I was reading an article today and my light bulb finally went on - Blam! I really got how cool the Apple and Intel deal is…

I spend a fair amount of my time working with startups and I am convinced that 95% of innovation occurs in small companies. Only a small percentage of these fledgling companies beat the odds and makes their “cool” idea into a reality. They used to go public but now they mostly get snapped up by bigger companies that are higher up the food chain.

Large companies spend a lot less on research than they did in years past. What little they do invest, they spend on making incremental improvements to existing products. They spend very little on research that is capable of producing major breakthrough results.

I almost forgot that big companies can still put together smart deals that can rock our world. I think that Apple and Intel did just that two years ago.

The breakthrough is not the recently released Mac that now has “Intel inside”, it is the next generation iPod.

The devices that are going to rock your world are the “Mobile Me” devices from Apple. “Mobile Me” is a new trademark that I think, Apple will use to describe new handheld devices that give you almost everything you want, all the time, wherever you want it.

I know what you want is a lot! And Apple is going to give it to you. When they do, I think you will reward Apple with even bigger buckets of your dollars. Why not? If they deliver you a phone + music + email + video + browsing + fast broadband that is easy to use and easy to update; and all for under $500.

Lets look at what Apple and Intel have accomplished:
Music Player: very well done.
Video Player: good start, needs more pixels
Player Content: iTunes is well done, just needs a subscription plan
Cell Phone: weak start, Apple not committed yet, but Intel has can change that
Browsing/Email: not yet an iPod feature, but consider the Intel influence.
Mobile Broadband: Intel is betting the ranch on Wi-Fi and WiMAX

Intel is clearly betting it’s future growth on wireless networking. It blew billions on phone chips with little to show for it, then turned to wireless networking with a passion. A few months ago Intel launched a it’s Digital Communities Initiative, to help cities across the globe build their own wireless broadband networks. Intel is investing money and energy to encourage the spread of Wi-Fi and WiMAX.

While city-wide hotspots are a nice idea for laptop users, their real appeal is to users of a new generation of wireless device users. But wireless networking is based on open standard that is a direct competitor to proprietary cell phone networks. Who is going to build the cool new devices that need the wireless network? Why Apple, of course.

The chip maker can forget about Motorola, Samsung, Erickson, and Nokia competing with their own cell phones. That made Apple look awful good; a perfect choice for building device that really takes advantage of the new WiMAX features.

With the next-gen iPod, you will be able to move away from the download model and subscribe to real time media and entertainment. Forget satellite radio, take your iPod to the park and watch a movie, or listen to music feeds.

Since you are plugged into the net, place all the calls that you like call – after all it’s free. It’s all part of the basic service. If you feel creative, use the integrated camera to video conference with a friend or capture some scenes while you are on vacation to share with your family back home. “Hey honey, look where I did today.... nah, I’m alright, really”.

If you think text blogs are cool, you will love the new generation of real time video iPod blogs. When news breaks you’ll have lots of on scene video blog to choose from to track the breaking news.

Apple + Intel may be big but “Mobile Me” will be truly cool and very disruptive. I know they can make the technology work, lets see if they start spending to defeat the cell phone lobby and get politicians to back municipal WiMAX networks.

John Thomas is an author and business consultant who works with entrepreneurs and business owners. He takes time to pursue his passion for iPods at iPod-Tips.com.