Intel will start supplying a processor to LG by 2010, the two companies said at the GSMA Mobile World Congress, which begins today in Barcelona, Spain. Separately, Texas Instruments said its developing a mobile-phone chip that will load Web pages more quickly and help the devices take better pictures.

Intel, whose processors run more than 80 percent of the worlds personal computers, has struggled for about a decade to gain a foothold in chips for phones. By targeting mobile Internet devices, the company is designing products that bridge the gap between portable computers and handsets, giving it a new way to enter the market.

Chief Financial Officer Stacy Smith said earlier this month that Intel wont succeed unless the largest producers of mobile- phones become its customers. While LG is the worlds third- largest phone maker, the product its developing with Intel will be more of a handheld computer than a handset. Mobile Internet devices are bigger than most phones and typically have keyboards.

Texas Instruments new chip, called the OMAP 4, is designed for smart phones, a category that includes Apple Inc.s iPhone and Research In Motion Ltd.s BlackBerry.

Sharper, Faster

The processor will let devices display high-definition video, take 20-megapixel photos, load Internet pages 10 times faster, and play a week of audio without exhausting their batteries, said Greg Delagi, head of the Dallas-based companys wireless business.

Texas Instruments lost its position as the top maker of mobile-phone chips to Qualcomm last year. The new processor is a bid to beat back mounting competition and counter slowing industry sales. Qualcomm is developing its own new processor, called Snapdragon.

The industry is counting on new chips to entice people to replace their current phones, since the market for handsets is saturated.

“The growth rate is slowing and theres a dramatic shift to replacement,” Delagi said. That effort is “all about what cool, new, sexy capability is going to drive you and me and our kids to demand a new cell phone.”

Palm Pre

Texas Instruments will send samples of the new chip to prospective customers later this year, and the processor will go into production in 2010, Delagi said. The companys existing OMAP 3 chip is the main processor in Palm Inc.s Pre phone, set to debut this year.

LG, based in Seoul, overtook Sony Ericsson Mobile Communications Ltd. and Motorola Inc. to seize the industrys No. 3 spot in the fourth quarter. Nokia Oyj and Samsung Electronics Co. occupy the top two positions, according to Boston-based Strategy Analytics.

Source