Why Intel should buy Nokia

There's a lot of talk about which company, if any, should buy Nokia: Lenovo was the latest company rumoured to be interested (until a Lenovo executive dismissed the idea as 'a joke').

But, for me, there's one firm that would be a more natural fit than any of the others being rumoured as potential new owners of Nokia: Intel.

Of course, there's been no suggestion that such a thought has ever occurred to either Nokia or Intel, and no suggestion from either that such an acquisition is ever likely to happen — but the way the mobile market is developing right now, there's no denying an alliance between the pair would make a lot of sense.

Firstly, Intel is desperate to get its chips into the smartphone market in a big way, as the introduction of the first handsets to use the Intel Atom Z2460 processor (previously codenamed Medfield) showed.

However, right now, Intel clearly needs the smartphone market more than the market needs it. Whereas the PC market is mature, stable and a little bit dull, mobile is a huge, rapidly growing market — and therefore one Intel is keen to take a more significant slice of.

So far, in order to boost its presence in smartphones, Intel seems to be trying to build support organically, letting its chips become known and recognised as a serious option for smartphone makers over time — much the same way its desktop PC business developed.

Allegiances

It's a strategy, however, that's unlikely work in mobile: there are too many pre-existing contracts and relationships that are likely to leave the market impenetrable to Intel for the foreseeable future.

Most major mobile manufacturers (think HTC, Samsung, Apple) have a fairly strong allegiance to their past devices and the technology that's used within them — making them unlikely to swap away from ARM-designed chips any time soon, particularly given the investment that would be required to retool for Intel's x86 chip.

But Nokia on the other hand — which also uses a Qualcomm-made and ARM-designed CPU — isn't as inextricably tied to its hardware platform. For one thing, its flagship devices are yet to move to dual- or quad-core processors.

Shared history

Another factor in favour of a union is Nokia and Intel's shared history — albeit not the most successful — of working together in mobile, thanks to their collaboration on the Linux-based MeeGo mobile OS. What's more, Intel has a long relationship with Microsoft, handy given the impending release of Windows Phone 8 and Nokia's new-found commitment to Microsoft's platform.

The fact that Intel is currently using Android, as seen with Orange's San Diego smartphone, isn't much of a hindrance; Intel has already said it hasn't written off the idea of using Windows Phone 8 in future, and due to the x86 architecture, Android phones that use Intel's Atom processor won't even run all of the apps on Google Play, suggesting the relationship between Android and Intel isn't all it could be.

By joining forces with Nokia, Intel could also avoid putting all its eggs in one basket, and linking its fate to either Google or Microsoft's mobile ambitions. Instead it would secure an existing, well-recognised smartphone brand to kick-start its own mobile plans.

As a bonus, it would also give Nokia an easy way into using the Android OS for a future range of phones, diversifying its platform options.

With ARM-designed chips dominating the market (present in somewhere around 95 percent of big brand smartphones currently on sale), Intel will need to do something significant to create any kind of impact on the market. Buying Nokia could be the sort of leftfield move it needs to help it do just that.