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As expected, the surprise announcement of a collaboration between Intel and Nokia focused on a new class of devices, distinct (in Nokia's mind at least) from smartphones, and running Linux rather than the Finn's usual Symbian OS. While the agreement does not promise Intel a magic pass to enter the mainstream smartphone segment, nor an immediate revenue boost, it does give the chip giant a huge boost in the nascent MID/tablet sector that falls between netbooks and smartphones - a category that various players have been trying to define and control, and which Qualcomm recently christened the smartbook. While a combination of Linux and an ARM-based processor like Qualcomm's Snapdragon seemed the natural base for this type of product, Nokia knows how to use 'divide and rule' to maintain its power, and by anointing Intel Atom, it will aim to ensure that it can take the lead in defining the mobile internet device space in future.

The bald details of the agreement are much as expected. The companies will work on a new class of devices for the emerging and ill-defined 'smartbook' or 'MID' space, giving Intel its first real passport since it sold XScale in 2006 into the 3G market. The platform will integrate Intel's Moblin Linux-based OS, which is optimized for Atom, and Nokia's Maemo-based Linux system, as used on its N810 tablet. This software will run on a future low power iteration of the Atom processor. Intel will also acquire a Nokia HSPA/3G modem IP license for used in future handhelds. The architecture will be targeted at a wide range of devices that combine the features of smartphones, netbooks and media players. Nokia is promising to create products that redefine the whole hybrid category, but in the meantime, there will also be more prosaic targets such as conventional video players, mini-netbooks, net-tops and in-car systems.

"We will explore new ideas in designs, materials and displays that will go far beyond devices and services on the market today. This collaboration will be compelling not only for our companies, but also for our industries, our partners and, of course, for consumers," Kai Oistamo, executive VP for devices at Nokia, said in a statement.

A wide range of open source technologies will be harnessed to enrich the Moblin/Maemo platform, including the oFono project that Intel and Nokia kicked off together last month, plus Mozilla, X.Org, D-BUS, Tracker, GStreamer, and PulseAudio - and vendor-controlled but cross-platform systems like Flash.

The situation is very different this time around, compared with when Intel sold XScale in 2006. At the high end, the mobile chip market is more fluid than in the days when Texas Instruments was virtually Nokia's inhouse silicon arm. Just as importantly, this is not a deal about breaking into an entrenched market (there is no hint of Intel supplying Nokia in mainstream smartphones) but about a new category of device that is expected to drive the bulk of high value mobile internet applications and growth from 2012 onwards, in developed markets.

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