Intel's WiMax: Like Wi-Fi On Steroids

The chipmaker's ultrafast technology could transform the broadband landscape

When Hollywood digerati took in the documentary Rize at the Sundance Film Festival in late January, they got a glimpse of the future. The movie, about dancers from the mean streets of Los Angeles, was streamed wirelessly to a mountaintop ski lodge from an Intel Corp. (INTC ) server 12 miles away. The technology behind the public-relations stunt: Intel's much-promoted WiMax -- a kind of Wi-Fi on steroids. As the documentary flickered across a big screen, the impressive feat of seamlessly delivering gobs of compressed data over the air wowed the audience nearly as much as the movie did.

Intel is gearing up for WiMax' world premiere. As early as Apr. 18, the company will start turning out a new generation of chips that it hopes will turn WiMax into the Next Big Thing in the wireless Web. Thanks to Intel's outsize market power, analysts expect a range of WiMax services to spring up over the next few years, offered by everyone from biggies such as SBC Communications (SBC ) and Comcast to minnows such as Clearwire Technologies, founded in 1998 by cellular pioneer Craig C. McCaw. If WiMax takes off, it could transform broadband by bringing high-speed service to millions more people around the globe, allowing Web surfers to roam at will and cutting subscription rates as new players pile into the market. Says Intel Executive Vice-President Sean M. Maloney: "People have moved from disbelief and skepticism about the technology to being intrigued about its prospects."

Since the late '90s, techies have dreamed of beaming high-speed Internet over the airwaves. Several companies attempted to launch precursors to WiMax but never got off the ground. The infrastructure was too costly, and the competing technologies suffered a lack of common standards.

Now along comes Intel, which aims to duplicate its successful Wi-Fi strategy. In 2003 the chipmaker rolled out its Centrino line of Wi-Fi chips, a move that helped bring the wireless home network to tens of millions. In that case, Intel used its market clout to convince its core customers -- PC makers -- to adopt Centrino as a standard.

With WiMax, Intel has had no such advantage. It had to bring on board telecom companies, which aren't traditionally Intel customers: They're the ones who will sell the service. So the chipmaker created a WiMax forum with such heavyweights as SBC, Sprint, and Nokia to hammer out common standards for its chips. To start with, WiMax, which Intel says will be up to six times faster than existing broadband service in the U.S., will be used to bring high-speed Internet to homes and businesses that lack service. But in a couple of years, WiMax will go mobile, allowing people to download movies, games, and other content without being tethered to a local hot spot, as Wi-Fi requires.

Having developed the WiMax standard, Intel seems to have stolen a march on rivals like Fujitsu. The early lead could win the Santa Clara (Calif.) chipmaker the lion's share of a market that could be worth $20 billion by 2015, according to communications analyst Erik Zamkoff of Independent Research Group. Moreover, Intel's planned rollout of combination Wi-Fi/WiMax chips in 2007 will likely spur consumer and business upgrades of everything from notebooks, tablets, and other mobile devices to routers -- all of which could contain other Intel processors and memory chips.

HELP FOR UPSTARTS

For consumers, WiMax could shake up the broadband world by helping to eliminate the cable and DSL duopoly that dominates the market. That could lead to lower prices and higher speeds. Upstarts could use WiMax to break cheaply into incumbents' markets. Clearwire, for example, has introduced a precursor to WiMax in four cities in Florida, Texas, and Minnesota, and hopes to use Intel's technology to add 16 more cities by yearend. (see table, "WiMax Poised for Take-Off")

Big players will be able to enter each other's territories, too. For example, in February a Verizon Communications Inc. (VZ ) subsidiary, Verizon Avenue, began offering a WiMax-like service in Monterey, Calif., a market currently served by rival SBC. Time Warner Inc. (TWX ), Comcast Corp. (CMCSA ), and other cable providers could make use of WiMax to deliver content outside the home. That would provide competition for cellular providers, some of which also aim to sell WiMax services alongside existing high-speed mobile networks.

However fierce the new round of competition WiMax sets off, consumers are likely to enjoy it.

By Cliff Edwards in San Mateo, Calif.

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