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Worst nightmare looms for phone builders, as Intel links with Microsoft?

The phone is a "reference design" only, said Ron Smith, head of Intel's wireless comms and computing group. He went to considerable trouble to emphasise that his company's chip set is available to any software builder, including Palm, Symbian or even open software - but the fact remains that many people here immediately reacted with great suspicion to the fact that the first working smartphone was a Microsoft "Stinger" design built by a Taiwanese company, Wiston - famous as the builder of Dell's equipment.

The rational response is to go to Intel's big booth down by the seaside, and see the vast showcase of hand-held and phone based systems with Intel variants of the ARM processor inside, and the large variety of software platforms running on them, and recognise that there is probably no way on earth that Intel would want to tie itself to an unproven platform like Windows Powered SmartPhone.

But that wasn't the response of most people here, who simply said they didn't believe it.

"Intel wants to turn the market into a high-volume commodity market," was the response from a source at PalmSource - a rival for the phone market. "We've seen the Dell version of the PocketPC - almost half the price of any rival - and based on Wiston hardware. Obviously, people are going to draw the conclusion that Intel and Microsoft, together, are going to commoditise phones in the same way.

Smith demonstrated a working version of the Wiston design side by side with the HTC-built SPV phone from Orange.

Thomas Yemington, product marketing manager, showed the same video clip playing back on both phones; the TI-based SPV clearly failing to render most of the frames, while the new PXA262 chip from Intel, combining X-Scale and DSP technologies, managed to produce a convincing video illusion. "It also makes multi-tasking possible," said Yemington.

Examples of multi-tasking requirements on a phone would be a kid, playing a game and listening to an MP3, he said; or just switching from a web-based application to a database lookup of a phone number. Demonstrating, he made the Wiston machine look impressively superior.

The Intel reference design is almost half the thickness of the SPV, too, and slightly lighter, but Intel believes there is no power penalty.

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