Intel pushes for Wi-Fi in China

HONG KONG: On paper at least, IPone and Ocamar Technologies may look like the hundreds of other Asian tech start-ups looking for a breakthrough. Each employs less than 100 people, the former in Seoul and the latter in Shanghai, and neither has eye-popping revenues.

But the pair are at the cutting edge of what chip giant Intel Corp, and others in the computer industry, hope will be a high-tech revolution that sees more and more people surfing the Web using laptop computers with wireless connections.

Intel made its first major push into wireless computing in March when it rolled out its new Centrino chip, which allows laptops to access the Web in transmitter-equipped public areas known as "hot spots". Centrino laptop users who are within 100 metres (328 feet) of such hot spots -- which can be located next to coffee bars and other convenient areas -- can surf the Internet or sign on to corporate networks.

At the March launch, computer makers HP, Dell Computer, Toshiba, IBM and Sony all pledged to include Intel's set of Centrino chips and wireless networking software in new notebook computers. Now the tech giant is making its second push into the arena by supporting companies such as IPone and Ocamar, which develop products and services for use with wireless computing or "Wi-Fi."

This week the two became the first East Asian Wi-Fi firms to receive money from Intel, which has now funded about a dozen such companies worldwide, said Claude Leglise, vice president of Intel Capital, in an interview at the company's Hong Kong office.

Leglise acknowledged the stakes are high for Intel, which is betting on Wi-Fi to revive an otherwise mature personal computing sector that has seen few major breakthroughs in the last decade.

"We have a lot riding on this," he said. "If we can accomplish what we set out to accomplish... the computing industry as we know it will be fundamentally different." Leglise would not disclose the size of Intel's first East Asian Wi-Fi investments, but said amounts typically ranged between $1 million and $10 million.

Telecoms analysts have called Centrino one of the biggest new tech product launches of the year. Intel received orders for hundreds of thousands of the chips -- which sell for between $292 and $720 -- in the first quarter and said it expected to surpass the one million mark in the second.

Long road ahead

Despite the high hopes, Wi-Fi in Asia and elsewhere faces an uphill battle on several fronts, not least because of the fragmented nature of hot spot networks set up without roaming agreements to connect them, said Tim Crowley, a broadband analyst at IDC.

Asia's relatively low prevalence of laptops, which make up just 15 percent of computer sales, will also pose a problem. By comparison, laptops make up about half of U.S sales.

Crowley said a number of Asian telecoms operators are setting up hot spot networks, including Korea's KT Corp and Hanaro Telecom, Singapore's StarHub and Singapore Telecommunications Ltd (SingTel), and China's China Netcom and China Mobile (Hong Kong) Ltd.

Within those markets, however, only Singapore has mounted a major effort so far to link up operators, Crowley said.

"There's a couple of drawbacks," he said. "There's still a question about how secure it is. And then there's also still a question as to the proper business model and what the cost is to the hot spot operator."

Leglise acknowledged Intel has its work cut out to meet its goal of widespread wireless computing -- especially in Asia, which accounts for nearly half of the company's sales.

There are about 71,000 such hot spots worldwide, according to Gartner, with up to a third in Asia - mostly in Korea, and the large majority of the rest in the United States.

"It's going to develop over time," Leglise said. "If we'd had this conversation a year ago, (the number of hot spots) would have been in the order of a few hundred. What is very clear is that the growth rate is phenomenal."

© Reuters