Intel CEO Paul Otellini used his keynote appearance at this week’s Consumer Electronics Show in Las Vegas to announce that the world’s biggest semiconductor vendor is making a return to the mobile device space after an absence of four years. Otellini demoed a smartphone from LG using a lower-power version of its Atom processor, codenamed Moorestown. LG’s GW990 smartphone has a 3D interface, can display HD video and will go on sale in the second half of 2010. Intel’s move pitches it into a battle with mobile chipmakers such as Qualcomm. Mr Otellini told the Financial Times that the new phone and chip showed that Intel had reached the point where it was now competitive (Intel’s previous attempt to crack the handset market failed and it sold its mobile phone chip business to the chipmaker Marvell in 2006). “And it’s going to get better, over time we should have the best silicon in terms of performance and power characteristics,” he said, referring to Intel’s advantage in miniaturisation.

Otellini’s keynote dwelled less on the company’s new chips for the PC market – introduced this week – and more on the company’s actions in other markets, reflecting the fact that personal computing is expanding beyond the PC and now encompasses a range of electronic devices. Recently Intel has dominated the netbook market, a category now under attack from the mobile industry in the form of ‘smartbooks.’ In an effort to bolster netbook offerings, Intel this week announced an application store for netbooks called the Intel AppUp Centre, with support from manufacturers Acer, Asus, Dell and Samsung.