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Next Intel bundle frontier: Home

Chipmaker plans Pentium derivatives, communication chips for consumer electronics to build on successful Centrino bundles.

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By Michael Kanellos
Staff Writer, CNET News.com

Intel wants to repeat the Centrino experience in the living room.

"Digital home is probably the next place," where Intel will create a Centrino-like brand and product bundles as part of its new so-called platform strategy, Anand Chandrasekher, the new director of sales and marketing for Intel, said during a brief interview at the launch of a new version of Centrino, code-named Sonoma, in San Francisco.

For most of its history, Intel largely sold its products individually. PC manufacturers could qualify for larger-volume discounts if they purchased the company's chipsets along with its processors, but these products were generally looked at as separate items.

With Centrino, Intel bundled three chips—a Pentium M processor, a chipset and a Wi-Fi receiver—into a package and provided additional compatibility testing.

The plan apparently worked. Considerably more than half of the Pentium M laptops come with the full Centrino bundle. In just about two years, Intel has garnered about $5 billion in revenue from Centrino. The world's population of notebooks is expected to double from 2004 to 2008.

Centrino also paved the way for Intel to boost its revenue from communication chips, a market it had tried to penetrate for years with only middling success.

Earlier this week, Intel unfurled a broad reorganization to promote unified product plans for particular markets, such as health care or the home. Under the reorganization, Chandrasekher moved from running the notebook division to overseeing sales for the company and helping run marketing with Eric Kim, who came over from Samsung.

Although Intel has not fleshed out its plans for consumer electronics, executives have already said it is developing Pentium chip derivatives for home electronics. Communication chips will also be part of the effort.

"You will see a big push in communications across the board," Chandrasekher said.

Elsewhere at the Sonoma launch, Intel execs stated that notebooks will continue to expand in capabilities.

"We will start seeing WiMax getting integrated into notebooks at the end of '06 and '07," said Mooly Eden, vice president of the mobility group at Intel. "We are looking at other technologies, like UWB," or ultra wideband.

WiMax is a long-range radio technology that allows a notebook to connect to the Internet via a base station several miles away. WiMax is expected to make it cheaper for access providers to set up national wireless data networks. The technology isn't incorporated now because the infrastructure doesn't exist in the outside world.

By contrast, UWB lets consumers swap large files, like movies, rapidly over a few meters. Notebook makers can stick a UWB chip into notebooks now, but the technology likely won't take off until it can be integrated without much additional cost into existing chipsets, Eden said.

Standard wireless access will also become pervasive.

"We will have 100 percent attach rate with Wi-Fi" in the relatively near future, Eden said.

With the latest crop of notebooks, Intel and others will promote laptops as portable voice over Internet Protocol phones. "Wireless VoIP is a very significant development in the industry," said Bill Rossi, vice president of the wireless-networking business unit at Cisco Systems. Cisco, one of the larger proponents of VoIP, recently came out with a third version of a compatibility specification so notebooks can more easily connect to its equipment.

Along with promoting different applications for wireless notebooks, Intel will also continue to improve its notebook silicon. Next year, the company will introduce Napa, a new bundle of notebook chips to replace the Sonoma-Centrino bundle that came out today. Napa will include a dual-core chip, code-named Yonah, that will provide more performance but consume about the same amount of energy.

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