The question reverberating around the chip industry is: Can Intel compete in a market of which it only owns 10 per cent of the customers' customer base?
Following the rolling together of the Sprint-Nextel Wimax network previously called Xohm, with Craig McCaw’s Clearwire network, into a new combined entity which will be called, somewhat confusingly, Clearwire, it emerges that Intel, by putting $1 billion into the new Clearwire Mark 2, on top of the $600 million it previously put into the old, separate, Clearwire Mark 1, will have 10 per cent of the new, joined-up Clearwire Mark 2.
I’m sorry if that sounds confusing but it’s a confusing situation. Why couldn’t they call the new Clearwire Mark 2, Or Clearwireless? Or Dobbin?
Clearwire is, after all, a really silly name for a wireless network.
But the question arises: Now that Intel owns 10 per cent of the largest Wimax network in the US, how will Intel do in the US market for Wimax chips?
You would have thought: pretty goddamn well (to slip into American) but, after cheer-leading WiFi, Intel did comparatively poorly in the WiFi chip market – dominating the PC end of it, but losing out pretty badly to Broadcom at the infrastructure end.
So it could come as a bit of a shock to the poor old Intel marketing guys who have got fat, dumb and happy on the assumption that Intel is entitled by God-given right to 70 per cent market share.
Can they sell chips into a wireless market where they only own ten per cent of the network?
Could be tough.
TOMORROW: TEN RULES FOR ALLIANCES BY TYSUYOSHI KAWANISHI
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