Wi-Fi successor is called high-speed hype — for now

At virtually every turn, Intel Corp. executives are heaping praise on an emerging long-range wireless technology known as WiMAX, which can blanket entire cities with high-speed Internet access.

By Reuters

http://www.boston.com/business/technology/articles/2004/10/18/wi_fi_successor_is_called_high_speed_hype____for_now/

Just as Intel helped popularize Wi-Fi, a short-range technology now widely used in airports and in coffee shops, the world’s largest chip maker hopes to usher in the "WiMAX era" — using the technology to displace cable and DSL Internet access and segments of the cellular phone market.

Yet as it heads into turf fiercely protected by the telecommunications and cable industries, WiMAX is likely to gain little traction, at least for several years, analysts said. The demand it does find may come mainly from rural markets outside the United States.

Market research firm iSuppli today issued a report describing a largely lackluster outlook for WiMAX, which it said is surrounded by hype and will likely fail to catch on beyond niche applications. Established broadband access providers see no reason to adopt yet another technology for delivering data at high speeds, the company said.

Industry-wide demand for WiMAX equipment will not top $1 billion until 2007, iSuppli’s forecast found. Divided up among many industry players, that amount might barely register at a company like Intel, which reported $30 billion in revenue last year. By 2009, the market will reach only $2.5 billion, iSuppli predicted.

Intel, based in Santa Clara, Calif., is scheduled to report its quarterly earnings tomorrow afternoon.

"These applications will not be large enough to sustain the multitude of silicon suppliers and equipment manufacturers who have expressed interest in developing products for WiMAX," iSuppli said. "The hype surrounding WiMAX . . . as a fixed wireless access technology will remain just that — hype."

Such skepticism has not stopped Intel, Fujitsu Ltd., and Alcatel from investing heavily in WiMAX and promoting it as a logical competitor to DSL and cable Internet access.

In March, Intel and Alcatel announced a "strategic alliance" to develop WiMAX equipment by the second half of next year. The US chip unit of Japan’s Fujitsu plans to introduce its own chips for WiMAX early in 2005.

These companies and others envision WiMAX equipment installed outside homes and business, linking up with a base station hosted by fixed-line telecommunications operators. A short-range, Wi-Fi signal, or perhaps an ethernet cable, would bring the Internet to individual PCs in the home.

© Copyright 2004 Globe Newspaper Company.