Intel takes a stake in Proxim
By Bloomberg News
Special to CNET NEWS.COM
April 28, 1999, 5:15 p.m. PT
Intel said it took a 2.9 percent stake in Proxim with plans to jointly develop wireless home
networking products.
Intel said it bought 320,000 shares of Mountain View, California-based Proxim, worth $10.4 million at today's
closing price. It also has a warrant to buy an additional 96,000 shares. Intel, the world's largest chipmaker, has
made a string of investments in recent months aimed at developing technologies or gaining access to new
products.
Intel earlier this year agreed to buy networking chipmaker Level One Communications to gain products outside its
traditional microprocessor market. Intel, whose chips run 90 percent of the world's personal computers, has an
active venture capital group that invests in companies with new technologies that it hopes will boost demand for
PCs.
"Intel wants to get out of just the PC business and get into networking," said analyst
Bruce Kasrel of Forrester Research. "Plus, if you create a good networking
infrastructure to make it all work better, it will create demand for PCs."
Intel has investments in companies including LogicVision, Micron Technology,
Lernout & Hauspie Speech Products, and PictureTel.
PC unit shipments are forecast to rise only about 15 percent this year. Further, prices
are plummeting, which puts pressure on profits. Intel is constantly looking for ways to
get into faster-growing markets as well as boost demand for PCs.
Intel and Proxim will work on developing wireless products that help link home
computers and other consumer devices. Proxim also makes products for corporate
customers.
Forrester expects the home-networking market to rise to as much as $2 billion by 2002 from just a "couple
hundred million dollars" now.
Santa Clara, California-based Intel jumped into the home-networking market earlier this month when it unveiled
its AnyPoint system, which links together multiple PCs in homes using existing phone lines.
Intel has been especially interested in networking investments, whether taking a stake or making acquisitions,
because it's a much faster-growing market than personal computers. Intel's $2.2 billion acquisition of Level One is
the largest in the company's 31-year history.
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