Rumors are swirling around the analyst community that Intel is losing its patience, and money, with WiMAX. Some believe that it is looking to pull the plug on its involvement as it has done with other wireless initiatives. Now comes a statement by Sean Maloney, Executive Vice President, General Manager for Sales and Marketing, that LTE and WiMAX should be combined into a common 4G standard. While he is not the first one to suggest this--it was suggested by Arun Sarin, CEO of Vodafone more than a year ago--it is clear to me that this is the beginning of Intel's exit strategy for WiMAX. Once again, an industry that has grown up around Intel is likely to be stepped on as Intel heads for high ground.
Maloney makes a couple of statements that need to be addressed. The first is that WiMAX and LTE are 80 percent the same but WiMAX is a few years ahead of LTE, and the second is that customers will be confused by competing 4G technologies.
Let's look at these statements in reverse order. First, we have had 2G and 3G competing technologies for many years and the industry has not confused anyone. And, I maintain, because we have had these competing technologies, we have lower service pricing, a more competitive landscape that has resulted in faster data speeds on both sides and substantially lower handset prices.
If the entire world had been using one 2G and one 3G standard, I am not sure we would be as far advanced as we are. And the companies that develop chipsets (I thought Intel did that, too) have been really good at turning out chipsets that support all of the various 2G and 3G technologies, on all of the major spectrum allocations around the world. For the most part, these chipsets are selling at very reasonable prices that will continue to decline.
Second, Maloney is forgetting about another 4G technology: UMB. UMB was developed by the 3GPP2 and Qualcomm--it was supposed to be the 4G road for the CDMA community. However, Verizon Wireless has opted for LTE, which means UMB will probably not be a factor. BUT--from what I understand--UMB is further along in its development than either LTE or next-generation WiMAX and until Intel raised its hand I would have said that LTE and UMB would probably come together into a common standard.
Now Intel has announced that it is getting back into the wireless mobile device chipset business after selling off its last effort in chips and not concluding its initial deal with Nokia. At the same time, it is sending up this trial balloon about combining WiMAX and LTE.
When I first talked with Intel about CDMA and GSM/UMTS, its representatives did not want to have to pay intellectual property fees to the "owners" of the technologies and therefore embarked on the WiMAX path. Now WiMAX, it turns out, will not be IP-free and Intel has a huge investment in a technology that is being built only in greenfield (meaning new) networks. WiMAX has not been included in anyone's migration path from 3G UMTS or CDMA.
Sprint is basically saying it will let Clearwire take over the burden of launching the WiMAX network and getting the devices to run on the network. But Sprint is keeping the voice and EV-DO traffic while the WiMAX network is being built out so it can get back to trying to save its core business.
The CEO of Intel seems to think is it easier to add wireless to a computer than to add a computer to a wireless device. Well, perhaps a few years ago that was true. But today we already have a number of very successful devices on the market--RIM's BlackBerry, phones using Microsoft Mobile Windows 6.0, Palm Treos and Nokia high-end phones (which the company calls wireless computers)--all coming from the wireless world with more exciting things on the way. This is just the beginning. Now there will be mobile processors in the market that will provide all the power new mobile devices will need and all the wireless connectivity they can fit in before anything Intel can produce and, I suspect, at lower power than Intel's first new offerings.
So Intel is beginning to make the move I thought it would. How will it exit the WiMAX marketplace gracefully and join the rest of the wireless world as it continues to grow? The answer, of course, is to champion the "merger" of WiMAX and LTE for the "good of the industry" and so we won't confuse the customers (who don't care about the technology anyway).
Can Intel thrive and survive in wireless when it is using the same technologies as the rest of the world and not promoting something different? Can its chips designed for handheld wireless computing devices compete with what is coming from the wireless industry? Time will tell of course, but Intel will have to horse trade some of its own IP in order to be able to develop LTE products or it will have to pay, just like every other chip maker. That is a fact of life in the industry.
Intel certainly wants to get into the wireless business, but so far it appears as though the master of PC processors has not mastered the wireless landscape and is still flailing around trying to figure out how to make its presence felt.
I don't feel the least bit sorry for Intel, but I do feel very sorry for the WiMAX community that was in place prior to Intel's entry and that grew up around Intel's support of the WiMAX technology. Many of these companies invested a lot of time and money because they believed that following Intel could only ensure their success. I wonder how they are feeling today, after Intel's latest round of comments.
Andrew Seybold is an authority on technology and trends shaping the world of wireless mobility. A respected analyst, consultant, commentator, author and active participant in industry trade organizations, his views have influenced strategies and shaped initiatives for telecom, mobile computing and wireless industry leaders worldwide.