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Intel on $100 laptops, smartphones and the Net

Intel is loaded with ideas for portable computers. Marketing boss Sean Maloney even slings a few compliments at OLPC's Nick Negroponte in an interview with Fortune's David Kirkpatrick.

By David Kirkpatrick, Fortune senior editor

NEW YORK (Fortune) -- I alienated more than one executive at Intel with my recent column about the $100 laptop for poor school kids being built by Nick Negroponte's One Laptop Per Child (OLPC) initiative. But Intel's head of sales and marketing, Sean Maloney, overlooked his reservations and spent an hour with me last week during the company's analyst meeting in New York.

I was duly impressed, both by his tolerance of my criticism and by what he had to say. Later, I listened to Anand Chandrasekher, general manager of the company's "Ultra Mobility" group, give an amazing talk about where the company is taking mobile devices.

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Maloney threw a few olive branches to Negroponte, even though he takes umbrage at the OLPC boss's accusation that Intel is undermining its million-unit deals with countries in the developing world. "It's just not true that we're sabotaging him," Maloney said. "We've been in these countries for many years.... Good luck to him but there's a role for both of us."

But Maloney says that while Negroponte's goal of hundreds of millions of cheap laptops to poor children in the developing world may sound grandiose, "those numbers are not far from achievable." He continued: "He has a clear vision and there's a role for that for sure. I've spoken to him two or three times, and hopefully we'll figure out a way of working together."

That will be music to the ears of the OLPC people, I suspect. But no near-term rapprochement will undo the fundamental philosophical chasm that divides Intel and OLPC. The computer giant is far more optimistic about the role of teachers and classrooms than is Negroponte, who focuses his thinking on how to directly stimulate the creativity of kids.

Maloney says "there will be a blizzard of low-cost notebooks in the next two years," with or without OLPC. But Intel (Charts, Fortune 500) is thinking beyond cheap mobile PCs. It is putting enormous energies into the so-called Ultra-Mobile PC, not just for kids in the Third World but for business and personal users worldwide, as well as what it calls the "Mobile Internet Device."

The Internet in your hand

Intel's new philosophy is that mobile computing should be real computing. "If you're going to go to the trouble of carrying around something with you, it better be the whole deal of the Internet," Maloney explains.

Which brings me to Chandrasekher's talk. The ultra-mobility chief pointed out that many of the most important Internet functions and sites remain impossible to use on today's small mobile devices. He showed the error messages users get trying to play a YouTube video on one popular smart phone. He also said MySpace and Second Life, for example, are hard or impossible to use on the run. (PDFs of his slides, along with those of all the other speakers at the analyst meeting, are here.)

Until a year ago Intel had its own special chips for cell phones, but it sold off that group. It has now concluded that its flagship Intel Architecture (IA) chips must be made to work in the tiny devices we carry everywhere. "This is a dramatically different thrust than we've had in the past," Chandrasekher said.

He pointed out, for example, that new versions of critical applications like Flash typically don't show up on portable platforms until on average two years after they're available for PCs. But if mobile devices use IA, that problem goes away. The chips Intel is designing are intended to run Windows XP, though Chandrasekher said he is frustrated that Microsoft (Charts, Fortune 500) has not yet delivered a small-scale version of the operating system. He also said that many of these devices will run on Linux.

Chandrasekher showed off a tiny new chip called Silverthorne that it is already producing in small numbers, and which should be on the market this time next year. Like Intel's smash hit Centrino for laptops, this chip was purpose-built for the task at hand. It is a real 64-bit x86 chip about the size of the hair and beard on a Lincoln penny. While at first Silverthorne will sit in a circuit board about twice the size of a playing card, within a couple years, Intel will integrate the entire PC's guts onto a single chip.

These processors will be built in Intel's state-of-the-art factories with circuits a mere 45 nanometers wide. Silverthorne will use about one-tenth the battery power of Centrino, Chandrasekher says, and power requirements will diminish further as they evolve.

By 2010, Intel projects that at least 10 percent of the total PC market globally will be comprised of ultra-mobile devices. Chandrasekher showed off a bunch of tiny computers that will use the new chips. Many of us here and in developing countries are likely to be carrying one around soon. Top of page

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.