Intel Follows the Crowd With Integrated Chips

ep80579_integratedToday Intel (s INTC) detailed its plans to stop focusing on horsepower and think about the whole car. The chipmaker has decided to stop pushing Gigahertz (basically, how fast your computer can think), and start integrating radios in one package, or on a single chip — a form factor known as a System on a Chip (SoC).

The goal is twofold. First, it gets Intel into the growing mobile market, where every chipmaker is trying to gain design wins, and second it’s a concession that consumers — once trained to focus on speeds — are now content with the processing power in their machines. Today, consumers want connectivity and graphics, so Intel has to give it to them. But Intel is late to the SoC party, and it’s essentially trying to switch from making Ferraris to making a more well-rounded vehicle like the Honda Pilot.

However, Intel is going to try. It unveiled plans for a line of SoCs, which areĀ  based on the low-power Atom processor, aimed at set-top boxes and other devices requiring embedded chips last summer. Also last year it said it would integrate HSPA radios onto its Moorestown chipset for use in ultraportable computers. Some read this as a snub for WiMAX, but it’s really a blow aimed at Qualcomm (s QCOM) and Freescale which already build integrated chip packages that combine a cell phone’s brains with the radio.

I doubt this means we’ll see Intel in cell phones, or even mobile Internet devices, anytime soon though, despite Intel’s hopes to ride the PC form factor down from notebooks to netbooks to mobile Internet devices. The chipmaker has tried that once before with its failed XScale product line, which was sold in 2006 to Marvell (s MRVL). Handset makers simply don’t want to rely on Intel for their silicon after watching the PC industry struggle with Intel pricing for decades.

Plus, Intel’s x86 chips still suck more power than those typically used in devices that need a battery life measured in days and always-on functionality. This means that instead of its pseudo-rivalry with AMD (s amd), Intel is taking on ARM (s armh), the company whose intellectual property is the basis for most of the applications processors in high-end handsets.

Along with this rivalry and new focus, Intel will go up against more competition than it may have ever faced before, from the likes of Texas Instruments (s TXN), whose OMAP processor will be in the Palm Pre, and Samsung, which builds the brains for the iPhone and is also building its own radios (and could offer equally integrated chips).