Nokia, Microsoft, and the Suckerpunch to Intel

Back in May 2010, I covered Intel's Moorestown launch for Tom's Hardware. At the time, Intel was dead serious about taking on the ultramobile handset and tablet field with its new Atom platform. At last, Intel was on par with its ultramobile CPU archenemies, ARM and Qualcomm, and it had the multimedia horsepower to blow its rivals out of the water. Moreover, as good as Moorestown looked on paper (and performed in the lab, as I witnessed first-hand) the follow-up platform, Medfield, would be far better.

So here we are in early 2011. Moorestown phones were supposed to arrive in force in the second half of 2010 -- and didn't. Intel and Nokia joined hands to work on MeeGo, a Linux-based successor to Intel's Moblin project and Nokia's Maemo. MeeGo represented a new shot for the cell phone heavyweight to shore up its flagging market share. Intel even launched a MeeGo app store.

Here in February, we've had two critical bits of news. The one you probably heard about on February 11th was the new partnership between Nokia and Microsoft, wherein "Nokia would adopt Windows Phone as its principal smartphone strategy." This is a huge win for Microsoft, which hasn't been able to get the rush of buying interest for its new phone OS that it justly deserves. It's probably also a good thing for Nokia, which was obviously going nowhere fast with Symbian.

The second piece of news you may not have heard is that Nokia is essentially signing off on its MeeGo efforts. As per Nokia's February 11th press release, "MeeGo [now] becomes an open-source, mobile operating system project." That means that the budget for MeeGo will be whacked, and either Intel will have to pick up the entire tab (which would be stupid without a major phone partner) or the Linux community can poke at it for practice and giggles. Nokia promises that one MeeGo phone will arrive, but what sane developer would possibly commit resources to only one phone? Anyone who thinks the Nokia N901 will be the next iPhone is delusional.

So the doubled-over loser in this arrangement is Intel. Nokia wants/needs Windows Phone, and Qualcomm has a virtual lock on today's Windows Phone devices. Worse yet, when I was at that Moorestown meeting, Intel engineers clearly were not excited about the Windows Phone platform, ostensibly for performance reasons.

All of this adds up to very grim and likely unexpected tidings for Intel, which desperately needs at least a beachhead in the ultramobile market. Intel indicated last year in no uncertain terms that a large part of personal computing's future lies in handheld devices. If that's true -- and all signs indicate that this is the trend now afoot -- then the Nokia/Microsoft affair poses a significant challenge for Intel. If Medfield can't get the company into significant numbers of handsets and start reversing the ARM and Qualcomm tide, what possibly could?