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Intel's Grove makes video pitch

Intel's chairman challenges the wireless industry to come up with better services than wireless e-mail and messaging, having his speech beamed to a PDA to prove the point.

ORLANDO, Fla.--Intel Chairman Andy Grove was in the palm of someone's hand on Monday.

Grove's image and his remarks about "broadband everywhere" were beamed live from his office in California to a personal digital assistant held by Intel Senior Vice President Ron Smith while he addressed thousands at the annual meeting of the Cellular Telecommunications & Internet Association here.

Grove said the trick--the first video call made on a commercial network in the United States--was performed to help deliver Intel's new message: that now is the time for U.S. carriers to do something more substantial with the high-speed networks they've built in the past few years and began switching on last year.

Grove challenged the industry to come up with better services than the wireless e-mail and instant messaging services that most carriers have begun offering. Instead, carriers should be helping businesses add more wireless programs for the cell phones and PDAs that workers use daily.

One new feature Smith demonstrated was how to use a PDA to watch an instructional video on repairing a piece of equipment. He also demonstrated "Friend Finder," a service that helps locate people based on the location of their cell phones.

"We shouldn't be the backwaters in the wireless world," Grove said during the video call, which was made over AT&T Wireless' high-speed phone network.

Most wireless carriers are spending billions to build new networks and expand coverage areas. Competition has gutted the price of a wireless call, and carriers need to find new ways of making money to survive. All are contemplating adding more data services, such as picture messages. But they are cautious, as services such as wireless e-mail have not caught on in the United States as much as hoped.

Companies like VoiceStream Wireless and AT&T Wireless say they are mostly waiting for their high-speed networks to be completed before offering new services. They want to avoid introducing a service that works only in portions of the country, or scaring off customers with limited service.

"We don't roll out anything that will be piecemeal," said VoiceStream Wireless spokeswoman Kim Thompson.

A chipmaker at a phone conference?
Intel has dived further into wireless-equipment making in the past year. The company is looking for new revenue and new markets as demand for its core product--chips for personal computers--has leveled off because of competition and falling prices. The company is also courting wireless companies after losing out to Texas Instruments on a vital contract to provide chips to Palm.

"You wouldn't have seen Intel at CTIA two years ago, but they realize they have to keep growing," said Nokia product marketing manager Lee Darnold.

Added Intel's Smith: "It's important for Intel to be in this space. Wireless data is the next big thing."

Like most other companies, Intel hasn't been immune to the nation's economic woes, despite showing some signs of life in January, when it reported slightly higher-than-expected fourth-quarter earnings of between $6.96 billion and nearly $7 billion.

Last week, analyst firm J.P. Morgan cut its revenue projections for Intel, concerned that the company's battle with other chipmakers for customers would cut into its profits.

The investment firm also cut its estimates on how much companies will spend on wireless communications. J.P. Morgan said that spending would drop 10 percent this year, rather than the previous estimate of 4 percent.