WiMAX: It's Wi-Fi -- to the max!
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1 Sunday, January 14, 2007 MIKE ROGOWAY The Oregonian WiMAX: It's Wi-Fi -- to the max! At a rented house in a Hillsboro neighborhood, engineers from Intel, Motorola and a Seattle-area startup, Clearwire, are quietly testing the next generation in wireless communication. It s called WiMAX, and Intel hopes the technology will help change both the way people use the Internet and the way the company does business. By promoting a new technology to make the Web more readily accessible, Intel hopes to become less dependent on the increasingly competitive microprocessor business. WiMAX expands the reach of popular Wi-Fi technology which extends a few hundred feet to several miles, creating Web access that goes wherever you do. Intel envisions duplicating the success of its Centrino Wi-Fi technology on a much grander scale, so your laptop, handheld device or other wired gadgets could connect to the Internet almost everywhere in the country. Eventually, Intel hopes WiMAX coverage will be as universal as cell phone service is today. Washington County is at the nexus of WiMAX development work at Intel, the state s largest private employer. If the mobile technology takes off, the Portland area could be among the first places in the country where it's deployed commercially. Intel has a poor track record with communications investments, and some analysts are skeptical that WiMAX will provide a compelling alternative to Web connections based on cell phone technology. Yet even as Intel slashes expenses and eliminates jobs at other parts of the company, it is ratcheting up its WiMAX investment. Last year, it committed $600 million to fund WiMAX specialist Clearwire in hopes of seeding interest in the technology. It was the biggest venture investment in Intel's history and an indication of the company's lofty expectations. At this time, if we' e to make a bet like this, that should be an indication that we're bloody serious about it, said Sriram Viswanathan, director of Intel s WiMAX development and vice president of the company s investment arm, Intel Capital. WiMAX, formally Worldwide Interoperability for Microwave Access, is a wireless standard supported by several large technology equipment companies but ignored by most cell phone carriers, which route Web traffic to cell phones, laptops and other portable devices using a variety of increasingly advanced cellular technologies. WiMAX comes in two flavors, fixed and mobile. The fixed service already is available in many parts of the country, including Eugene, Medford, Bend and the Puget Sound area, all served by Clearwire. Fast Internet connections are beamed wirelessly to boxes little bigger than a cable modem in homes and offices, creating an alternative to cable or DSL Web access. Technology experts and Intel agree, though, that the success of WiMAX ultimately depends on making it mobile. The engineers in Hillsboro are testing a version that fits on a computer chip
2 the size of a postage stamp, which Intel expects will be bundled into laptop computers alongside its Centrino Wi-Fi chip as soon as next year. Though Intel has been dabbling in WiMAX for a few years, 2006 marked a turning point in important ways. A month after its big investment in Clearwire last July, Intel helped persuade cell phone carrier Sprint Nextel Corp. to adopt the technology as a complement to its cell phone service. Internationally, several other companies also began major deployments. More range, more cost WiMAX networks will extend beyond city boundaries and provide more dependable coverage than free Wi-Fi networks of the kind now under development in Portland. Intel envisions a big brother, little brother relationship between the technologies, with WiMAX delivering more robust service over wider areas though generally at a higher price. Wi-Fi broadcasts low-power, local signals that use a free, unlicensed spectrum. It therefore doesn't cost much for a coffee shop, for example, to offer a free Wi-Fi connection to customers. WiMAX broadcasts a much more powerful signal, but doing so requires a licensed radio spectrum and expensive federal licenses that boost the cost of service. Cell phone networks also use a pricey licensed spectrum, but have a head start because those technologies already are widely deployed. Intel says cellular carriers array of systems are too expensive and too slow for Web surfing, especially as new video technologies take off. With WiMAX, Intel hopes to promote a universal standard that performs better because it was designed from the beginning to suit Web traffic. Intel s WiMAX development work grew out of prior Wi-Fi research in Hillsboro, which made Oregon a natural place for it to test the new mobile technology. Additionally, the region s hilly, forested terrain creates a challenging environment: If it works here, Intel says, it s likely to work almost anywhere. Engineers set up a lab in a house not because it was cozy it s furnished just with card tables, folding chairs and laptops but because they wanted a real-world environment to gauge the performance of the sensitive technology. With a wireless system, the air changes. A truck drives by and your performance changes, said Chris Knudsen, chief technology officer for Intel s WiMAX division, who is overseeing the test. If all goes well, later this year Intel will expand its initial trials by sending WiMAX chips home with about 4,000 of its 16,000 Oregon employees. In 2008, mobile service could be available to the general public. Prices haven t been set, but cell phone companies currently charge between $50 and $100 a month for their Web packages. Hoping it sells The open question is who, if anyone, will want WiMAX. To date, the fixed service has proved most popular in rural areas such as Eastern and Southern Oregon, where DSL and cable service are either unavailable or expensive. Clearwire, founded by Seattle cell phone baron Craig McCaw, offers Web access at prices ($38 a month) and speeds (1.5 megabits a second) comparable to urban DSL. 2
3 With mobile WiMAX, Intel is aiming for a sweet spot between Wi-Fi and cell phone networks, promising a technology as convenient as the former with the broad geographic range of the latter. In Intel s conception, it works like this: Your laptop, handheld computer or other mobile devices would come stocked with both Wi-Fi and WiMAX chips from Intel. Computers would connect to Wi-Fi in areas where that service is available, because it s generally faster, and sometimes free. If your computer or gadget couldn t find a Wi-Fi connection, it would instead look for a WiMAX network that you have already subscribed to. WiMAX carriers also might offer onetime connection fees for people who aren t subscribers. Intel scored a surprising coup last year when Sprint announced it will adopt WiMAX as a standard for new data services, giving the technology a foothold among cellular carriers that previously had been wedded to their proprietary technologies. Challenges ahead With WiMAX, Intel is seeking to shake up the wireless establishment and create a whole new business model, according to Michael Cai, a senior analyst with the technology research firm Parks Associates. It has an opportunity to build a disruptive business model, Cai said. However, Cai said WiMAX must first demonstrate that its mobile technology works, then somehow dislodge existing technologies and new ones cell phone companies have on the drawing board. They do face a lot of challenges, Cai said. Sprint was a natural candidate for WiMAX, he said, because the carrier owns a wireless spectrum compatible with WiMAX uses. Other telecommunications companies, such as AT&T Corp. (which owns Cingular Wireless) and Verizon Communications Inc. might resist WiMAX, he said, because it could compete with their DSL Internet service. It s hard for me to see a lot of the mobile cellular service providers doing what Sprint is doing, Cai said. Though WiMAX does appear to have some technical advantages over proprietary cell networks, Cai said, cell phone networks generally can catch up in speed and cost within a year or two. It seems whatever WiMAX can do, the cellular technologies can do as well, Cai said. To Daryl Schoolar, senior analyst with the technology research firm InStat, the big question with WiMAX is whether it will be useful enough that people will want to pay for the service. I've got a laptop at home. I don't generally think about taking it out to the mall with me, Schoolar said. WiMAX will need to find some compelling new product perhaps some kind of portable Web surfing device, or mobile video game to really take off, he said. It would have to be something that distinguishes itself from what s out there today, Schoolar said. 3
4 Intel makes no effort to hide its rocky track record in wireless communications equipment. Last June, Intel agreed to sell a division making processors for handheld computers, a holdover from the 1990s when Intel tried unsuccessfully to expand from its core business of making computer processors into the fast-growing communications market. It's a well-known fact that our forays in the communications business in the past 10 years have been suboptimal for us, said Viswanathan, Intel s WiMAX director. We had a lot of failures at that time. In the past, Intel thought its success in microprocessors would be enough to persuade hardware manufacturers to start using its communications chips, Viswanathan said. This time, he said, Intel is paying closer attention to what its customers say. With WiMAX, he said, the company has a strong technology that will free companies from expensive proprietary systems. We sort of learned our lesson the second time around in dealing with the communications industry, Viswanathan said. Mike Rogoway: ; mikerogoway@news.oregonian.com; siliconforest.blogs.oregonlive.com 2007 The Oregonian 4
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