Intel Corp, the world's largest maker of semiconductors, will work with Nokia Oyj, the No. 1 maker of cellphones, to develop products that deliver high-speed wireless Internet access over long distances.
Intel will help Nokia produce handsets that operate using so-called WiMAX, Sean Maloney, executive vice president of Intel's mobility division, said in an interview. He declined to say whether Nokia will use Intel's chips.
The partnership with Espoo, Finland-based Nokia may give Intel deeper inroads into the cellphone chip market, where the company failed to gain a toehold until this month, when it announced the first handset powered by an Intel signal processor.
Wider acceptance of WiMAX is likely to fuel demand for Intel's other semiconductors, such as those used in laptops, Maloney has said.
"This is a nice step forward today because Nokia has a strong set of skills," Maloney said. "It's an open standard and there are, and will be, competitors."
Intel added to a roster of partnerships that includes AT&T Corp and BT Group Plc, which plan trial services based on the technology later this year. Nokia intends to sell WiMAX handsets by 2008, though it may introduce them sooner, Maloney said.
"It's a good deal in that it shows that Intel is clawing their way into Nokia," said David Wu, an analyst at Global Crown Capital in San Francisco, who has a "neutral" rating on Intel's stock. "It also shows that Nokia is thinking that they might need WiMAX as well as the cellular standards."
Texas Instruments is Nokia's largest supplier of the processors that control the main functions of cell phones. Intel supplies Nokia with memory chips.
WiMAX broadcasts Internet access over radio waves up to 48km. It offers download speeds comparable to those from broadband connections sold by phone and cable service providers.
Nokia and Intel plan phones and other devices, such as laptops, that operate on either cellphone or WiMAX networks, letting customers use whichever delivers faster access.