3G beyond the handset

A couple of years back, just when the performance of computer chips seemed to be getting to the limit of the so-called Moore's Law, Intel CTO Pat Gelsinger had the tough job of outlining the company's strategy to keep up with the Law's pace of innovation going forward.

Gelsinger opened his session at the company's annual developers' forum with a host of technical briefs showing that Intel would indeed be able to keep pace with Moore's prediction, at least for another couple of generation of chips.

At the same time, however, he added that Moore's Law, interpreted as a value for performance and functionality, as opposed to pure processing power, will hold true for at least another decade or so.

His explanation was that Intel will not only make its chips faster by cramming more transistors on a piece of silicon, but will start to add new functions to the chips that will dramatically expand the capabilities of computers. He was, of course, talking about the company's Centrino chip platform for laptop computers, which integrated wireless LAN into the company's core chip platform.

Anyone who pays any attention to the IT sector or who has looked to buy a laptop computer in the last two years or so will tell you, Centrino has become as ubiquitous as Intel's original Pentium chips. It is pretty difficult these days to find a mainstream computer that doesn't come with the Centrino platform. And even laptops from competing chipmakers such as AMD will inevitably come with wireless LAN built in.

The funny thing is that wireless LANs never really took off, at least not commercially. Sure everyone is building wireless LANs at home and many establishments have installed access points. But wireless LAN as a core (profitable) business is still very much in doubt. In other words, Centrino made wireless LAN popular, but it really didn't change the world per se.

Well, the punch line to this drawn out introduction is that Intel is now looking to extend the features and functionality of its chips through a technology that already generates billions and billions of dollars.

Rocking the 3G boat

Last month in Barcelona, Intel signed an agreement with the GSMA to integrate 3G connectivity into its laptop platform. The idea is to set a standard that encourages all laptop makers to integrate first, a SIM card reader, and second, a 3G radio into their products.

Already Fujitsu Siemens has released such a product, although there is no evidence that it is based on the Intel/GSMA platform. Nevertheless, given the clout of Intel and the success it has had with the Centrino platform, it is pretty easy to assume that 3G will be coming to a laptop near you.

So what‾ Laptops are surely not going to replace mobile phones, so handset makers won't really have to worry about losing sales to Intel-powered 3G laptops. 3G operators won't really have to worry either because laptop users on 3G is heaven-sent since they will undoubtedly use lots of air-time, which is still charged by volume.

What is really important - and few people have talked about - is that having the majority of laptop computers equipped to access 3G networks is a huge potential market for the mobile industry.

 

The problem of course is that the mobile industry has no business model to accommodate and take advantage of.

On the one hand, operators can charge at the same rate as today, which would discourage most 3G laptop users since the rates are so high. On the other hand, they can't lower the price too much because it would kill their margin for conventional 3G services from mobile phones.

Besides, most 3G networks are not equipped, or provisioned, to handle a vast amount of traffic without impacting the performance of the network.

Basically, having hundreds of millions of laptop users with 3G access is like throwing a monkey wrench into an industry that is still struggling to figure out how to make money out of their 3G networks.

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