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Intel Banks on Centrino Processor System to Tap WiFi Phenomenon
Apr 21, 2003 (The Seattle Times - Knight Ridder/Tribune Business News via COMTEX) -- Intel may have arrived late to the Wi-Fi party, but it's buying drinks all around, trying to convince revelers the bigger bar down the street is nicer, if a bit more conventional looking.
Last month, the chip-making giant launched Centrino, its first processor system designed from the get-go for laptops.
The trade press is enthusiastic over laptops using Centrino chips, hailing the system as the best combination so far of weight, performance, price and battery life.
Previous laptops used chips reformulated from desktop models, and which suffered from all of the compromises that come from squeezing a 30-pound sack of goods into a 5-pound box. Oddly, Intel doesn't emphasize those technological achievements.
Intel has instead opted to spend $300 million for ads that feature a single word -- "unwired" -- in large type. The company even snapped up most of the advertising in a special issue of Wired Magazine -- called, appropriately, the "Unwired" issue.
The Centrino system includes a plain wireless networking module that uses the industry standard 802.11b, or Wi-Fi protocol, to exchange data at up to 11 megabits per second.
There's nothing unique about Intel's version, which is similar to a system Apple rolled out in 1999. Nor is there much profit in selling Wi-Fi "radios," or adapters, say analysts, because the cost of the components has fallen.
Gartner Dataquest estimates 10 percent of all laptops shipped in 2002 contained wireless modules, with that number expected to rise to 31 percent by 2004, representing at least 10 million laptops.
Laptops are becoming "unwired" at this rate partly because of an increasing web of "hot spot" locations that offer high-speed Wi-Fi access for a fee. As part of the unwired campaign, Intel is sending scores of technicians worldwide to such venues as Borders, McDonald's and Starbucks outlets to certify that Wi-Fi connections in those locations work flawlessly and reliably with Centrino.
Hot spots typically charge from a few dollars an hour to $50 a month for unlimited use.
Intel partnered with IBM and AT&T last year to form Cometa Networks, a company that plans to build 20,000 hot spots by 2004 aimed primarily at business customers.
By hopping on the hot-pot bandwagon, Intel seems to be turning its "Intel Inside" slogan inside out. Intel wants the Centrino name to become synonymous with ubiquitous, fast, easy connectivity using hot-spot technology or third-generation (3G) cellular data networks of the future.
Call it "Intel Everywhere."
To that end, Intel is imposing strict Centrino requirements for computer makers. To use the Centrino brand name, a laptop must include a Pentium-M processor, a set of chips for USB and battery management and the Intel wireless module. Any less, and it's "just" a Pentium-M model -- and the laptop makers lose out on their chunk of that $300 million fund for marketing and advertising.
The Centrino campaign may help Intel forestall laptop makers from creating their own wireless packages using non-Intel equipment. That could make Intel the market leader in future wireless connections via laptops.
Sarah Kim, an analyst with The Yankee Group, said Intel is providing the processor with the wireless system included, so that it doesn't seem like buyers pay extra for it.
Intel's approach may motivate laptop makers, but consumers and business users are already interested in wireless. The company had to provide them with a different kind of promise.
Intel wasn't first to market, so it focused on the user experience, assuring a Centrino laptop will simply and consistently make wireless connections.
Intel said that when its engineers checked out hot spots, they helped operators solve numerous problems that would have prevented Centrino and non-Centrino users from making a seamless connection.
"The goal down the line is to always have a consistent connection," said Christine Vermes, an Intel spokeswoman.
Hot-spot networks stand to gain enormous credibility by putting Intel's name alongside their own. Intel, in turn, will receive exposure at tens of thousands of venues. The benefit of a Centrino logo on the window of every Wi-Fi-equipped Starbucks is likely incalculable.
In the near term, Intel hopes the Centrino branding program and its support of hot spots increases the number of places wireless can be used for a fee -- which now number about 4,000 in the United States.
"I think we've done more to fuel the market for wireless, whether it's Intel's wireless or somebody else's wireless, than any other company in the last 10 years," said Don McDonald, Intel's worldwide director of marketing for mobile computers.
McDonald said the company wants to become more involved in "convergence between computing and communication."
This includes working with cellular data, including future high-speed networks using increasingly advanced data-transfer technologies. "What we're starting today is just the first step of a journey that's going to take several years to get under way," McDonald said.
Intel's approach gives it a Trojan Horse advantage without the subterfuge. By associating its wireless vision with a soon-to-be familiar name -- Centrino -- the company hopes it will be at the front lines of any future wireless data revolution.


By Glenn Fleishman
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(c) 2003, The Seattle Times. Distributed by Knight Ridder/Tribune Business News.
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