Intel's most-far-reaching investments will let people do videoconferencing, play games, and even watch movies via their cell phones. The missing ingredient in these applications is processors that can send and receive large data files without sacrificing battery life. No small task. Tomorrow's cell phones will have to receive data 20 or more times faster than today's phones and do so at today's prices.
Intel relishes the role of innovator and standards bearer. "What we're doing in the future is going to have an impact on a significant number of people," says Frank Spindler, a VP in Intel's corporate technology group.
Still, Intel is smart enough to understand that it can't succeed by itself. Which is why it provides comprehensive product road maps twice each year at its Developer's Forums to help equipment makers and software developers prepare the systems needed to distri- bute Intel's technology. "If those industry partners aren't ready to sell our technology, we can't move forward," Spindler says.
One area where Intel has exerted tremendous influence is in wireless computing. By adding wireless capabilities to notebook computers with its Centrino chipset, Intel gave consumers and businesses a new reason to buy. "Centrino represented an opportunity to drive a market," Otellini says.
The company is a firm believer that computing and communications infrastructures will continue to merge. This is the foundation of its Centrino initiative, which packages a low-power Pentium M chip with a chipset and 802.11-compatible wireless networking capabilities to make mobile computing easier. To spur Centrino's adoption, Intel invested in the wireless-hot-spot technology and certified hot-spots offered by service providers to make it easier for users to get online. When Centrino was launched a year ago, there were fewer than 4,000 hot-spots worldwide; research firm IDC last year predicted that number will grow to 118,000 by 2005.
"All computing devices will communicate, and all communication devices will compute," VP Chandrasekher predicts.
Photo by Angie Wyant
Intel designed Centrino to enable mobile communications based upon things users care most about: performance, form factor, battery life, and connectivity. Most of what Intel did in 2003 focused on business users, but this year, the company will refresh Centrino to focus on consumers.
While Centrino technology is present in most new notebooks, other efforts haven't worked out as well. Businesses have been slow to adopt the 64-bit Itanium chip. And in December, Intel said it would take a $600 million fourth-quarter write-off related to its Wireless Communications and Computing Group. Formed largely from Intel's $1.6 billion purchase in 1999 of DSP Communications Inc., a supplier of chipsets, reference designs, software, and other technologies for wireless handsets, some of the wireless group's products took longer to develop than expected, which prevented Intel from getting the sales it wanted. A week after announcing the write-off, Intel folded that business into its Communications Group.
The wireless group's losses increased to $432 million in 2003 from $287 million a year earlier. But the Communications Group managed to cut its losses by nearly $200 million between 2002 and 2003, largely on the strength of the Centrino wireless networking technology. Sean Maloney, executive VP and general manager of the newly combined Communications Group, is confident that Intel can turn things around. "One hundred percent of the action is in the communications space today," he says. "That's where the technology challenges are, and Intel has been forced to take communications seriously."
Intel hopes wireless will follow the pattern of PC chips. Intel's ability to steadily increase the speed of chips led to PCs being able to handle more-complicated and -sophisticated applications, which made them the essential tool of knowledge workers around the world. So Intel is working with other vendors to increase the ability of Wi-Fi technology to handle faster data speeds. The WiMax Forum, which also includes AT&T and Fujitsu, is dedicated to creating global standards for broadband wireless products. But WiMax, which is expected to offer speeds of as much as 70 Mbps for distances of up to 31 miles, will be challenged in ways Wi-Fi wasn't.
"It's a killer technology, but it will have competition, obviously," says Barrett, citing high-speed data services over cable TV and DSL. However, WiMax is wireless, a key advantage for a mobile society. Adoption will come down to how it's priced and how long it takes to become a reliable service, Barrett says.