Nanotech - The Circuits Blog

Ask Sean Maloney about Intel's biggest challenges and biggest opportunities for growth and he'll mention the same thing: WiMax, the company's chosen broadband technology.

Maloney, an executive vice president of Intel and the chipmaker's chief sales and marketing officer, has seen waves of technology come and go since joining the company back in 1982. Recently, he got the additional responsibility of coordinating company strategy, which he said has "a good deal to do with the rapid pace of our global development."

I had the chance to talk with him last week. Maloney initially touched on how the consumer notebook market is tracking the cell phone market. Just as cell phones are now driven heavily by consumer demand, so will notebooks be primarily driven by consumer demand in the years to come, according to Maloney.

Maloney also discussed how the shift in global notebook sales is transforming Intel into a consumer product company, and how Intel will respond to competitors in China and elsewhere.

Q: What are the biggest challenges for Intel going forward?
Maloney: If you look at the notebook market it's growing very rapidly. The notebook has gone through the same pattern as the cell phone went through in '97, '98. The notebook is becoming heavily driven by the consumer market. The computer industry has largely been dominated by business computing since the 1940s. Consumer is now dominating computing.

The percentage of our business that's in the U.S. has shrunk radically in the last 10 years and shrunk radically in Europe. The emerging markets are now the dominant markets.

We're about 10 years behind the cell phone in that pattern. Where the cell phone is now, it is very much matured in terms of growth in most markets. Even in countries like Angola and Mozambique, there is heavy penetration. The computer industry and the notebook industry is a decade behind that.

Q: In the consumer segment, netbooks (typically ultra-small notebooks priced below $600) are catching on in a big way, what do you see as the reason for that?
Maloney: Previously, someone in an emerging market, just went to a cybercafe. Now they can afford to get online themselves. In the mature markets, (it's people) who can't afford a notebook, like 8-year-olds to 12-year-olds. Or someone who wants to take something out in the evening but doesn't want to drag along a 16-inch notebook. The underlying driver is Web access. People spend much, much more time on the Web every day than they do on their cell phones. And yet you don't have that portability, so that pushes (consumers) in that direction.

Q: How does Intel respond to a chip like the Chinese Godson processor that has government backing?
Maloney: There's a long history of this in Japan, of state-sponsored computer research. And Europe, the same thing. It's not surprising (in this case) because many people see the microprocessor as the essential building block of IT. That's not surprising that governments want to put money in there.

It's potentially a threat. But we're fairly relaxed about it. We don't expect to be the only supplier. On the other hand, we've announced very large manufacturing facilities inside of China. We are a big player in the Chinese market ourselves.

Q: Intel has repeatedly touted WiMax as critical to Intel's mobile future, if not its future overall. So, how important is WiMax to Intel?
Maloney: It's very important to the computer industry, period. Because, if you look at the projections for the industry in the next 10 years, they are heavily predicated upon mobile computing and broadband in emerging markets. And even in the U.S., you still have sizable percentages of the population who still don't have broadband. In countries that are going to generate growth in the industry in the next decade, you don't have copper, you don't have fiber. So, you've got to have a way to get low-cost broadband. That was the design goal of the program. It was to be a low-cost, high-speed broadband network.

If broadband doesn't happen...industry growth will eventually slow down. If it does happen, growth will continue and new services will come along. It's an old story. Back in the '80s, we spent a decade trying to get Ethernet established. (As a result) we got client-server computing. We did the same thing with Wi-Fi, 1999 through 2002. There's been a long history of the computer industry needing standardized, high-speed communications. It's been a big piece of the computer industry's history.

Q: Intel said that WiMax has to deliver from 5 to 10 times the performance over existing products in the market to be successful, but mobile WiMax doesn't necessarily do this.
Maloney: The performance--I disagree about this. And you'll get to find out about that very soon because the network is going to start to roll out very soon. And you're going to see extremely good performance. And I'm certainly confident we're going to hit the design goals on performance. So, the argument on that one is going to get resolved real soon.

On the time it's taken...Actually, 16e (802.16e)--the global standard for mobile WiMax--was finalized at the end of 2005. We're now in 2008. So, it's a relatively quick period of time for this revision. 16d, which is the previous standard, is an older, slower technology, which didn't have as broad support. 16e has very broad international support. Subsequent to the standard being finalized, it's actually moved along pretty quickly.

We have over 200 networks in trial or being deployed. And we're very comfortable with the progress.

(Regarding) LTE (Long-Term Evolution, a competitor to WiMax). LTE is pretty similar technology (to WiMax) in many, many ways. It's some way off. We'll see what happens with that. As far as EV-DO is concerned, it's not a technology that's available in Europe or Africa or pretty much anywhere in South America and very little in Asia. Wideband CDMA is generally available but much slower.

All these technologies are useful. If I can't get a signal, I love EV-DO, I use EV-DO, I use all these things. But we're comfortable that WiMax is going to augment these things by being a lot quicker. We still feel comfortable it was the right program and we're making progress on it.

Q: Intel has been successful at integrating key technologies, such as Wi-Fi and graphics into its chipsets. What's the next big step in integration?
Maloney: More shorter term, the industry's concerned about multicore and integrating more of the conventional I/O and graphics capabilities. I think people are going to tend to keep the radio (Wi-Fi or other wireless communications technologies, including WiMax) discrete (as separate silicon) for a little while longer. But I think it's more of a business decision not a technology decision.

On the (current) 3G services, the attach rate on notebooks is very low. Actually, low single digits. The computer industry has a history of only integrating things when you get up to 50 percent or 60 percent or 70 percent of people wanting the feature. We are there with Wi-Fi now. (Editors' note: As to why Wi-Fi is still discrete, Maloney repeated that it's a business decision, not a technology decision.)

I don't see one technology replacing another. You're going to want to use whatever technology is available. Certainly, we're confident that there's going to be a big build-out of WiMax over the next three years. But people are going to carry on using the 3G infrastructure where it is. Or 2G infrastructure. Nobody rips these communications (infrastructures) and throws them out. They carry on being used.

The traffic growth is very, very high. We're still looking at 50 percent per year traffic growth. Those are really big numbers and we're going to need a lot of bandwidth and a lot of technology to supply that."

Update on September 4 at 10:00 a.m. with correction about Aicent. See also statement clarifying Aicent's business strategy at bottom.

Intel's investment arm has put another chunk of change into WiMax, a wireless technology that has not lived up to its billing as the successor to Wi-Fi.

This time Intel Capital has sunk $3 million into Aicent with the hope of accelerating the wireless technology's adoption.

Aicent provides data network, messaging, and roaming solutions for GSM and CDMA mobile operators and operates one of the world's first and largest multimedia messaging exchanges, according to an Aicent statement.

In an interview, Ranjeet Alexis, senior director at Intel Capital, said that Aicent excels in "roaming exchange" technology--"Where different carriers can connect to other carriers," according to Alexis.

"They create this hub and different carriers can connect to the hub. If a carrier, let's say, in Africa or Latin America or India, wants to connect into China Mobile, they don't have to directly go to China Mobile," Alexis said. "They can connect to the hub, which, in turn, connects to China Mobile."

Alexis said that WiMax operators could access this hub and connect across different carriers running different wireless technologies.

An interesting concept, except WiMax is still trying to find a foothold after being launched back in 2001 by the WiMax Forum. Not that money has been an obstacle. Intel is a major backer of WiMax along with Nokia and Motorola. The world's largest chipmaker has invested $600 million in Clearwire. That investment is part of $900 million in joint financing of Clearwire with Motorola.

Sprint Nextel and Clearwire, in turn, have allocated $5 billion for a WiMax build-out by 2010, and Intel CEO Paul Otellini has proclaimed that 750 million people will be covered by WiMax in 2010 and 1.3 billion by 2012. WiMax is like Wi-Fi, but offers much broader coverage.

Gartner analyst Ken Dulaney, however, is not keen on WiMax's chances. Dulaney says it has potential in developing countries where there is little wired infrastructure. "There, it makes a lot of sense," he said. But less so in developed countries, where, as a pure mobile technology, it is problematic.

"It's semi-mobile, which means you pretty much have to stay in one place while you're using (WiMax)," Dulaney said. "There were supposed to be mobile phones out from Motorola and Samsung but those haven't appeared."

"So, we would say WiMax, as a (pure) mobile technology, has underperformed and doesn't have much potential there." And WiMax will have trouble going head-to-head with cell phone giants like Verizon, he said. "It's going to pale in comparison to Verizon who's committed to LTE. AT&T and T-Mobile all are also committed to LTE." (LTE stands for Long-Term Evolution.)

"That leaves Sprint as sort of a wireless orphan," Dulaney said, referring to the fact that Sprint is stuck with WiMax.

"Most likely what you're going to see is that Intel is going to throw a lot of money at getting laptop manufacturers to put WiMax into their laptops," he said, with the hope that users will select WiMax over Wi-Fi.

Intel also has plans to push WiMax for its handheld mobile Internet devices.

(Correction: Aicent is not a startup. It was founded in 2000 and its services cover 1 billion subscribers.)

(Correction: Aicent states that it's technology-agnostic. The company made the following statement: In as much as Intel is betting on WiMax, Aicent is betting that technology evolves and Aicent needs to be ready to support all the technologies employed by carriers around the world. Yes, Aicent has a WiMax initiative, but the company's 4G plans include LTE and UMB as well. And Aicent's services are global in nature so if WiMax becomes the popular choice in Africa, there will be a need for their services between African carriers, and between African carriers and carriers around the world - potentially for interstandard roaming.)

WiMax is in the cards for the Eee PC. Asus will demonstrate notebooks Monday that integrate WiMax chips from San Jose, Calif.-based GCT Semiconductor.

Despite recent statements that the Eee PC 901 will not get WiMax, GCT Semiconductor announced--along with Asus--Sunday that Asus has integrated GCT's GDM7205 WiMAX single-chip silicon into the F8 notebook series and Eee PC.

GCT says the F8 series and Eee PC will be demonstrated with WiMax at the WiMax Expo Taipei that begins on June 2nd.

The widely-reported specifications for the Eee PC 901 are a 1.6GHz Atom processor, an 8.9-inch screen, solid state drive (12GB or 20GB), 1GB of memory, and either Linux or Windows XP. A future version of the Eee PC is expected to get WiMax.

Intel will also be demonstrating WiMax in the Asus M51VA notebook at Computex. Versions of the Eee PC may also come with the Intel WiMax chipset.

But Asus is clearly working with GCT also. "We are pleased to be working with a proven industry leader like GCT, who has enabled Asus to provide our customers with systems containing reliable high performance WiMax capability," said Jellent Sun, Asus' senior director of notebook product marketing, in a statement.

GCT said that its single-chip WiMax solution enables "lower power consumption for longer battery life, smaller form-factor design and lower bill of materials cost."

GCT is also supplying WiMax chips for notebooks based on Via Technologies silicon.

As a Computex preview, Intel is showing off its "delayed" Centrino 2 platform via an Asus notebook.

A chunk of the Centrino 2 roll-out has been delayed until August 5--and WiMax even beyond that. Intel, however, is slated to do a Centrino 2 processor refresh on July 14.

"Today I've got my privileged hands on a brand spanking new Asus Centrino 2 ("Montevina" for us nerds) system," according to a pre-Computex Intel blog.

Intel, not surprisingly, is trying to build enthusiasm for Centrino 2 and WiMax. But, with chipset and WiMax delays, all this euphoria comes with qualifiers.

The Intel blogger, Craig Raymond, senior technical marketing engineer for Corporate Demonstrations at Intel, is--not surprisingly--ebullient about the "new mobile powerhouse"--An Asus M51VA with a Penryn P8600 2.4GHz processor. The P8600 is part of the upcoming Centrino 2 processor refresh.

But he quickly qualifies the euphoria with: "Oh Montevina...You broke our hearts with the launch delay."

He cites one of the best features as testing "World of Warcraft over the live Fitel WiMax here in Taipei."

"That's right. You heard me correctly. Montevina, WiMax; live in Taipei. Kind of strange to say it all in one mouthful, but it's finally here."

This statement has to be qualified too since WiMax won't ship with Centrino 2 until later this year. "When WiMax ships with Centrino 2 later this year, no add on card required, the Echo Peak mini-card hidden under the hood (like the one inside this Asus) promises the 'always on' connection we've been lusting for."

"Online gaming over a live carrier network has long been my holy grail around WiMax. Here from my outside park bench, after downloading my Warcraft client, I'm able log into the game world to slay all manner of goblins and over sized gerbils," he gushed. (More here).