Intel and Nokia just announced an agreement to develop a new class of Intel-based mobile computing device and chipset architectures. Intel sees the agreement as a much-needed endorsement of its Atom chipset and its applicability to mobile computing.

Adam Leach, device principal analyst at Ovum, said, "Since Intel’s launch of its Atom family of processors, it has made no secret that it intends to make a serious play in mobile. The company hopes that taking a slice of the mobile device market will provide an engine for growth outside of its traditional PC and server markets."

Nokia sees the agreement as an opportunity to explore new types of mobile broadband devices and ensure that its smart phone offerings aren't sidelined by manufacturers entering from the PC market. This is also an opportunity for both companies to align their software platforms and create a compelling open-source platform that could rival today’s smart phone and netbook platforms.

Leach said, "The two companies have agreed to cooperate on key open-source projects and use these common technologies in Moblin (Intel’s Linux-based software platform for Atom) and Maemo (Nokia’s Linux-based software platform for its Internet Tablet products). This is good for Nokia as its platform will become more suited for the growing segment of mobile internet devices and netbooks; good for Intel as its platform will become more suited for smaller mobile devices and good news for developers as it will, to an extent, reduce fragmentation in Linux-based devices. However, the real opportunity here is for Nokia and Intel to combine their efforts and back a single Linux-based platform for mobile devices. This could provide device vendors with a credible open alternative to existing smartphone and netbook platforms."

However, Intel—not to remain a niche player in the mobile market—still must prove that its Atom-based chipsets can compete with ARM-based alternatives on low power performance. The current family of Atom chipsets isn't suitable for use in handsets, so Intel has developed a new market segment for larger form-factor mobile internet devices (MIDs) positioned above smartphones and below notebooks. To reach further down into the volume part of the mobile market and start reaching the expanding high-end smart phone segment, Intel needs to produce a chipset that can match the power/performance ratio of processors based on the designs of ARM. This week’s announcement is a sign that at least Nokia believes that Intel’s roadmap is credible and that the company can in time provide a competitive offering against ARM-based alternatives