Intel boss imagines PCs as common as cell phones

Intel Corp. is betting on a big expansion of "ultramobile" computing, an idea that depends on people being willing to tote around a portable device beyond their ubiquitous cell phones.

In an interview Monday at the International Consumer Electronics Show, Intel CEO Paul Otellini said energy-efficient, Web-connected computers with full keyboards and screens in the 4-inch neighborhood can give people more of what they want from the Internet than cell phones can.

To help stimulate development of the technology, Intel plans to begin shipping processors and associated chip sets in the next few months that demand relatively little power and are smaller than standard PC processors, allowing them to be crammed into tinier devices, which would be built by other companies.

Ultramobile computers, smaller than average laptops but bigger and more fully featured than most cell phones, have so far found a tepid response.

Many potential buyers have found little reason either to scale down from notebook computers or up from cell phones that have been improving their Web browsing experience, especially when the price often tops $1,000.

"How do you make people realize that this is something advantageous to them and different from the notebook experience?" said Richard Shim, an analyst with market research firm IDC. "That's the trick. Nobody's been very good at that yet. ... It's not as widely compelling as it needs to be if they want it to compete on the level of a phone or a PC."

But Otellini said such distinctions will cease to matter, especially since smaller Web devices can incorporate cell phone functions. And he said Apple's iPhone showed that combination devices can be elegant.

"You're projecting an end stage on an early technology," he said. "That's a risky thing to do."

Even with cell phones in nearly every pocket or purse, another gadget could be appealing if it does something particularly compelling. For example, more and more cell phones play music, but plenty of people are willing to carry MP3 players along with their cell phones because the players do their job better.

Otellini was expected to show ultramobile PCs -- he prefers the name "mobile Internet devices" to better distinguish them from laptops -- offering a new kind of information-on-the-go bliss during his keynote speech at CES on Monday.

He planned to demonstrate how an American traveler to Beijing might use a pocket computer to get real-time navigation tips and instant translations of signs, menus and conversation from Chinese.

Otellini acknowledged that this vision for ultramobile computing is a few years away from happening.

Little PCs need longer battery lives so people can tote them around and use them all day. Wireless broadband networks -- like those based on WiMax, of which Intel is a major backer -- still have to be broadened tremendously to make access uniform, though cellular networks offer another option.

Proof that wireless carriers will be crucial is in the weak reception for Sony Corp.'s Mylo handheld messaging device. With a full keyboard and selling for around $300, it can go online only in Wi-Fi hot spots, which have limited range.

This is far from the first time Intel has ranged beyond its specialty in PC and server chips in an attempt to diversify -- and take the edge off the up-and-down cycles common in the chip business. Past forays that hit dead ends include chips for music players, TVs and cell phones. Intel once even tried selling toy microscopes.

These days, some analysts fear Intel's inventory for PC chips is backing up because of slowing orders from the industry. Intel's shares fell 15 percent last week, vaporizing about $24 billion in shareholder wealth.

Intel also is eyeing home entertainment devices. Otellini planned to unveil a computing-and-graphics-microprocessor combo that can run TVs and set-top boxes.