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Nokia, Chipmakers Form Alliance
 

Three chipmakers and Nokia, the world’s largest maker of mobile phones, formed an alliance recently that hopes to attract dozens of rivals and put the design of new phones on a faster footing.

STMicroelectronics, STM PA and Texas Instruments TXN.N said they had formed an alliance to spur development of a wider range of wireless features and to guard against any one industry player dominating the new generation of phones.

Wireless equipment makers are struggling to dig themselves out from a slow transition to a new generation of mobile phones that offer Internet and computer features and not just voice calling. Critics say the lack of affordable new features have delayed consumers from snatching up the new devices. The companies said they would be joined in the alliance by Nokia NOK1V.HE, manufacturer of more than one-third of the mobile phones sold world-wide, and ARM ARM.L ARMHY.O , a designer of core processor chips used in most wireless phones.

The four initial members of what is being called the Mobile Industry Processor Interface, or MIPI, Alliance said they would recruit other phone, hardware and software vendors to help define the technology building blocks of new phone features.

Common rules are needed because the wide variety of phones, networks and software can fail to work together properly when using advanced services such as picture messaging, e-mail, calendars, games and video camera phones.

"It’s intended to include hundreds of companies. It is not exclusive of any company," said Tom Vial, manager of strategic alliances for Texas Instruments’ wireless business. "You will see many leadership companies in each product category," he said of the group’s hopes of attracting members.

In contrast to the computer industry—in which the hundreds of thousands of product developers are able to build products to run on a single basic standard dominated by Microsoft in software and Intel in hardware—the mobile phone industry has hundreds of suppliers but few common product standards.

But the move by four established players in the global industry could also become a way to deflect challenges from newer entrants, such as Microsoft MSFT.O and Intel INTC.O, that are gunning for a larger share of mobile phone markets.

Handset and chipmakers such as Motorola, Samsung and Qualcomm would also need to participate to make the group a meaningful industry alliance, analysts said.

While backers of the push denied that the aim of the alliance was to include or exclude other industry powers, analysts said that the proof will hinge on whether other major players sign on to become members in coming months.

"The goals are great, the potential is great, but it is only going to succeed if there are other major industry players," said Alex Slawsby, an analyst with market research company International Data Corp. in Framingham, Mass.

"A lot of the alliance’s success will depend on whether Intel, Motorola and Samsung see a benefit," he said.

The three are among the world’s biggest makers of electronic circuits and are all big suppliers of wireless chips.

As part of the MIPI Alliance, the founders said that 10 working groups will be established to develop technology feature specifications in key areas such as camera and screen display. Alliance backers said they expect to announce that dozens of companies have signed up by later this quarter.

MIPI will set rules for other developers to build products that work seamlessly with software, communications and system controls that define the functions and features of phones. More than 100 companies are expected to sign up, Vial said.

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