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August 23, 2005

Intel & RIM story resurfaces with more substance

As we reported yesterday, the story of a putative deal between Intel Corp and Research In Motion Ltd has resurfaced, this time with a little more meat on the bones.

By CBR Staff Writer

Last time around it was Canada’s Nationial Post that floated the rumor, suggesting that Brampton, Canada-based RIM was looking for a chipset for future handsets.

It went so far as to punt the Centrino as the candidate, though that would mean RIM would be going into the laptop business. The chip giant from Santa Clara, California does have an offering for mobile phones, the Xscale, but it has received only lukewarm acceptance among handset manufacturers.

Now, however, another Canadian daily, The Globe and Mail, sees the technology flow going in the other direction, with the two companies close to cutting a deal whereby some of RIM’s wireless expertise could find its way into Intel’s next-gen chip to follow on from the Centrino with a tidy royalty payment estimated by the paper to be about $500m a year going to RIM as a result.

Such a deal would represent a huge fillip to RIM, which not only spent $450m earlier this year to put an end to its patent dispute with NTP, but has now seen the issue raise its head again, casting doubt over its commercial future in the US market. It would also bolster the company in its development efforts to withstand challenges from software and hardware vendors alike.

For Intel, it could help solve some of the problems it has been facing with the development of Yonah, its dual-core mobile processor earmarked for 2006. Yonah has been generating too much heat, a problem with which Intel is familiar, but one which will require new approaches if it is to be solved for the mobile handset world.

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