Intel to Invest $600 Million in Startup - LA Times
By DAN GOODIN, AP Technology Writer
5:14 PM PDT, July 5, 2006
SAN FRANCISCO -- Intel Corp., the world's biggest chip maker, said Wednesday its venture capital arm would invest $600 million in a wireless Internet services company as part of a $900 million deal that also includes Motorola.
Intel, which is trying to drive the adoption of a wireless technology known as WiMAX, said it would finance Clearwire Corp., which offers wireless Internet services in 200 cities in states nationwide. The investment represents the biggest for Intel Capital, which funds fledgling businesses that have the potential to accelerate demand for the personal-computer chips it sells.
Like is wireless cousin Wi-Fi, WiMAX delivers high-speed connections without requiring a computer to be tethered to a cable. But WiMAX has a significantly longer range that can stretch for miles rather than the 300 or so feet allowed by Wi-Fi.
Starting next year, Santa Clara-based Intel plans to include WiMAX capabilities in select versions of Centrino, a package of chips designed to extend the battery life in notebook computers and to make it easier for them to connect to wireless networks, said Sean Maloney, vice president of Intel's mobility group.
Piggybacking off the popularity of Wi-Fi, Centrino became Intel's fastest growing product in more than a decade, and Intel is hoping to reap similar results based on the newer technology. Intel eventually plans to makes WiMAX a standard part of Centrino and possibly other products, he said.
"Our goal is that in two to three years time Wi-Fi and WiMAX will start to merge and you'll get the same chip doing both," Maloney said in an interview.
Wednesday's deal calls for Motorola and other investors to fund the remaining $300 million. Maloney declined to say how much Motorola was contributing or to name the other funders. Motorola will also acquire a Clearwire subsidiary for an undisclosed amount.
Kirkland, Wash.-based Clearwire was founded by Craig McCaw, an entrepreneur behind several companies offering wireless services, including McCaw Cellular Communications, which was eventually bought by AT&T Inc. and turned into AT&T Wireless.
Earlier Wednesday, Clearwire withdrew plans to proceed with a public offering of its stock that could have raised as much as $400 million. Ben Wolff, Clearwire's co-chief executive, said the decision was based on "fairly significant changes" to the company's business brought about by Wednesday's funding announcement.
UNW
unwired group limited
