Sony, Intel Form Duet For Mobile Devices

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October 16, 2003 (12:31 PM EDT)

Intel Corp. and Sony Music Entertainment Inc. said Thursday they will work together on technology for playing music and video on cellular phones and other mobile devices.

The collaboration is to optimize Sony's mobile applications, services and content for devices running the Intel Personal Internet Client Architecture, a blueprint for developing hardware and software in parallel for higher performance.

PICA is built around Intel's XScale processors for handsets. The Santa Clara, Calif., company is also a major manufacturer of flash memory and baseband chips, two other key components inside mobile devices.

PICA competes with Texas Instruments Inc.'s Open Multimedia Application Platform, which is used in Palm devices. But the real prize for both companies is the cell phone.

About 500 million handsets are sold each year, and that number is expected to increase as cell phones and PDAs converge into handsets capable of accessing digital media and business applications over high-speed networks.

The market for so-called "smartphones," however, is only starting. Besides the need for better hardware performance, wireless carriers need to build the broadband networks necessary to distribute content and services.

"What we're really seeing here is still the early days, with the 500 million units-a-year prize at the end of it," Martin Reynolds, analyst for market researcher Gartner, said.

Intel and Sony also plan to co-develop applications and services for phones based on Intel chips, and work at luring handset makers and wireless carriers to use their combined products, which are scheduled to be available in 2004.

The partners will focus first on delivering PC-quality playback for Sony's digital music and video content, and work later on developing PC-based multimedia content. Intel is also working with other content providers.

Sony Music's portfolio of products and services currently enable carriers to offer subscribers the ability to download images, ring tones, music videos and other entertainment services. Sony Music is a division of Sony Corp., which reported $68.8 billion in sales in the fiscal year ended March 31.

"Intel is laying the groundwork here," Reynolds said. "Every time they can get a win with a company that produces a lot of this technology -- like Sony -- then Intel's sowing seeds that it can reap later."