Intel pumps up Wi-Fi investments

Intel will increase its investment in wireless networking technology Wednesday when it is expected to announce a minority stake in two companies developing Wi-Fi products.

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The chipmaker's Communications Fund is throwing in with network access company STSN and IP telephony software developer TeleSym. Intel first invested STSN in 1999. The companies would not disclose the terms or the amounts of the financing.

The Santa Clara, Calif.-based chipmaker, along with others such as AT&T and IBM, is also partially funding start-up Cometa Networks, which is working to deploy a nationwide network of public hot spots to give subscribers access to the Internet from just about anywhere.

"These investments accelerate our business strategy, and it's always a good thing when our equity strategy promotes our business strategy," said John Hull, a director of the Intel Communications Fund.

The computer industry has latched onto Wi-Fi in hopes of renewing consumer interest. The technology is gradually infiltrating everything from PCs to DVD players, leading industry analysts to forecast significant growth in the coming years as consumers complement their high-speed broadband access with wireless networks and connect their devices to those networks.

Intel is also looking to jump onto the Wi-Fi bandwagon with its first Wi-Fi module, code-named Calexico, which will be part of a platform that will include its upcoming Banias notebook processor. Intel originally planned to come out with a dual-band 802.11(a)(b) chip at the same time it released its upcoming Banias notebook processor and Calexico, in the first half of 2003, but it is delaying its Wi-Fi chips until later in the first half of 2003 to clean up some engineering issues and clear regulatory hurdles.

Intel announced in October that its Communications Fund planned to invest $150 million in wireless start-ups to help accelerate the acceptance of 802.11, also known as Wi-Fi. The technology lets devices located within a 300-foot radius of one another communicate without wires. Intel is taking minority stakes--less than 20 percent--in companies, typically investing between $1 million to $10 million. The Communications Fund is managed by Intel Capital, which was created to invest $500 million in voice and data communications technologies.

Salt Lake City-based STSN connects hotel guest rooms and meeting rooms to wired and wireless high-speed data networks.

TeleSym, which is based in Bellevue, Wash., develops software that allows voice communications over wireless networks and can be used on mobile PCs and handheld devices.