Hewlett-Packard to Use Qualcomm Chip

The world's biggest personal-computer maker is testing Qualcomm's Snapdragon chip for use in a scaled-down personal computer

By Ian King

(Bloomberg) — Hewlett-Packard Co. (HPQ), the world's biggest personal-computer maker, is testing Qualcomm Inc.'s (QCOM) Snapdragon chip for use in a scaled-down personal computer, a challenge to Intel Corp.'s (INTC) dominance in the processor market.

Hewlett-Packard is demonstrating the computer at the Consumer Electronics Show in Las Vegas this week, San Diego-based Qualcomm said yesterday in a statement. The device has a third-generation wireless connection and supports Wi-Fi networking.

The accord is a boost to Qualcomm, the world's largest maker of mobile-phone chips, in its push into a market dominated by Intel. Lenovo Group Ltd., China's biggest PC maker, is also working on a so-called smart book computer that uses Snapdragon.

The market for chips used in wireless devices, including phones and other mobile Internet devices, will expand 14 percent to more than $46 billion in 2010, according to IDC, a research firm based in Framingham, Massachusetts. Intel is also going after that market through its Atom product, which is designed for scaled-down laptops.

Marvell Technology Group Ltd. (MRVL) and Freescale Semiconductor Inc. are also demonstrating new kinds of Internet devices at CES. The event will reveal which companies have made progress in persuading computer and consumer-electronics companies to use their components.

Acer Inc., Samsung Electronics Co., LG Electronics Inc. and 12 other computer makers also signed up to use Snapdragon, Qualcomm said in August.

Hewlett-Packard, based in Palo Alto, California, rose 2 cents to $52.20 by 4 p.m. in New York Stock Exchange composite trading. The shares advanced 42 percent in 2009. Qualcomm, which advanced 29 percent last year, gained $1.38 to $48.98 on the Nasdaq Stock Market. Intel fell 20 cents to $20.60.

To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net.

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