Intel & Nokia - it's a vital alliance... for both

The collaboration seems to be more than a straight silicon supply deal, indeed if that was what it was ever meant to be. Remember Nokia already has supplier deals with Qualcomm, TI and ST-Ericsson.

For Intel it could turn into a crucial partnership and one urgently needed to support its Atom mobile processor technology.

The reason can be expressed in a single word - Linux.

Both companies have made clear the importance of their plans to work together on open source mobile Linux software projects. And it is likely that Nokia needs a partner to help with its Linux-based mobile platform plans as much as Intel does.

The mobile market leader is navigating the move to new markets based on more PC-like high-end handsets called variously smartphones, smartbooks and netbooks.

Nokia is facing tougher competition than ever before from the Apple iPhone and a slew of new smartphones and netbooks based on Google's Android operating system.

It has Symbian, a proprietary OS which it is now turning into an open-source platform to match other platforms like Linux and Andorid.

But it may consider it needs a strong ally to match Google and Android, which can claim Qualcomm, Samsung and Motorola as supporters.

Intel would seem to fit the bill.    

In return the chip maker gets Nokia's HSPA/3G modem IP to strengthen its mobile chip offering.

The modem IP will sit alongside the Atom processor and the PowerVR SGX graphics processor licensed from Imagination Technologies.   

But the real key to the deal will be the open source software initiative, which includes the creation of application-rich mobile platforms based on Intel's Moblin and Nokia's Maemo open-source platform projects.

It should not be forgotten that this deal follows Intel's acquisition last month of Wind River.

The software company gives Intel a range of embedded development tools supporting Linux platforms.

At the time of the Wind River acquisition Intel indicated its ambitions to play a role in the development of future Linux-based mobile platforms.

This deal with Nokia confirms those ambitions as Intel tries to compete with chip rivals Qualcomm and Texas Instruments, along with a range of ARM-based processors from the likes of Freescale and NXP.