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Intel talks up chips for growing wave of connected gadgets

People visit the Intel booth at the 2013 Computex exhibition at the TWTC Nangang exhibition hall in Taipei June 4, 2013. REUTERS/Pichi Chuan
People visit the Intel booth at the 2013 Computex exhibition at the TWTC Nangang exhibition hall in Taipei June 4, 2013. REUTERS/Pichi Chuan

By Noel Randewich

SAN FRANCISCO (Reuters) - Intel Corp talked up new chips on Tuesday aimed at medical equipment, automobile entertainment systems and other devices far from its shrinking core market of personal computers.

Intel and other technology companies are betting that what they call the "Internet of Things" -- a trend toward connecting everything from bathroom scales, to factory robots and skyscraper ventilation systems to the Internet - will create massive demand for new electronics and software over the next several years.

Close to a dozen electronics manufacturers have started using Intel's new Atom E3800 chip, a variant of Intel's low-power mobile processors, Ton Steenman, general manager of Intel's Intelligent Systems Group, told reporters at an event.

"It will allow us to reach into a whole new set of applications and billions of devices we have never been able to delve into before," Steenman said of the new chip.

He said the Atom chips became available this quarter and offer features useful in industrial machines, like error correction and the ability to withstand high temperatures.

A smaller, scaled down chip, part of Intel's recently announced Quark line of very low-power components, is due to begin shipping in the first quarter of 2014.

The world's biggest chipmaker, Intel dominates the PC industry but it was slow to adapt its chips to be suitable for smartphones and tablets.

The Santa Clara, California company is now scrambling to tap into new markets to help it keep its multi-billion dollar fabrication plants humming near full capacity and protect its enviable 63-percent gross margins.

Steenman declined to say when he expects chips aimed at the Internet of Things to deliver meaningful sales for Intel, which had revenue of $53 billion last year. He also declined to say how much Intel would charge for the chips.

Patrick Moorhead, an analyst at Moor Insights and Strategy, estimated that the Atom chips likely sell for between $20 and $50 each, while the Quark chips may be priced near $5 a piece.

By comparison, Intel's powerful, and highly profitable, Xeon chips for servers typically sell for hundreds or even thousands of dollars each.

(Reporting by Noel Randewich; Editing by Marguerita Choy)

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