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Intel moves to spread WiFi

The burgeoning Wi-Fi market will soon get an additional shot of adrenaline from chip giant Intel Corp., which last week disclosed plans to invest $150 million over the next two to three years in start-up companies developing 802.11 wireless LAN technologies.

''We think [WLAN] is probably the ripest area for investment and innovation,'' Mark Christensen, vice president and director of Intel Capital's communications investment group, told reporters, adding ''802.11 is almost viral in nature. It's taking off almost on its own without any help from the industry. That's what makes this whole area so darn exciting.''

Observers note that Intel hopes the investments can convince makers of wireless systems to utilize its chip technology.

802.11a is a high-speed WLAN standard for the 5GHz band, which supports data rates up to 54Mbps. 802.11b is the WLAN standard for the 2.4GHz band, with data rates of up to 11Mbps. 802.11b technology is the most widely deployed of the two, and is used for wireless public 'hot spots' at airports, hotels and conference centers. Gartner Dataquest has projected that there will be 38,000 wireless gateway locations in North America by 2006.

Officials said the investments will come from a $500 million Intel Communications Fund established by the company in 1999 to accelerate Intel voice and data communications initiatives. Officials noted that Intel has already invested about $25 million in more than 10 companies in the WLAN space. Most of the 30 so-far undisclosed new companies now targeted for the largesse are start-ups in the middle of their Series A or B funding.

Although Intel Capital is primarily interested in investing in start-ups with service, software, hardware and chip technologies that support wireless infrastructures, the firm's Christensen said the division may well seek out strategic investments in companies with hardware and software components that can be integrated into the company's new Banias platform. The company probably won't be looking to invest in chipset providers, he noted.

''We are looking at silicon, if innovative,'' Christensen said. ''We have an end-to-end view, including the infrastructure, and there is more innovation on the infrastructure side rather than the client side.''

Intel's recently announced Banias platform is the company's first wireless-specific semiconductor. Due in the first half of 2003, it combines 802.11a and 802.11b wireless LAN connectivity with a processor and chipset. The company expects to ship millions of the low-power chips next year.

Intel also currently sells 802.11a and 802.11b WLAN access points, adapter cards and software.

Intel is a board member of the Wi-Fi Alliance, and is actively involved in IEEE matters, the Bluetooth SIG and the HomeRF Working Group.

About the Author

John K. Waters is a freelance writer based in Silicon Valley. He can be reached at john@watersworks.com.

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