Intel abandons UWB design effort

Intel Corp. ended its five-year research effort in ultrawideband. The news is another blow for the emerging technology for which support is tightening in the face of an expected recession.

UWB start-up WiQuest Communications closed its doors on Friday. On Monday (Nov. 3), start-up Alereon Inc. bought the UWB assets of Stonestreet One, a software developer, adding less than ten people to Alereon's 60-person staff.

To date, ultrawideband technology has been plagued by problems seemingly on every front—performance, power, price and global regulations—with significant market penetration still at least a year away, according to some observers. In the meantime, analysts and participants alike said they expect more closures and consolidation moves.

Intel launched an internal UWB design effort about five years ago under its new business initiatives group. About a month ago, Intel decided to scrap the effort after a regularly scheduled review by the company's product groups failed to find a sponsor for the design team.

"It was a typical make-versus-buy decision," said Stephen Wood, a technology strategist in Intel's corporate technology group who also serves as president of the WiMedia Alliance that promotes and sets compliance standards for UWB products.

Intel business groups determined they could source UWB technology from outside company if they need it. Intel has investments that give it access to intellectual property in two UWB start-ups including Staccato Communications, which recently rolled out a second-generation device.

One source who asked not to be named said Staccato could be one of the next UWB start-ups to fold because it has as little as two months of financing left. Staccato's chief executive said in early September the company was funded at least through the end of the year and a new round of funding was in the works with existing investors.

Staccato has absorbed three rounds of funding totalling about Rs.225.16 crore ($45 million) to date. The last round closed in January 2006.

Artimi Corp. is another UWB start-up rumoured to be a likely casualty of the shakeout. The company closed it last funding, a Rs.157.61 crore ($31.5 )series B round, in March 2007.

Calls to the company were not immediately returned, and a visit to its office found no one home, although the office management company said Artimi has not informed it of any plans to shut down.

Several sources suggested companies who need funding in the next year or so are the most at risk. Venture capitalists are tightening their belts in anticipation of a recession, a fact highlighted in a presentation from one top VC firm that said start-ups must make cuts and become cash flow positive.

"Overwhelming the issue [with the UWB shakeout] is one of dealing with an ungodly bad economy," said Wood. "The VC community is being very conservative in funding these programs," he added.