Intel invests in WiMax again amid doubts

Intel's investment arm has put another chunk of change into WiMax, a wireless technology that has not lived up to its billing as the successor to Wi-Fi.

This time Intel Capital has sunk $3 million into the start-up Aicent with the hope of accelerating the wireless technology's adoption.

Aicent provides data network, messaging, and roaming solutions for GSM
and CDMA mobile operators and operates one of the world's first and largest multimedia messaging exchanges, according to an Aicent statement.

In an interview, Ranjeet Alexis, senior director at Intel Capital, said that Aicent excels in "roaming exchange" technology--"Where different carriers can connect to other carriers," according to Alexis.

"They create this hub and different carriers can connect to the hub. If a carrier, let's say, in Africa or Latin America or India, wants to connect into China Mobile, they don't have to directly go to China Mobile," Alexis said. "They can connect to the hub, which, in turn, connects to China Mobile."


Alexis said that WiMax operators could access this hub and connect across different carriers running different wireless technologies.

An interesting concept, except WiMax is still trying to find a foothold after being launched back in 2001 by the WiMax Forum. Not that money has been an obstacle. Intel is a major backer of WiMax along with Nokia and Motorola. The world's largest chipmaker has invested $600 million in Clearwire. That investment is part of $900 million in joint financing of Clearwire with Motorola.

Sprint Nextel and Clearwire, in turn, have allocated $5 billion for a WiMax build-out by 2010, and Intel CEO Paul Otellini has proclaimed that 750 million people will be covered by WiMax in 2010 and 1.3 billion by 2012. WiMax is like Wi-Fi, but offers much broader coverage.

Gartner analyst Ken Dulaney, however, is not keen on WiMax's chances. Dulaney says it has potential in developing countries where there is little wired infrastructure. "There, it makes a lot of sense," he said. But less so in developed countries, where, as a pure mobile technology, it is problematic.

"It's semi-mobile, which means you pretty much have to stay in one place while you're using (WiMax)," Dulaney said. "There were supposed to be mobile phones out from Motorola and Samsung but those haven't appeared."

"So, we would say WiMax, as a (pure) mobile technology, has underperformed and doesn't have much potential there." And WiMax will have trouble going head-to-head with cell phone giants like Verizon, he said. "It's going to pale in comparison to Verizon who's committed to LTE. AT&T and T-Mobile all are also committed to LTE." (LTE stands for Long-Term Evolution.)

"That leaves Sprint as sort of a wireless orphan," Dulaney said, referring to the fact that Sprint is stuck with WiMax.

"Most likely what you're going to see is that Intel is going to throw a lot of money at getting laptop manufacturers to put WiMax into their laptops," he said, with the hope that users will select WiMax over Wi-Fi.

Intel also has plans to push WiMax for its handheld mobile Internet devices.

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