Intel Winds Up Big WiMax Pitch for 2008


As Sprint Nextel and Clearwire build out their mobile-broadband WiMax networks, silicon spinner Intel is pushing to create the ecosystem of devices that will connect to them.

To drive demand, Intel next year plans to launch an “Intel Inside”-style marketing campaign aimed at both consumer and business users. The company has produced WiMax wireless-networking components for end devices, like laptop computers, as well as for wireless base stations from Motorola, Samsung and Nokia.

“We’re going to create pull-through for WiMax,” said Ron Peck, director of Intel’s WiMax unit. “With a relatively new technology like this, you want to aggressively go after consumers and small businesses.”

Added Peck, “My job is make sure WiMax happens in North America.”

WiMax service from Sprint and Clearwire is expected to offer 2 megabits per second to 4 Mbps of Internet bandwidth and be available to 100 million people by the end of 2008. The two companies last month announced a 20-year joint development agreement to make their WiMax networks interoperable.

Sprint plans to test WiMax in Chicago, Baltimore and Washington, D.C., by the end of this year, and offer commercial service starting in April 2008.

Intel will market WiMax under the Centrino brand, which encompasses the company’s integrated solutions for short-range Wi-Fi wireless networking. When Intel launched Centrino in 2003, it spent an estimated $300 million marketing the technology; Peck would not specify how big the WiMax marketing budget will be.

“We want people to think of WiMax as a mobile DSL [digital-subscriber-line] experience,” Peck said. “That’s different from what people experience with wireless today.”

At this point, Intel does not have any signed-and-sealed deals with PC manufacturers to incorporate WiMax into their notebooks, Peck said. The company has been working with several PC vendors for the last nine months on design and testing to work through issues like antenna design and interference.

In 2008, Intel expects to offer WiMax components on minicards and half-minicards, which plug into a notebook’s motherboard. By 2009, the company hopes to have one piece of silicon that provides both Wi-Fi and WiMax connectivity.

Intel is first focusing on WiMax notebook PCs because “the usage model is known and the [distribution] channels are place,” Peck said, although he also foresees a variety of future mobile Internet devices that work with the broadband technology.

If WiMax takes off, cable operators could be a good position. Sprint has already set up a partnership with Comcast, Time Warner Cable, Cox Communications and Advance/Newhouse Communications, which are steadily rolling out the Pivot mobile-phone service.

This week, it came to light on Time Warner Cable's earnings call that Sprint opted to exit SpectrumCo, a partnership with the same four operators, which acquired Advanced Wireless Spectrum in 2006. The cable companies bought out Sprint’s 5% interest in the venture.

Still, with Pivot in place, analysts said it would be a logical next step for cable to offer WiMax through Sprint. Bundling a mobile-broadband service as an adjunct to cable-modem service “would be a powerful combination,” In-Stat Daryl Schoolar senior analyst said. (In-Stat is owned by Reed Business Information, which publishes Multichannel News.)

A survey of 1,200 consumers by In-Stat earlier this year found that more than one-half said they would change their current home broadband provider for one that bundles in high-speed wireless Internet.

According to Sprint Nextel spokeswoman Melinda Tiemeyer, the cable operators that offer Pivot service today "have the potential to resell WiMax service under the original JV agreement," although she added that there are no definitive plans to do so at this point.

But one large question looms: How big a pop will WiMax see out of the chute? For Schoolar, there are too many variables in play to predict whether WiMax will be a mass-market hit.

“It’s really a question of how Sprint and Clearwire will market and price this,” he said, adding that it’s not clear how many PC manufacturers will be interested in building Intel’s WiMax cards into 2008 laptop models.

“A lot of this is up in the air,” Schoolar said.