August 1, 2002 12:00 PM PDT
Intel unplugs AnyPoint wireless line
The chipmaker felt the AnyPoint line, whose focus was on ease of install and setup, was made obsolete by Microsoft's Windows XP operating system, which automatically detects and sets up wireless networks, Intel spokesman Tom Potts said.
"It didn't make sense for us to stay in the retail market given that most of our value was taken away with XP," he said. After Windows XP shipped, "we felt we were now a commodity product. Buyers are now shopping on price and form factor. That's not typically a market that Intel is interested in."
But sales also likely had something to do with the decision. Analysts said Intel's AnyPoint II 802.11b products, introduced last summer, never really got off the ground in the home networking market.
"That category has been tough for anybody to enter," NPDTechworld analyst Stephen Baker said. "Linksys, Netgear and D-Link have been very strong there. It's been tough for other brands to dislodge them, even Intel."
Intel has also exited several other consumer-oriented markets, such as digital cameras, in the past year as part of a back-to-basics move aimed at trimming costs and refocusing on the business of making chips, chipsets and system boards for PCs.
Intel shut down its Intel Connected Products Division, which manufactured digital cameras and computer-oriented toys at the end of last year.
AnyPoint, which was at the time being managed by a different division, looked like it would survive that closure. Intel emphasized its plans to continue manufacturing and sales of home networking products.
Intel changed its mind about five months ago, deciding to cease manufacturing AnyPoint networking products. Intel continued to sell its remaining inventory directly to customers via its Web site, while retailers cleared out their inventories. The products appeared to be largely sold out as Intel ceased sales from its Web site.
Analysts said that home networking was a tough market to compete in, even for Intel, whose brand name is known by most consumers who purchase a PC. But Linksys is the 800-pound gorilla in this market. The company alone has held more than half the revenue in the market for the past 18 months.
Intel had 3.6 percent of the dollar revenue for networking products at retail--excluding modems--in 1999. That made it the No. 5 player. It improved to 4.1 percent of revenue, holding the No. 5 spot in 2000. But during 2001, it crashed to 1.7 percent of revenue. Through the first six months of 2002 it has garnered less than 0.5 percent of revenue, according to NPDTechworld.
"Intel hasn't gained the level of market share they wanted to," said Navin Sabharwal, a wireless analyst with ABI Research.
"It makes sense for them to bet on the enterprise market," instead, he said, because the more expensive equipment sold there can generate higher revenue.
Without AnyPoint, Intel will focus on its line of Intel PRO/Wireless 802.11 wireless networking products for businesses, which analysts say have fared well.
The PRO/Wireless line includes both 802.11a and 802.11b networking cards, access points and other hardware as well as Ethernet adaptors and other networking gear.