While the move could simplify the process of setting up the networks, which use a popular networking technology known as Wi-Fi, it could be bad news for companies such as Cisco and Netgear Inc., which sell wireless routers used in such networks for between $75 and $150 each, analysts said.
At an analyst meeting last week, Intel President and Chief Operating Officer Paul Otellini disclosed plans to include the capability of a wireless access point in a forthcoming chipset. The chipset is the lesser-known, but critically important, assistant to the microprocessor, the brain of a computer.
Today, consumers and businesses create Internet hot spots, or areas where the Web can be accessed wirelessly and at high speeds, by connecting a wireless access point to a high speed Internet connection from a cable or DSL line. Wireless access points broadcast signals as far as 150 feet away.
When Intel chipset, which is code-named Grantsdale, is released in the first half of next year, buyers of high-end computers using Intel’s Pentium 4 chips will no longer need to fuss with installing a separate wireless access point.
The chipset, however, will not include an actual Wi-Fi radio, so users will still need a wireless add-on card. Intel has said it eventually intends build a Wi-Fi radio into its microprocessors.
Intel’s Grantsdale project broadens the company’s efforts to promote Wi-Fi, the leading wireless standard for computers. Intel’s Centrino chips for mobile computers, which include a low-power microprocessor and a Wi-Fi chip, have generated $2 billion in revenue in their first year and made the company the new, dominant supplier of Wi-Fi chips, Otellini said.
Intel’s foray into promoting Wi-Fi is credited with boosting sales of wireless networking products offered by a range of wireless equipment makers.
Sales of low-end access points could dip if PC owners rely on the capabilities of their Intel-powered desktop computers, said Ken Furer, a semiconductor analyst for IDC who researches the Wi-Fi market.
But Intel’s plan, he added, might break with a trend in wireless Internet access toward more advanced stand-alone wireless access points known as gateways, which bundle a cable or DSL modem with a wireless router.
“I think it certainly poses a threat to lower-end access points,” Furer said. “We’re seeing more momentum in terms of wireless going toward the gateway device than that functionality going into the PC,” Furer said.
A desktop computer that could share Internet access without the need for a stand-alone device could simplify the networking process and save computer owners some cash, said Nathan Brookwood, a principal analyst at research firm and consultancy Insight 64.
Still, he said, desktop computers would probably have to be kept on 24-hours a day for the network to always stay on, which could rack up the electricity bill, he said.
“It may appeal to some folks,” Brookwood said. “But by and large I think that the external appliance-type access point that people like Linksys and Netgear are selling by the bushel might be a much more effective way to solve that problem.”