Intel Corp.‘s first-quarter profit jumped 25 percent, driven by strong demand for microprocessors used in notebook computers and lower-than-expected costs associated with manufacturing and new technologies.
The world’s largest chip maker also said it expects second-quarter sales to be between $8.6 billion and $9.2 billion, which would be in line with Wall Street expectations. The chip king’s strong quarterly results show how fast it’s moving to counter its rival’s 64-bit edge. They also spread hope for the tech sector.
Furthermore, the outlook for Intel looks promising both financially and technology wise. Alike one of the chipmaker’s ultra fast technology WiMax, could transform the broadband landscape.
WiMax, a technology that can provide wireless broadband coverage over an area of twelve to 16 kilometers vs. Wi-Fi’s 90 meter, is about to take off. The industry is expected to approve its first WiMax standard this July. And, when more flexible versions of WiMax are approved in 2006 that allow for wireless broadband access anywhere, sales of WiMax gear are expected to shoot through the roof.
Intel is gearing up for WiMax’ world premiere. As early as Apr. 18, the company will start turning out a new generation of chips that it hopes will turn WiMax into the Next Big Thing in the wireless Web. Thanks to Intel’s outsize market power, analysts expect a range of WiMax services to spring up over the next few years, offered by everyone from biggies such as SBC Communications and Comcast to minnows such as Clearwire Technologies, it could transform broadband by bringing high-speed service to millions more people around the globe, allowing Web surfers to roam at will and cutting subscription rates as new players pile into the market.
Since the late ’90s, techies have dreamed of beaming high-speed Internet over the airwaves. Several companies attempted to launch precursors to WiMax but never got off the ground. The infrastructure was too costly, and the competing technologies suffered a lack of common standards.
Now along comes Intel, which aims to duplicate its successful Wi-Fi strategy. In 2003 the chipmaker rolled out its Centrino line of Wi-Fi chips, a move that helped bring the wireless home network to tens of millions. In that case, Intel used its market clout to convince its core customers — PC makers — to adopt Centrino as a standard.
With WiMax, Intel has had no such advantage. It had to bring on board telecom companies, which aren’t traditionally Intel customers: They’re the ones who will sell the service. So the chipmaker created a WiMax forum with such heavyweights as SBC, Sprint, and Nokia to hammer out common standards for its chips. To start with, WiMax, which Intel says will be up to six times faster than existing broadband service in the U.S., will be used to bring high-speed Internet to homes and businesses that lack service. But in a couple of years, WiMax will go mobile, allowing people to download movies, games, and other content without being tethered to a local hot spot, as Wi-Fi requires.
Big players will be able to enter each other’s territories, too. For example, in February a Verizon Communications Inc. subsidiary, Verizon Avenue, began offering a WiMax-like service in Monterey, Calif., a market currently served by rival SBC. Time Warner Inc., Comcast Corp., and other cable providers could make use of WiMax to deliver content outside the home. That would provide competition for cellular providers, some of which also aim to sell WiMax services alongside existing high-speed mobile networks.
However fierce the new round of competition WiMax sets off, consumers are likely to enjoy it.
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