INTC Intel Corporation

By Ted Greenwald 

Intel Corp. on Wednesday announced its first communications chip for the fifth-generation cellular standard known as 5G, a bid to capture some of the smartphone market that has eluded it as telecom carriers roll out compatible services in coming years.

The company expects to make the 5G Modem available in limited quantities in the second half of 2017 and envisions its use in cars, home networks, and mobile devices.

Intel's announcement follows Qualcomm Inc.'s October announcement of a 5G modem, also expected to be available in limited quantities in the latter half of the year.

Widespread 5G services are still well in the future. Telecommunications industry groups are hammering out the technical specification. Verizon Communications has discussed rolling out a 5G offering in the coming year, and South Korean telecom carriers are expected to launch 5G-class services in time for the Winter Olympics in February 2018. However, most telecom carriers expect to launch such services in 2020.

Modem chips manage cellular connections, while processor chips handle calculations involved in running smartphone apps. Intel has struggled to gain a foothold in the market for both kinds of chips.

The forthcoming Intel 5G modem is expected to deliver data rates exceeding 5 gigabits per second -- roughly 100 times faster than peak speeds claimed by most networks that use the fourth-generation technology called LTE -- to manage communications among the Internet of Things that purportedly will flood cell networks with data from what the company estimates will be 50 billion connected devices. Intel said the new unit would pair with its existing LTE modems for devices that require access to both 4G and 5G networks.

5G connectivity is part of Intel's automotive platform, also announced Wednesday, which includes hardware and software. The company expects fast, high-capacity connections will be necessary for the advent of self-driving cars that make snap decisions about how to behave by gathering information about their surroundings and sending it to the cloud for processing.

Modem chips have become a priority for Intel. The company is eager to reduce its dependence on selling processors for the slowing personal computer market, and for years focused largely on pushing its processors into smartphones. But nearly all handset makers use processors from companies that license technology from ARM Holdings PLC, initially because of power consumption advantages and now mainly because they can choose between many chip suppliers.

At the same time, Intel has failed to gain much traction in cellular modem chips for smartphones, where Qualcomm is the biggest supplier. One bright spot for Intel's prospects in that market is Apple Inc., which replaced Qualcomm's modem chips with Intel's in some iPhone 7 handsets.

Write to Ted Greenwald at Ted.Greenwald@wsj.com

(END) Dow Jones Newswires

January 04, 2017 18:42 ET (23:42 GMT)

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