It's All In the Branding

By Eric Griffith

March 12, 2004

When it comes to embedded Wi-Fi, no one can touch Intel...but the rest of the market for chip makers is wide open.

Thanks to Intel's $300 million dollar advertising campaign trumpeting the Centrino brand name over the last year, buyers of laptops are now expecting Wi-Fi connectivity to be part of the hardware. The major beneficiary of this is, of course, Intel.

According to Allied Business Intelligence (ABI), a research firm located in Oyster Bay, N.Y., for the foreseeable future the strength of the Centrino brand -- which can only be used on laptops that combine Intel's Pentium-M, 855 Chipset , and the company's miniPCI-based embedded Wi-Fi card -- will make Intel untouchable in the market for laptops with built-in 802.11.

"Since Intel started the Centrino branding campaign, everyone seeing it thinks of Wi-Fi in laptops as synonymous with Centrino," says ABI's senior analyst Philip Solis. "The ad campaign was purposefully vague" by not coming out and talking about the wireless technology, thus making many mainstream users think of Centrino before they think of the term Wi-Fi.

Solis says laptop sellers know this brand and that they'll look for it. ABI expects Intel's market share to grow by about 30% more this year based on demand.

To date Centrino laptops have been only sold with 802.11b built in, the slowest Wi-Fi standard there is. Later this year Intel will ship Centrino with dual-band 802.11a/g support, and is just getting around to shipping the 54Mbps 802.11g standard inside.

All this Intel leadership is likely to be limited to one form-factor though: miniPCI cards. When it comes to other types of adapters (the traditional PC Cards used in laptops, or even external USB and internal PCI adapters for desktops) or infrastructure equipment like access points and routers, the other chip makers have a more open playing field. (See "Understanding Internal 802.11 Card Form Factors" for the differences between the hardware types.)

Of the various Wi-Fi silicon makers, Solis thinks Broadcom and Conexant Systems (which recently merged with GlobespanVirata and absorbed the PRISM line of chips) have the most to gain.

"They're very strong -- they don't just do Wi-Fi, but they do other network ICs [integrated components]," says Solis. He believes the work Conexant and Broadcom can do with integration of products -- like broadband modems for cable or DSL with Wi-Fi -- will keep them robust.

Broadcom in particular enjoys strong branding already and was the first to market with a coup -- a single-chip solution for Wi-Fi.

Atheros Communications -- which recently had a successful Wall Street IPO, a rarity in the Wi-Fi world -- could have a tougher time. It concentrates on doing only Wi-Fi chips. Solis says while "there is a danger in not being broadly based... That's something that could be solved with a strong partnership."

Buyouts -- either Atheros buying someone or getting bought -- are also "something to watch for." Atheros chips can be found in a number of Wi-Fi "switch" products that are now on the market.

Companies that concentrate on Wi-Fi chips in a particular niche, such as video broadcast -- vendors like IceFyre and Bermai -- will likely do very well, especially in the home market.

Solis things most of the companies mentioned above will do well in products for consumers. Enterprise could be another matter.

Agere Systems , which was once a powerhouse in Wi-Fi overall, has been relatively quite since it sold its wireless equipment business. Solis says that the company's chips have great range and high quality, great for businesses that have multiple users per access point, but "can't compete directly with Broadcom and Conexant" in SMBs, SOHOs or the consumer markets. Frank Ferro, director of Wi-Fi marketing for Agere Systems, counters by saying that Intel's 2003 market share for Centrino was strong, but not overwhelming. While his company might not be able to out market Intel, it can out do Intel technologically-- for instance, Agere is already shipping a dual-band 802.11a/b/g solution in miniPCI form factor.

"You have to respect Intel from [a marketing] standpoint. But we can stay stay a quarter or two ahead of Centrino," says Ferro.

ABI says the future for mind-share in Wi-Fi has proven to be Intel's battle to lose as consumers continue to drive the market. Without strong branding campaigns (or at the very least strategic supply partnerships with key OEMs), other chipmakers may find themselves forgotten before they get a chance to be a household word.

ABI Research will present further data on this topin in May with its next Wi-Fi Quarterly Service report.



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