The key to Intel's domination
Published: 11 Aug 2004 12:35 BST
Preparing a PC to receive the "Wireless Connect" Wi-Fi bundle, also an option, requires that manufacturers specify a special version of the chipset's ICH6 controller chip, the ICH6W, which adds another few dollars to the chipset's price. Because it requires additional parts and compatibility testing, the Wi-Fi feature is the one that's not out yet.
"Arguably, Intel's practices reflect an assimilation of the lessons of the Microsoft case," said Mark Popofsky, a partner with the law firm Kaye Scholer in Washington, D.C. "A key teaching of Microsoft is that firms with substantial (PC) market power can avoid some legal problems by giving computer makers the freedom to decide what features to include in their machines. As long as (Intel is) giving the option not to take (Wireless Connect), then someone like Linksys can take a (different) product and potentially bundle it with a PC."
"If Intel has problems with its bundling practice, it likely has them, if at all, in Europe," Popofsky added.
Wireless is worryless
Despite the potential threat to their businesses, executives at chipmaker Atheros and Wi-Fi gear makers Linksys and NetGear insist their markets can support many companies and that Intel's efforts will ultimately benefit them all by making consumers more aware of wireless.
"Certainly (Intel) is an alternative for customers," said Patrick Lo, chief executive of NetGear. Intel "will certainly get a piece of the pie: people buying a new desktop. I think the pie is big enough that even with those customers gone there are still a lot more customers we can address".
NetGear and Linksys have been diversifying their product lines by creating higher-performance standalone Wi-Fi network gear for PCs, gateways (devices that are similar to routers but add more capabilities), and wireless adapters for printers, televisions, home stereos and other devices.
"They're going to have to do something," said Steve Baker, an analyst at NPD Techworld, "because even if they keep selling access points, their client business is going to go away -- every notebook is going to have a Wi-Fi adaptor preinstalled and if (Wireless Connect) happens, at a minimum it would take away a chunk of their add-in board business as well." That said, however, Baker added that "all of those guys are pretty smart. They see (products such as Wireless Connect) coming, and they're going to work around it and have products that allow them to stay relevant without getting wiped out by the PC."
Though the Wi-Fi companies seem unafraid, history shows several examples of businesses that were invaded by raiders wielding chipsets.
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