SANTA CLARA, Calif. -- Continuing to evolve its communications business, Intel Corp. has quietly formed a new division to attack the consumer-oriented Digital Subscriber Line (DSL) and home-networking markets.
The new division will focus on developing chip- and systems-level products for OEMs in the asymmetric DSL (ADSL) and home-networking areas. But while Intel plans to make a big push in ADSL, the company will cease the development of its business-oriented, symmetric DSL (SDSL) chip lines.
Intel will no longer push or develop chips based on a pair of SDSL standards--high-bit-rate DSL-2 (HDSL-2) and G.shdsl. These products were being developed at its former Level One Communications operation.
Intel will continue to push its home-networking system lines, but will migrate its products towards a wireless standard called 802.11b. It is moving away from products that support two other networking schemes--Home RF and the Home Phoneline Networking Alliance (HPNA).
The moves are part of a plan to re-focus but strengthen its strategy in the residential broadband arena, said Chad Taggard, general manager of the newly-formed Residential Access Division at Santa Clara, Calif.-based Intel.
Intel also plans to become a leader in ADSL and home-networking, Taggard said. With its vast resources and marketing might, the company will present some major challenges, if not headaches, for its competitors, he said.
"We are trying to expand our penetration in the residential markets," he said in an interview. "Our strategy is to develop silicon-level, board-level, and systems-level products on the CPE (customer-premise equipment) side."
The new Residential Access Division (RAD) combines two former and separate operations within Intel--the Broadband Access Division (BAD) and Home Networking Organization (HNO). BAD was developing ADSL chips, while HNO was in charge of Intel's home-networking product line.
The changes are also part of a major reorganization within Intel's communications business. Last March, the company combined its separate systems- and chip-level operations under one roof, as part of a major plan to focus and attack the OEM business (see March.16 story ).
But in no way is Intel retrenching from communications, especially after making a slew of major acquisitions in this space. Earlier this week, for example, it moved to boost its presence in the optical networking market by separately acquiring three chip makers (see April 24 story ).
Intel is also evolving its broadband access strategy as well. In early 1999, the company acquired Level One Communications Inc., a Sacramento, Calif.-based supplier of communications chips, for $2.2 billion.
Level One's access-oriented products included chips based on a business-oriented SDSL technology called HDSL-2. Level One was also working on chips based on a competing, multi-rate SDSL technology called G.shdsl.
In the small but emerging SDSL chip space, Level One competed against the likes of Conexant, GlobeSpan, Infineon, Metalink, Virata and others.
But in a surprising move, Intel has decided to exit the business-oriented DSL chip market in order to focus on the larger ADSL business, Taggard said. Intel will continue to support the existing customers for Level One's HDSL-2 chip lines, but it will cease development on ICs based on G.shdsl, he said.
"We are no longer focusing our efforts on chip sets for the central-office," he said, adding that the company did not have the resources to focus on both SDSL and ADSL.
Analysts believe that the HDSL-2 standard was doomed, especially after the advent--and ratification--of the G.shdsl protocol last year. While HDSL-2 garnered a small following, Adtran, Cisco, Conexant, Infineon, GlobeSpan and others threw their weight behind G.shdsl, analysts added.
On the ADSL side, Intel sells a line of ADSL modems, based on a chip set from GlobeSpan Inc. of Redbank, N.J.
Last year, Intel entered the ADSL-chip market by acquiring Ambient Technologies Inc. of Fremont, Calif. for $150 million incash makers (see Feb. 3 story ). Ambient--which was developing chips based on a stripped-down version of ADSL called G.Lite--has yet to roll out its first product.
But as reported by SBN last month, the company was said to have scrapped Ambient's line of DSL chips--a move that was considered a setback for Intel (see March 23 story ).
In the interview, Taggard clarified Intel's position in the ADSL chip market, saying the company has not scrapped the product being developed by Ambient.
Intel will not field Ambient's standalone chip based on G.Lite technology. The company is still developing the product, which will support the full-rate ADSL standard, he said. "We are continuing the development of the full-rate ADSL chip set," he said. He did not elaborate, however.
On the home-networking front, Intel is a pioneer and leader in the area. For some time, the company has offered in the retail channel a product that enables customers to connect two or more PCs in a home.
Intel's AnyPoint product line is sold in two formats. One is based on a wireless technology called Home RF, while the other is built around a local-area networking standard called HPNA. Intel's HPNA-enabled products are reportedly based on chips from Broadcom Corp.
Taggard confirmed previous reports that Intel is backing away from HomeRF--as well as Home PNA. "We are shipping [the AnyPoint product based on] HomeRF," he said. "We will continue to support Home PNA."
Instead, the company will "transition our products towards 802.11b," he said. "The bulk of our sales are moving towards wireless."
Consumers have been "confused" in terms of the deployment LAN-based technologies in the home. "Consumers are not confused with wireless," he added. In its wireless product, Intel plans to use its own silicon. Intel and Symbol Technologies Inc. are also developing a chip line that supports 802.11b.