Intel delays release of part of Centrino

Intel Corp. has decided to hold on to the 802.11a/802.11b dual-mode component of its much hyped Centrino chip until the beginning of the fourth quarter (Q4) this year which, according to Intel, won’t make much difference to its customers.

“It’s just a delay. I think that really, at this point, the majority of the customers that we are targeting are really using (just) 802.11b solutions anyway,” said Barbara Grimes, spokesperson for Intel in Portland, Ore. “But we did commit to bringing out [an] 802.11a product to market and that’s what we are doing with this.”

This Wi-Fi component to Intel’s Centrino chip, which was originally scheduled to be released in the early part of the third quarter (Q3), has been held back to Q4 because the company has not completed its testing period for the chip, Grimes said. She added that Intel is very diligent when it comes to releasing its chips, and it won’t consider sending the product to market until the testing phase is complete.

“Basically we are in the final stages of testing and validation and working with our customers toward introducing the product…we just need a few more weeks to finish the validation and testing,” Grimes said.

According to Peter Kastner, executive vice-president for research firm Aberdeen Group Inc., the late delivery by Intel of dual-band 802.11a/b and next year’s delivery of 802.11g is forcing laptop suppliers to turn to alternative radio chip sources.

“In turn, the variety of Centrino branded laptops in the market is reduced, and the Centrino brand diminished since an Intel radio chip must be used to garner the Centrino badge,” Kastner said.

He said the delay has caused little harm to the company and added that the Centrino class of laptops with the Pentium M processor are selling well to enterprises even with non-Intel radios.

“The minor harm to Intel has been to the Centrino brand development effort and Intel’s technology reputation, not Intel’s pocketbook. This is a tempest in a teapot issue.”

Sarah Kim, an analyst with The Yankee Group in Boston, Mass. said she is not surprised that Intel failed to meet its Q3 deadline for the 802.11a/802.11b Wi-Fi component and added that when it comes to Wi-Fi, the company “doesn’t have all that much.”

“I think their strategy of trying to become a bigger name in this space would have been best served by building partnerships with different radio solution providers – because there are so many of them – and being able to support them all on the Centrino platform rather than promising to deliver on a technology that [Intel is] struggling with,” Kim said.

She added that it is ironic that consumers are equating Wi-Fi with Intel, when in fact, the radio technology used isn’t even its own. It just goes to show how much of this market is a marketing push rather than a technology drive, Kim said.

From a revenue perspective, Kim doesn’t think the company is getting much out of its Wi-Fi technology at this point in time. Even when it does introduce its own product, there is going to be quite a bit of time before it actually generates significant revenue streams from Wi-Fi, she added.

Kim said this Wi-Fi push from Centrino is all in support of its microprocessing business and this technology is simply a way for it to give value to its microprocessor customers.

“So, they can say, ‘hey mister OEM (original equipment manufacturer), I’m going to give you this. If you buy my microprocessor architecture then you sell more laptops, then we’ll give you this Wi-Fi for effectively zero cost.’ But, someone has to eat that bill of material, and it’s certainly not going to be the OEM…it’s going to be Intel. So, Intel looks like it is going to buy its way into the market,” Kim added.

Intel is just trying to break into this market as a way to drive a bigger market opportunity, Kim said adding that Wi-Fi is never going to be as big to Intel as the company’s core business.

“If they can use this marketing message to drive their core business, then they have succeed.”

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