Ruminations on the electronics industry from David Manners, Senior Components Editor on Electronics Weekly.
Another Good Intel Idea Bites The Dust
Covad Communications, Clearwire, SpectraWatt – what have they all got in common? All were backed by Intel. And all failed.
But they all seemed a good idea at the time.
Covad was one of the ‘CLECs’ – competititive local exchange carriers whose existence was enabled by the US 1996 Telecommunications Act.
Setting up in the wired telecommunications business in opposition to the traditional carriers seemed like a good idea at the time. Founded in 1996, Covad was sold to a private equity company in 2008.
Clearwire set out to provide wireless data services in the US using Wimax. Intel put $1.6 billion into the venture in 2009 and wrote off 90% of it. Wimax is basically seen as a dead dog in the US as LTE takes over.
Spectrawatt spun off from Intel in 2008 with $50 million of Intel VC money to manufacture solar cells. It has closed its factory and filed for bankruptcy.
What is it about Intel? Does inhabiting a quasi-monopoly cocoon make it difficult to operate in freely competitive markets?Tags: clearwire, cocoon, equity company, Intel, monopoly