel inside mobile internet devices?

Tim Bajarin

In 2001 I was commissioned to write what became the first industry report on what are now being called mobile internet devices, or MIDs for short.

The report was commissioned by Transmeta, the pioneer in creating low-voltage X86 processors. The focus was their use in handheld computers using Microsoft Windows.

At the time I wrote the report, these devices were called ultra-mobile PCs, or UMPCs, and Transmeta and partners like OQO blazed some important trails in this area by creating the first fully functional Windows OS-based handheld computers.

However, when I looked at the market potential for UMPCs and tried to forecast its long-term growth, I came to the conclusion that most of these devices would largely find interest in vertical markets and, consequently, they would not really sell in big numbers.

The problem at the time was cost. The first OQO UMPC was nearly $2,500. At that price there was only interest from vertical markets such as transportation, medical, public safety and so on.

While this was interesting for Transmeta, what it really wanted to know is what it would take to get millions of processors sold on devices like this. My conclusion was that it needed to get into consumer products and have prices well under $1,000 to take off. I added that if it ever got under $500, it might even become a hot consumer product.

By 2005, Intel had come to similar conclusions. While it had its low-voltage Atom processors in the labs, it started pushing early versions of what it called ultra-low voltage processors (ULVP) into MIDs and helped Samsung and some of its Taiwanese customers create what was then the first generation of MIDs.

But again the problem was cost. Most were in the $1,000+ range. But over the last three years, as component prices have come down and ULVP speeds increased, MIDs started hitting the market at more consumer-friendly prices well under $600.

But there is a lot of discussion in Silicon Valley these days - as well as throughout the industry - about the real viability of MIDs. Since Intel started pushing MIDs, smartphones, and especially Apple's iPhone, have pushed into MID territory and in many ways provide the same types of functionality as well as adding the telephony feature.

Intel is still pushing the MIDs pretty hard. At its recent developers conference, Intel again made a big push on MIDs and is lobbying the big PC vendors as well as ODMs to get behind MIDs.

The big vendors are still on the sidelines when it comes to MIDs. They too feel that it is crossing into smartphone territory and this is where they see the real growth.

While they acknowledge that a handheld portable device with Windows XP has merit, they still question who the real target audience is and how much consumers will be willing to carry a second device like an MID in light of their smartphone.

Although we expect Intel to continue to beat the drum about MIDs, I also expect the debate about the short- and long-term potential of this product to rage on. It is still unclear whether consumers will ever embrace MIDs and make it the multi-million unit product category that Transmeta dreamt about and Intel needs to grow its mobile business.

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