Headline Feeds
Chipmaker Intel (Nasdaq: INTC) has forged an alliance with Linksys, the home and small office networking provider recently acquired by Cisco (Nasdaq: CSCO) as part of that company's push into emerging markets.
The partnership calls for Intel and Linksys to share technology and combine their efforts to sell products to the small- and home-office market. The effort will focus on Linksys' wireless routers and Intel's Centrino mobile computing chip, with testing for compatibility of the two product lines already under way. Verified products are slated to become available later this month.
"Partnerships are one of the keys to the future success 
of the networking industry," Cisco CEO John Chambers said in a statement. "The combination of Intel, Linksys and Cisco technologies helps to fuel wireless adoption in the home and enterprise markets, which are major areas of growth for the industry."
Cisco's Role
Cisco purchased Linksys in March for US$500 million in stock and has since said the deal will serve as the foundation for a major push into the small office, home office and home networking space. Cisco also has expanded its alliance with IBM (NYSE: IBM) in the storage networking arena.
Bill Rossi, a Cisco vice president in the wireless networking unit, told the E-Commerce Times that the Linksys purchase gave Cisco, which has long been seen as the last name in enterprise networking, instant cachet in the home and small office space and a leg up on competition as wireless networks gain traction.
"They clearly dominate the market for wireless networking in the home and for the small business space, which is huge," Rossi said. "We see smaller wireless networks as one of a handful of rapidly emerging markets that we are realigning our business to capture."
In addition, the networking giant probably is eager for news that will distract attention from a serious security flaw that some experts warn could lead to crippling attacks on the Internet backbone.
Jumping-On Point
Additional engineering work between the two companies will focus on enabling Intel Centrino-loaded notebook computers to detect Linksys networks and automatically configure themselves to access the Internet via those networks. The two companies hope this technology will become available sometime next year.
Intel president Paul Otellini said rapid adoption of the Centrino processor, which was released earlier this year, shows that users want truly portable Internet access. Combining Centrino with Linksys creates "a powerful combination in the effort to broaden the use of wireless broadband," he added.
The new agreement extends development work that Intel and Linksys had undertaken before Cisco bought Linksys.
Raising Profile
IDC analyst Alan Promisel said Intel needs to be able to demonstrate to consumers the immediate benefits of choosing Centrino, which adds hundreds of dollars to the price of most notebook computers, over its other processors. Although the number of WiFi access points is growing, not everyone is sold on this technology, he added.
"The early adopters have rushed to grab Centrino, but to get mass-market adoption is going to take more of a marketing push," Promisel told the E-Commerce Times. "Consumers who are setting up wireless networks will gravitate toward systems if they know they are compatible from the outset."
Talkback: 
