Intel dismisses WiMAX Program Office

As has been reported in my infonugget WiMAX/WiBro <=>
TD-LTE and LTE in general
Intel’s WiMAX initiative started in 2006 is not bringing the yields once hoped by chip giant.

As a result of that the Taiwanese DigiTimes has just reported an internal Intel announcement that Intel backs off WiMAX industry, dismisses WiMAX Program Office, say sources. Intel’s Taiwanese partners haven’t got any information from Intel yet and hope that this will not end the cooperation which started years ago.

Industry executives estimated MediaTek Inc. would likely become the world`s No.1 supplier of WiMAX chips in the second half of 2011 thanks to the unmatched strength of Taiwan`s networking-communications equipment industry, which has filled 80-90% of the world demands.

The projections arise at a time when Intel Corp., the foremost engineer behind WiMAX trend, exits the market because of low acceptance of its embedded WiMAX modules for laptops. Industry executives felt MediaTek would likely fill up the vacancy left by Intel in WiMAX.

[But WiMAX is, certainly, not the only bet for Mediatek: MediaTek, NTT DoCoMo Partner on LTE Mobile Tech [July 28]]

… affected by the WiMAX industry’s uncertainty in the future, executives and technicians of the company’s WiMAX department have started leaving and the business is generating monthly losses of NT$10 million for the company. …

[despite clarifications by Intel, as described in the update well below] Intel’s partners in Taiwan remain concerned whether Intel will continue to support WiMAX and fulfill promises made in an MOU signed with the Taiwan government …

… The move has also upset the government seriously, which has been cooperating closely with Intel in pushing investments in WiMAX technology. The Taiwanese government and industries have reportedly requested Intel to make three commitments, including transference of patented WiMAX technology and IOT (interoperability test) solution to Taiwan, signing of a letter of intent for cooperation with Taiwan, and maintenance of its Asia-Pacific WiMAX office or institution of a new unit dedicated to WiMAX business. …
… Industry insiders noted that the retreat from the WiMAX camp will jeopardize the trust of Taiwan in its long-standing cooperative link with Intel. Huang Chung-chiu, vice economics minister, however, noted that even if Intel decides to quit, the Taiwanese WiMAX industry will remain intact, since it has established a complete supply chain.

… Among advanced wireless broadband access technology standards, WiMAX is the best in terms of maturity of technological development and application and is expected to share 20-25% of the global market of wireless communications in the future, MOEA indicated. …

… The five WiMAX operators expressed a consensus that WiMAX has taken a considerable lead in technological development over its rival LTE (Long Term Evolution) whose development is not mature yet.

Far EasTone Telecommunications, the only WiMAX operator not attending the press conference, issued a statement stressing its support of the government’s promotion of WiMAX and its intentions to continue expanding its WiMAX operation. But it said it will also watch the development of LTE to assess the possibility of integrating the two standards.

But keep in mind: China Mobile and Far EasTone Enter Into Share Subscription Agreement and Strategic Cooperation Agreement [April 29, 2009], China Mobile, Far Eastone Team For TD-LTE Wireless Trials [April 8] and Taiwan’s Far EasTone, China Mobile to Offer Games, Music on Mobile Phones [July 8]

… Far EasTone shareholders have approved the sale of a 12 percent stake to China Mobile, which in April last year agreed to pay NT$17.8 billion ($554 million) for the stake in the Taiwan phone company. The two carriers have said they are awaiting the easing of the Taiwan government’s restrictions on Chinese investment in the island’s communications industry to complete the transaction. …

That is coming sooner than later, see: Mainland investment in Taiwan set to rise [June 29], President Ma orders Legislature not to tinker with ECFA [July 1], Government commission to implement ECFA in September [July 13]

  • Update [July 7]: Intel’s Director, Product and Technology Media Relations, Global Communications Group, Bill Kirkos responded to that on Intel’s technology blog Backing Off 4G WiMAX? Hold Your Horses [July 1] with saying:

There has never been one single wireless standard out there, and WiMAX, LTE, 3G et al will all co-exist. And who knows, others will probably pop up, too, in the coming years. As we’ve said before, 4G WiMAX and LTE are very similar and Intel could support both technologies. …

As for the WiMAX Program Office. Intel forms program offices to help create, support and get a technology, standard (and/or new customer) into market as fast as possible. We have a handful of them around the corporation. By definition, these offices are temporary. And that’s what has happened in the case of WiMAX. That office was formed some four years ago, and in that time, the standard was complete; testing and full-scale deployments have happened (>500 worldwide); and heck, even a really popular phone among several other devices have hit the market. The standards group has even identified the next generation enhanced 802.16e specification.

So for us, the mission of getting WiMAX off the ground and in the market is accomplished. The folks working in the program office merely are being housed under our existing Intel business groups.

  • There has been another response as well from Nick Jacobs, Intel APAC Regional PR Group Manager as the following comment to the TechEYE’s Intel pulls out of WiMAX post [July 1]:

Digitimes applied more than their usual license to this one – yes, Intel is reorganizing its WiMAX Program Office (WPO) to better integrate WiMAX into its existing platform and product groups. However, this change is intended to put WiMAX-focused resources and expertise within the teams that can best commercialize WiMAX as it moves beyond start-up phase to a mature wireless technology. Today there are already more than 500 WiMAX networks in 147 countries bringing broadband to over 10 million people.

This evolution is a normal process that takes place as technologies mature and become a standard part of existing computing platforms. Intel remains committed to WiMAX.

FYI, Digitimes called us to ask about what they’d heard from “sources” and we told them just this – but somehow the truth wasn’t allowed to get in the way of a good story…

GigaOM’ conclusion: Intel’s WiMAX Office Closure Could Open Doors for TD-LTE [July 1].

This failure is quite significant since only the investment done through Intel Capital (i.e. not speaking of billions spent on chip development by the mother company) is by far the biggest part of the fund’s portfolio with not less than $1B put into an estimated $12B deal between Clearwire and Sprint where additional non-telecom companies (Comcast, Time Warner, Google) have put together $2.2B alone:
Clearwire Completes Transaction with Sprint Nextel and $3.2 Billion Investment to Launch 4G Mobile Internet Company [Dec 1, 2008]
– Combination of Sprint and Clearwire’s WiMAX Businesses with $3.2 Billion Cash Investment from Comcast, Intel, Time Warner Cable, Google, and Bright House Networks Creates New Opportunities for Next-Generation Services
Big Tech Firms to Invest in Wireless [May 7, 2008]
– Sprint, Comcast, Google, Time Warner and Intel Join Forces in New Broadband Joint Venture
Q&A: Intel Capital’s Arvind Sodhani explains Clearwire-Sprint deal [May 7, 2008]
Intel’s $600 Million Clearwire Investment Shows Its WiMax Commitment [July 6, 2006]
In Depth: Intel’s Chip Plans Give WiMax A Mighty Push Forward [July 3, 2006]

Considering Clearwire’s current market capitalisation of $6.9B the loss is quite evident. “As of December 26, 2009, our investment balance in Clearwire LLC was $261 million …” [see: Notes to Consolidated Financial Statements, 2009 Annual Report]. The current state of services is well described in this recent article:
Clearwire Expands 4G Wireless Service [June 28, 2010]
– Richmond, Va., Salt Lake City, and St. Louis join the growing list to receive WiMax Internet coverage from Sprint/Clearwire
Note: Originally WiMAX should have been capturing the 4G market well ahead of LTE because it is “two to three years ahead of any competing technology” (see the above Q&A). The stock market – however – had indicated as early as end of 2008 that ClearWire had much less business potential. “As a result of the year-end market price of Clearwire Corporation stock, Intel will impair the value of its investment, resulting in a non-cash charge to fourth-quarter earnings of approximately $950 million.” (see Intel Announces Preliminary Fourth-Quarter Financial Information [Jan 7, 2009]). Almost all of the original investment, and a year later that was just still $261 million in real value!

Intel Capital has also supported the WiMAX initiative worldwide by other, smaller investments targeted for accelerated deployment:
Intel, Taiwan Government to Establish Mobile Device Open Source Software Development Center [Oct 30, 2008], Intel Capital Intends to Invest NT$386 Million in VMAX for Mobile WiMAX
Intel Capital Makes RM50M Investment In Malaysia’s Green Packet To Advance WiMAX [May 19, 2008]
Intel Capital Invests US$8 Million in Innowireless to Accelerate Wimax Deployment [Nov 27, 2007]
Intel Capital and MCI have invested in Bulgarian WiMAX operator Nexcom [Sept 12, 2007]
Intel Capital Extends WiMAX Investments Worldwide [May 22, 2006]


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About Nacsa Sándor

Lazure Kft. • infokommunikációs felhő szakértés • high-tech marketing • elérhetőség: snacsa@live.com Okleveles villamos és automatizálási mérnök (1971) Munkahelyek: Microsoft, EMC, Compaq és Digital veterán. Korábban magyar cégek (GDS Szoftver, Computrend, SzáMOK, OLAJTERV). Jelenleg Lazure Kft. Amire szakmailag büszke vagyok (időrendben visszafelé): – Microsoft .NET 1.0 … .NET 3.5 és Visual Studio Team System bevezetések Magyarországon (2000 — 2008) – Digital Alpha technológia vezető adatközponti és vállalati szerver platformmá tétele (másokkal együttes csapat tagjaként) Magyarországon (1993 — 1998) – Koncepcionális modellezés (ma használatos elnevezéssel: domain-driven design) az objektum-orientált programozással kombinált módon (1985 — 1993) – Poszt-graduális képzés a miniszámítógépes szoftverfejlesztés, konkurrens (párhuzamos) programozás és más témákban (1973 — 1984) Az utóbbi időben általam művelt területek: ld. lazure2.wordpress.com (Experiencing the Cloud) – Predictive strategies based on the cyclical nature of the ICT development (also based on my previous findings during the period of 1978 — 1990) – User Experience Design for the Cloud – Marketing Communications based on the Cloud
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6 Responses to Intel dismisses WiMAX Program Office

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