Intel has announced a new chip for mobile devices.

On Thursday, Intel announced a new chip that combines CPU, memory and radio signal processing technology all in one. The US chip giant claims that the ‘wireless-Internet-on-a-chip’ will be a major boon for mobile Internet services, allowing lighter, more powerful handsets with longer battery lives. Test chips are scheduled to be available in 2002, with a likely 2003 commercial release date.

It can’t be bad news. The major problem with mobile handsets at the moment is the tradeoff between battery life and processing power – not helped by the fact that battery technology is developing much slower than computing technology. A single chip solution will save energy compared with a three-chip solution, since there will be no need for ‘buffering’ between the different areas.

To that extent, would-be 3G operators, and particularly handset firms, will be pleased by Intel’s announcement. Even if they do manage to develop the ‘killer apps’ to make their services irresistible to consumers – currently the major challenge facing the industry – the chances of offering a successful service would be limited if the all-singing, all-dancing handsets ran out of power within a few hours.

It’s easy to overestimate the importance of the announcement in technology terms, though. After all, Intel announced the concept of the chip last fall, and gave further details out in March. Even though the project received less fanfare then, mobile operators and handset makers will have been well aware of Intel’s plans.

That doesn’t mean the news is unimportant. Intel announced the project as the centerpiece of its European Developer Forum event – emphasizing the company’s commitment to the mobile Internet. It also announced its alliance with BT to develop wireless Internet services and applications. Coming at a bad time for the wireless sector, as launch delays and general skepticism hit share prices and revenue expectations, such a vote of confidence by one of the most important firms in IT is certainly a welcome shot in the arm.