Wild about wireless

You would expect Sean Maloney to be wild about Wi-Fi. After all, as general manager of chipmaker Intel's Communications Group, it's his job to wave the flag for wireless broadband.

But Maloney also enjoys a unique vantage point in the technology food chain. Intel makes a broad assortment of processors for communications, Ethernet and Wi-Fi, allowing the company to tap into emerging trends long before they become conventional wisdom.

Despite the inevitable hype that surrounds the 802.11 radio frequency standard, Maloney expects wireless to continue to surge in popularity. Wi-Fi's next destination, he says, is in the home by way of a new generation of interconnected home electronics.

		Get Up to Speed on... Wi-Fi Get the latest headlines and company-specific news in our expanded GUTS section.

Meanwhile, changes are in the works that will affect the way Wi-Fi develops in the United States and overseas. Maloney recently spoke with CNET News.com about what's on the horizon for wireless technologies.

Q: What's the market for communications chips like these days?
A: The economics are looking better now than they were. We always need the next big thing, and the next big thing is wireless broadband. We had a recession in 2001, 2002 and then from the beginning of this year. It was very clear that Wi-Fi was going to be a very big deal. It's going to generate a new set of applications, a new range of interest, a new cause for optimism. That's all pretty much played out.

It's not that we're in boom times, necessarily, but things do look better. At any time in the past when recessions have drawn to an end, there have been winners and losers. The losers tend to be the people that haven't invested, and the winners tend to be the people who have invested. People who cut back when times get tough cut back too much. They tend not to really recover when the recovery comes. People who have invested in Wi-Fi are seeing growth.

Did Intel's buying 35 companies involved in networking and communications help out?
That was mainly during the boom. Since 2001, when we formed Intel Communications Group--we formed it out of all of those businesses--we've done a series of acquisitions, but nowhere near the same level.

Or was it that Intel didn't divest heavily during the economic downturn and resulting semiconductor slump?
We trimmed. We exited certain businesses, and then we doubled down on certain others. So we doubled up the wireless investment. We were late to wireless. No, let's put it this way: We were late to Wi-Fi relative to what we should have been. We had to run to catch up, but we're comfortable that we've caught up.

Homes are already digital. Everyone's already got a computer. The question is, how do you network it?

Will Wi-Fi be one of the major focus points of your business?
The analogy is the Internet. The first time I saw a browser was 1992. It was like science fiction author Arthur C. Clarke's line, "Any good technology is indistinguishable from magic."

You get the same feeling when you first use broadband wireless. Sitting in San Francisco International Airport, watching rugby on my notebook computer and synchronizing my Intel Outlook e-mail at warp speed is a magical experience. I used to spend an hour and a half or two hours a day futzing around, synchronizing my e-mail, as do so many road warriors. Now (snaps his fingers), it happens like that. It's magical.

The era now does have analogies to 1994. You know that there is too much hype. On the other hand, you know that it is going to change everything.

Can you give an example?
Police--San Mateo's putting a wireless umbrella over the whole California county so that the cops don't have to come back to the police station to synchronize. They say they were spending as much as three hours per day driving back and forth to the police station. It completely changes things.

We had a doctor from Beijing who has done a ton of motion study on doctors there. They spent more than an hour a day walking backward and forward to get information. These are people who spent seven years training. An hour a day walking is a total waste of time.

Broadband wireless is coming out with all these amazing different ways of doing things, just like the Internet did in 1994.

When you say wireless broadband, what do you mean? Wi-Fi, or 802.11b, is usually what comes to most people's minds
Broadly, you're right. The reason I don't want to be dogmatic on it is that the Koreans and the Japanese are both insistent that they are going to get 2 megabits of data per second over 3G (third-generation cellular networks).

You know that there is too much hype. On the other hand, you know that it is going to change everything.

There are plenty of people who are skeptical about that, but some of the 3G guys say they are going to do it. We'll see.

It doesn't have to be a standards war, anyway. But it's definitely broadband. Me sitting in San Francisco's airport wirelessly at 24 kilobits per second--that's not what this is about. This has to be orders of magnitude faster than that. 802.11b or 802.11a or 802.11g or 802.16 or the very high-ends of 3G--that's it. That's it. That's what's going to change things.

To me, the fascinating question is: What are the unexpected consequences of widespread Wi-Fi? What unusual, unexpected thing is going to happen? It's a fascinating time.

Have you seen the movie "Minority Report"?
Sure.

Is it going to be like the scene in that movie where the main character is shown walking in a shopping mall and advertisements change as he walks by or call out to him by name?
Hyundai in Korea is doing something similar. Right now, if you go to any of the big U.S. stores, they have your shopping history already, but it's at the terminal...and it's often only accessible through some clumsy interface. What Hyundai has done in its stores is to give all the store assistants PDAs (personal digital assistants). So when you come in the door, the guy says, "Good morning. What's your phone number?" and you give your number, he says, "Oh. Hi, John. You bought so-and-so here last week."

The PDA will automatically suggest what you want to buy today. So, by giving all the assistants PDAs, all the assistants become personal shoppers. You don't have to check out, because he's got your credit card detail there, so he just ticks off that you've got it, and you walk out the door. The experience for you is smoother, and the store has the opportunity to get you to buy more stuff.

Basically, that data was already tracked at the cash terminal. Now the data is everywhere, using 802.11b in a PDA.

But Hyundai mainly went to the effort to use software to make that work?
Yes. There are tons of examples like that.

Businesses are increasingly turning to wireless. How does Wi-Fi aid the digital home concept, which a number of companies are beginning to pursue again?
Homes are already digital. Everyone's already got a computer. The question is, how do you network it? If you ask anybody, "Do you want a network?" they all say no, because they either don't know what a network is, or they do and they don't want the hassle of having to maintain it.

But if you ask someone, "Do you want these devices to talk to each other?" they'll say, "Yeah. Sure I do."

Parks Associates did some interesting studies on that recently. The conclusion is that home networking is absolutely exploding because of Wi-Fi. After 10 years of almost nothing, it's (now) just going through the roof.

The analogy to me is if you think about how USB (universal serial bus) came along five or six years ago--you'd go into a store and buy all these little USB gadgets that work with a PC--now its going to be Wi-Fi gadgets. Wi-Fi cameras. Wi-Fi printers. Wi-Fi media adapters. Wi-Fi TVs.

Do you have a digital camera? When you get yourself a fancy, spanking-new one, you just end up taking so many digital pictures, and they're all stuck on the hard drive. Your loved one says, "What's the use of them being on the hard drive? Why can't we go back to having them on paper?"

So then you display them on the TV. It's almost inevitable that you're going to end up having fast quantities of video, vast quantities of pictures and all your music on your hard drive. You just need these super easy Wi-Fi gadgets to get it all around the home. A bunch of Taiwanese companies are making them at the moment and selling them through companies in the United States.

How does this tie back into the business of selling chips and making money for Intel?
The digital home has already happened. The PC is already there. Wi-Fi now means that you can get that content all around the house--that you can link all these devices up.

You've got a virtuous cycle of people buying more devices with more chips in them.

So that's where Intel benefits?
Yes.

If I buy wireless networking gear from Linksys or another brand, how much of it will have Intel's chips inside it?
It's a mix. Some of it does. Some of it doesn't. We sell the little Intel XScale processors that go into a lot of these things. A lot of the Linksys stuff has got Intel network processors in it.

On the Wi-FI chips, so far, we've been selling almost 100 percent into computers, just because we've been so preoccupied with that space. We haven't really bothered going after the others. Eventually we will.

We have a new radio coming out real soon. We're very happy with a number of things about that product in terms of performance and all sorts of things.

That's the combination 802.11b/g radio module we've been hearing about that will go into Centrino notebooks?
Mainly, but a lot of Asian manufacturers are very interested in using the device for other things.

I can't tell you exactly when it's launching, but it's coming out soon.