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The deal teams Intel up with a chipmaker
specializing in low-end mobile devices that often cost less than
$100 and are popular in China and other fast-growing markets.
This represents a major move for the Santa Clara, California
company that has struggled to gain traction in smartphones and
tablets.
Intel gains access to Rockchip's ability to quickly launch
inexpensive mobile chips as well as access to the company's
strong relationships with local Chinese manufacturers focused on
the country's fast-growing consumer market.
"They’re absolutely bringing us speed and execution and
proliferation for us that would not otherwise get done," Intel
CEO Brian Krzanich said on a conference call. "They also bring
these relationships and partnerships that go well beyond what
ours are."
With sales of high-end mobile devices losing steam in North
America, manufacturers have been turning their attention to
lower-end tablets and smartphones designed for consumers in
China.
Under the agreement, Rockchip and Intel will make a quad-core
mobile chip using Intel's architecture and branding, Intel said.
While Intel excels at developing processors for laptops and
desktop computers, it has less experience designing "system on
chips," or SoCs, that combine features like modems, wifi and
memory.
Fuzhou, China-based Rockchip and other mobile chipmakers focus
on making SoCs for smartphones and tablets. Those chips
typically include ARM processor technology that competes against
Intel's technology.
Krzanich said the agreement with Rockchip does not include an
investment between the two companies.
Intel said the chip will include 3G connectivity and be
available in the first half of 2015.
Shares of Intel were up 1.22 percent at $26.60, in line with
trading levels ahead of the announcement.
(Reporting by Noel Randewich; Editing by Richard Chang and
Cynthia Osterman)
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