Intel talks up chips for growing wave of connected gadgets

Reuters

By Noel Randewich

SAN FRANCISCO, Oct 8 (Reuters) - Intel Corp talkedup new chips on Tuesday aimed at medical equipment, automobileentertainment systems and other devices far from its shrinkingcore market of personal computers.

Intel and other technology companies are betting that whatthey call the "Internet of Things" -- a trend toward connectingeverything from bathroom scales, to factory robots andskyscraper ventilation systems to the Internet - will createmassive demand for new electronics and software over the nextseveral years.

Close to a dozen electronics manufacturers have startedusing Intel's new Atom E3800 chip, a variant of Intel'slow-power mobile processors, Ton Steenman, general manager ofIntel's Intelligent Systems Group, told reporters at an event.

"It will allow us to reach into a whole new set ofapplications and billions of devices we have never been able todelve into before," Steenman said of the new chip.

He said the Atom chips became available this quarter andoffer features useful in industrial machines, like errorcorrection and the ability to withstand high temperatures.

A smaller, scaled down chip, part of Intel's recentlyannounced Quark line of very low-power components, is due tobegin shipping in the first quarter of 2014.

The world's biggest chipmaker, Intel dominates the PCindustry but it was slow to adapt its chips to be suitable forsmartphones and tablets.

The Santa Clara, California company is now scrambling to tapinto new markets to help it keep its multi-billion dollarfabrication plants humming near full capacity and protect itsenviable 63-percent gross margins.

Steenman declined to say when he expects chips aimed at theInternet of Things to deliver meaningful sales for Intel, whichhad revenue of $53 billion last year. He also declined to sayhow much Intel would charge for the chips.

Patrick Moorhead, an analyst at Moor Insights and Strategy,estimated that the Atom chips likely sell for between $20 and$50 each, while the Quark chips may be priced near $5 a piece.

By comparison, Intel's powerful, and highly profitable, Xeonchips for servers typically sell for hundreds or even thousandsof dollars each.

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