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Nokia to start using Infineon chips in H1'08 -CEO

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HELSINKI/NEW YORK, Aug 2 (Reuters) - Nokia (NOK1V.HE: Quote, Profile, Research) will start shipping phones using a single-chip technology from Germany's Infineon (IFXGn.DE: Quote, Profile, Research) in the first half of 2008, the head of the world's top cell phone maker said on Thursday.

The comments from Nokia Chief Executive Olli-Pekka Kallasvuo, which follow previously disclosed plans to use Infineon chips, pushed down shares of chip maker Texas Instruments Inc (TXN.N: Quote, Profile, Research), whose biggest client is Nokia.

"Shipments of the products based on Infineon chipsets will begin in the first half of 2008," Kallasvuo told analysts during a conference call to discuss quarterly results.

While investors had known about Nokia's plans to work with other chip vendors, the comments raised new concerns that TI could be losing some business at Nokia to rivals, said American Technology Research analyst Doug Freedman.

"Now you're starting the see the impact it has. The strength of Nokia is having less of an impact on TI," he said.

TI shares fell as much as 2.5 percent on the New York Stock Exchange, but later were down less than 1 percent at $34.79.

Nokia's U.S. shares were up $2.38, or more than 8 percent, at $30.79 after it posted a better-than-expected profit on strong demand for its mobile phones. TI's revenue outlook for the current quarter had recently disappointed investors.

"Nokia's product portfolio continues to improve and we will start to ship several new products this quarter," Kallasvuo said in reference to the Infineon deal. "However, since these products will start shipping towards the end of the quarter, they will likely have a limited impact on volumes."

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