October 22, 2007 4:00 AM PDT
Newsmaker: For Intel, the business side of doing goodSee all Newsmakers
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Intel is backing major WiMax initiatives in India, China and Africa as well as in other parts of the world. As one of the major technology providers for WiMax, Intel could benefit a great deal financially if these regions adopted WiMax technology. I asked Cisco's CEO John Chambers a similar question. Do you think it's all right for companies to benefit financially for their so-called "philanthropic" activities?
Barrett: Golly, I think probably there is something of a virtuous cycle. Doing good often creates business and economic growth. And that growth allows for more good to be done. By the way, we are not a service provider. We don't provide WiMax service. That's for the telecommunications companies to do. Intel is a technology company.
True, but Intel makes the technology and the chips that will be embedded in devices that will use these WiMax networks. So some critics suggest that Intel's participation in these programs is really self-serving, because it could lead to the sale of more WiMax chips.
Barrett: That certainly is a possible interpretation. But WiMax as a broadband technology is the most cost-effective technology available today to reach the most people in rural and under-developed countries, which is why I think you see hundreds of trials of this technology around the world. And it is being received in most of the emerging market places very well.
Some of the detractors of the technology may be people who have spectrum licenses and who have invested in technologies like 3G. They may not want the competition. So they might suggest that it's not a proper thing to do. But it's really an issue that the country and the carrier have to decide. They have to decide what is the best technology for their needs and investment. We are encouraged that there are a couple of hundred trials and 50-some odd commercial deployments of the technology. So a whole bunch of people must think that it's a worthwhile investment, because they are putting their dollars behind it.
Many experts agree that WiMax seems like a good fit for the developing world where there is relatively little fixed communications infrastructure. But what about in developed markets like the U.S.? There has been a lot of criticism lately of Sprint's WiMax strategy. Do you think there is a place for that technology in the developed world?
Barrett: You have to do the business analysis just like you would with any other technology in any region. Is there a demand? Are there customers? Will you get a return on your investment?
But that seems to be the issue. There are a lot of Wall Street analysts who question the business case for deploying this network when there are already other technologies in place that could provide similar services.
Barrett: You'd have to ask Sprint about why they chose WiMax and if their business model holds up. Their CEO just departed, but you'd have to ask them if they went through a detailed technical and financial analysis to find out why they chose WiMax. And then you'd have to ask Clearwire why they decided to do the same thing. At the end of the day, it should be a decision made on the business merits of the technology. Is there a customer base? Will there be a return on investment? No one is forcing these companies to use this technology.
But Intel has certainly been pushing it and touting it as the best solution for mobile broadband.
Barrett: There is no doubt we have been one of the technology founders of WiMax. And we push it as a solution. But there are obviously people who have other interests, like the 3G cellular market. If they paid billions of dollars for their wireless licenses, they might not look favorably on another competitive offering. I think it's appropriate to look at who might be criticizing WiMax and why. And if you look at the people who have chosen WiMax, I'd assume that they have done their homework on the technology.
Intel has done an amazing job branding its chips for PCs, laptops and servers. Do you think the company can take that same strategy and apply it to the mobile computing market? For example, I know the laptop I'm using right now has an Intel processor. It says so on the sticker. But I couldn't tell you what processor is used in my smartphone.
Barrett: It all depends. There are not many successful component brands. NutraSweet was one. But their patent ran out and the brand was commoditized. Dolby Sound was another one. If you buy a stereo system, you still see the Dolby sticker. And Intel was another. But you have to have a unique set of circumstances for it to work.
Are the circumstances right for the mobile computing market?
Barrett: It could be, if in fact, you provide the user a unique experience. If you can bring the total power of the Internet into the device, you might be able to brand the components. Right now using smartphones to access the Internet is too complicated. I can use this device (smartphone) and go to Yahoo. But what I see is not what I am used to seeing. It's not the standard look and feel of the Internet.
But Apple seems to be doing that with the iPhone, right?
Barrett: Apple is attempting to do it , yes. But it doesn't offer the full Internet experience. If Intel accomplishes that, then I think you may be able to brand it in some fashion.
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