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Intel plans networking avalanche

Intel may be a chip powerhouse, but its networking division wants to put the industry on notice that an "avalanche" of activity is coming.

Intel (INTC) may be thought of as a PC processor powerhouse, but its networking division wants to put the industry on notice that an "avalanche" of activity is coming.

A series of announcements planned for the coming months, under the code-name Avalanche, are based on Fast Ethernet technology, which carries computer data across a network at 100 megabits per second and are intended to drive higher bandwidth products all the way to the desktop.

"No bottlenecks, straight all the way through--that's what we strive for," said Rienier Tuinzing, Intel's business unit manager for its networking products division.

Intel's networking business makes a series of adapter cards for PCs and servers and networking gear such as switches and hubs that are focused on small- to medium-sized businesses. The company sent a message to rivals last week that it is prepared to drive down pricing for Fast Ethernet gear, cutting prices on 10/100-mbps adapter cards by more than 40 percent to under $100.

When the dust cleared, adapter card rival 3Com's (COMS) stock had lost over 25 percent of its value and it reported decreased earnings expectations for the current quarter. 3Com gains 40 percent of its revenue from popular adapter card products.

Avalanche will include a series of new products, many of which will be based on technology accumulated via the recent acquisition of Case Technology of Copenhagen, Denmark, as well as a renewed focus on the company's indirect sales channel for networking products.

Intel executives feel the adoption of higher bandwidth Ethernet technology has been too slow and plan to cut prices to accelerate market acceptance. "There's no reason 10/100 [cards] should be any more expensive than 10 [cards] only," said Sean Riley, an Intel product line manager.

The Case acquisition brings Ethernet switching and routing technology to Intel. Officials have previously said that products based on the Case gear would hit the market by the end of the first quarter. The goal is to have a full product line of 10/100-mbps gear.

The second half of the year should be dominated by Gigabit Ethernet-related rollouts as a standard is finalized by the Gigabit Ethernet Alliance. All of this Ethernet gear will be tied together via LANDesk desktop management software products that will be Web-based (using Java applets) by the end of this year.

Case's low-end access router products will also be woven into Intel's strategy. The access routers will support x.25, ISDN, and frame relay networking technology and will hit the streets by the end of the first half of this year. "There aren't going to be any radical pieces, but when you tie them together they will offer a complete solution," Tuinzing said.