Editor's Corner

Intel Capital's $600-million infusion into Clearwire, the largest single investment Intel Capital has made to date, demonstrates how high the stakes are for Intel and its quest to see WiMAX succeed. The company has led standards bodies, built chips, funded early network development and pumped a lot of money into WiMAX vendors and operators to make sure this technology has a global footprint. 

The hope is that computer manufacturers will see that WiMAX is big enough to incorporate the technology into laptops, thus increasing the demand for Centrino chipsets. But first, it needs to have some big network operators actually committed to mobile WiMAX so that they can drive interest in WiMAX-enabled laptops. Clearwire, the second largest 2.5 GHz license holder in the U.S., is a first step, but there's a lot of work to be done. For starters, Clearwire has a lot of work to do to convert its proprietary wireless broadband network to WiMAX as well as grow the footprint. And it needs to grow its customer base by a significant amount. Clearwire revealed that in the first quarter, it had about 20,000 new users across 27 U.S. markets and even less in Europe, and it doesn't differentiate itself much from the DSL or cable offerings that are out there. An actual mobile WiMAX system appears to be a ways off as key parts of the standard--like seamless hand offs--haven't even been developed yet. At this point, 802.16e is a fixed system with some portability.

Intel is hoping, aka trying to ensure through its massive investments, that WiMAX will replace the popularity of WiFi, a market it doesn't own. With WiFi, anyone can set up a hotspot. WiMAX requires the buy-in from network operators. Can one company single-handedly make sure that operators launch WiMAX technology on the fast track with a significant footprint and bring forth offerings that are compelling enough to spur people to buy laptops with WiMAX in them? Intel Capital, the largest VC firm in the world, is certainly committed to throwing its virtually unlimited funds to make sure that happens. Will it ever see a decent payback? -Lynnette