Intel's commoditization machine

April 18, 2005

Intel will mark the 40th anniversary of Moore's Law today by unveiling a new line of dual-core microprocessors. That's big news, but it's overshadowed by another Intel announcement: the launch of a chip for long-distance wireless networking. WiMax, as the fledgling networking standard is called, enables data to be transmitted over the air, at high speed, across 20 or 30 miles. In distance terms, it marks a quantum leap over today's popular Wi-Fi networks.

Intel played a crucial role in turning Wi-Fi into a cheap commodity - it reportedly priced its Centrino Wi-Fi chips at less than the cost of producing them in order to spur Wi-Fi's broad adoption. Now, it's hoping to do the same for WiMax. As a Gartner analyst told the New York Times, "This isn't a profitable chip for Intel," but it "gives the WiMax market a kick start." What's in it for Intel? By promoting the use of wireless networks, it knows it will also encourage people to buy new laptops and other portable devices to tap into the transmissions. That means more sales of lucrative Intel chipsets. Intel wants WiMax to become a commodity - as quickly as possible.

"Commoditization" (or is it "commodification"?) is often viewed as a dirty word in tech circles. But it's actually a great force for progress. Long-distance wireless networking promises to bring broadband access to areas that lack cable or DSL service. Over the longer run, it will enhance everyone's connectivity and promote all sorts of related innovations. Commoditization is our friend.

Posted by nick at April 18, 2005 09:17 AM