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Intel shelves plans for Wi-Fi access point

Due to lack of demand, the chipmaker postpones plans to build Wi-Fi access points into desktop PCs this year.

Networking
Intel has snuffed out a plan to provide consumer desktop PCs with built-in Wi-Fi access points--the latest wrinkle for the chipmaker, which has faced a number of product setbacks this year.

Intel had planned to deliver its Intel Wireless Connect product--a bundle consisting of a special memory controller hub chip for its Intel Express 915 chipset, a Wi-Fi card and setup software--to PC makers during the fourth quarter. Intel had hoped that Wireless Connect would help popularize Wi-Fi networks, as the bundle would let a PC serve as a wireless networking hub for the home.

However, after evaluating feedback from PC manufacturers, Intel no longer plans to deliver Wireless Connect in late 2004 and early 2005 with the current generation of technology. The company may insert Wi-Fi functionality into future generations of chipsets, but that functionality won't appear in the current desktop chipsets, as planned. Intel comes out with major revisions to its chipsets about once a year.

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What's new:
Intel has canceled plans to offer Wi-Fi connectivity in current desktop chipsets, citing lack of customer interest.

Bottom line:
For the moment, the chipmaker's digital home strategy will step back from a focus on a hublike role and instead look at taking an indirect part, with the company participating in industry groups and helping develop specifications.

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PC makers told Intel that they didn't need the option, thanks to today's low prices and wide availability of Wi-Fi access points, some of which cost as little as $30, said Bill Leszinske, director of Intel's Digital Home initiative. The bundle was originally supposed to come out with a wave of PCs in the summer, but Intel took it out due to technical issues.

"We've been talking to our OEMs (original equipment manufacturers) a lot about this, and right now, we're not planning to productize (Wireless Connect) in the 91x and 925 platforms this year," he said. "The OEMs came back to us and said, 'We don't think we really need this right now.' So we decided to step back."

The move, which gives a nod to the prolific nature of Wi-Fi access-point competitors such as Linksys and NetGear, also shows a shift in Intel's digital home strategy. Instead of aiming to provide all of the nuts and bolts of the digital home--where Intel and PC makers envision that a wide range of devices will share multimedia files and Internet access provided by a PC--Intel will stick to efforts such as designing new kinds of PCs--its Entertainment PCs, for example--and to driving digital home standards through efforts such as the Digital Living Network Alliance to help foster the sharing of content between PCs, televisions and other devices. Devices that use DLNA standards will begin appearing soon, Leszinske said.

But while Intel still believes in the concept of building easy-to-use wireless-access points into consumer desktops, Leszinske said, it will leave the job of providing the pipeline for communications to others for now.

"Home networks are still largely in the early stage of adoption. As you want to start driving them to more mainstream uses, (Wireless Connect) makes more sense," he said. But "we really don't need to deploy this technology now. It works. It's great, and we love it. But we really don't need to do it" right now.

Intel, which is closely watched as an industry bellwether, has had to deal with an uncharacteristically large number of missteps and setbacks this year, the latest of which included delaying its chip for televisions and pushing back its desktop 4GHz Pentium 4 from the fourth quarter into the first quarter of 2005. Before that, a manufacturing defect caused a limited recall of some 915 chipset memory controllers. That prompted a memo from chief executive Craig Barrett, who bluntly told employees to

Wireless Connect also faced problems of integration, as its antenna would have stuck out of the back of a PC, and the PC would have had to have remained on for the network to continue operating. Intel had hoped to solve some of those issues in a future generation of the bundle.

Indeed, "its usefulness was always limited," said Craig Mathias, an analyst at the Farpoint Group. "Most educated PC users wouldn't want to burden a PC with more features. The fear is that it would make the systems unreliable."

Although some would see it as adding value, "Most people don't need it," Mathias said.

"I was never worried about them; I didn't see their effort as a viable solution," said Vivek Pathela, senior director of product management and marketing at NetGear.

That's because even as more consumers install networks and as wireless networking makes its way into more products, plenty of work still needs to be done to improve it. And of the three major issues being addressed now, including faster speeds, greater coverage areas and more convenient network setups, Intel has only really addressed setups.

Although nothing has yet been decided, one scenario could have the chipmaker waiting as long as two or three years to deliver an access point that works with WiMax.

WiMax is "one of the things we're going to talk about" internally, Leszinske said. "We're sorting through that, and we're talking to our customers about a logical intercept point (to bring Wireless Connect into PCs). It's a long-term plan we expect to follow. Just the current incarnation wasn't required."

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