Google and Intel: Who Needs Whom More?

Intel (NASDAQ:INTC) and Google (NASDAQ:GOOG)  forged a deal to tune Google's Android operating system to run well on Intel's processors Sept 13.
Intel CEO Paul Otellini and Google's lead Android creator Andy Rubin stood onstage together at the Intel Developer Forum to unveil the pact. The two showed off a prototype smartphone using Intel's "Medfield" Atom mobile processor to power Google's  Android "Honeycomb" operating system, originally tailored for tablets.
Both companies positioned the deal as mutually beneficial; Google gets another major processor OEM building chips for its platform, while Intel has a nice on-ramp to providing chips for the broadest smartphone platform in the world.
Otellini said Intel's Medfield chips will appear first in Android phones in the first half of 2012 to challenge the popular mobile processors made by ARM Holdings.
Yet most analysts agree Intel, which was late to the mobile processor market after pumping out countless chips for power-chomping PCs and servers, has the most to gain from the relationship.
After all, Intel is now positioned to get its chips into the lush, verdant markets for Android  smartphones and tablet computers, which rely on low power chips that don't burn out as fast. IDC recently predicted smartphones and tablets will grow to eclipse wireline machines such as desktop PCs by 2015.
"Intel needs Google more than the other way around, but Google certainly wants the broadest distribution possible, which is why the company is investing – and has invested in the past – to ensure that Android runs on both ARM and Intel," Current Analysis analyst Avi Greengart told eWEEK.
Industry analyst Roger Kay added that Intel needs Google as much as Microsoft needs ARM.
"Google has lots of distribution without Intel," Kay told eWEEK. "But Google gets silicon optimization for its OS.  Eventually, Atom may be a better platform than ARM.  Google has to hedge its bets."
Industry analyst Jack Gold sees the situation a bit differently. Despite Android's momentum, the relationship is crucial to both companies' strategies.
"Android itself has not always been that good a performer, and some of the software choices Google has made are troublesome," Gold explained. For example, the Honeycomb OS has been labeled buggy and blamed for lackluster Android tablet sales.

Meanwhile, Gold noted that for all of its prowess of a chipmaker, Intel has a unique ability to make software and particularly OSes that run extremely well.
"While they won't necessarily help Android on ARM, they can certainly make Android run great on the Intel architecture, and it's clear Google wants to be a leading OS provider, including on the x86 platforms (PCs)," Gold told eWEEK. "Any help Intel provides Google for use on x86 will also help Android running on ARM since the technology will be repurposed. So, my bottom line is both companies actually have a great deal of benefit from a tight relationship."
Regardless, Google is doing a lot of hedging around Android it probably never expected to have to do. The company ponied up $12.5 billion to buy Motorola Mobility (NYSE:MMI), a move the search engine provider positioned as a play to grab massive patent portfolio totaling 17,000-plus patents and counting (7,500 pending.)
However, some industry watchers believe, based on Motorola's proxy filing with the SEC, that the phone maker forced Google to purchase it to protect it from gross litigation in the Android ecosystem, where Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL) have sued Motorola for patent infringement over its Android handsets.

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Tags: Google,Intel