Last updated at: (Beijing Time) Friday, March 12, 2004
China's new wireless standard met with Intel resistance
Intel - the No.1 computer chip producer said on Tuesday to the press through its spokesperson that Intel won't be able to support China's newly-issued WAPI security standard. This means that Intel is quite likely to withdraw from WLAN equipment market, which provides another computer chip producer - AMD with a good chance to have an expansion in the Chinese market.
Intel - the No.1 computer chip producer said on Tuesday to the press through its spokesperson that Intel won't be able to support China's newly-issued WAPI security standard (which involves products such as beep pager and laptop computer). This means that Intel is quite likely to withdraw from WLAN equipment market, which provides another computer chip producer - AMD with a good chance to have an expansion in the Chinese market.
Intel strikes up a discordant tune
Out of security consideration China's Certification and Accreditation Administration issued Implementation Rules for Compulsory Certification of WLAN products, which began to take effect on Jan. 1 2004. Once past the grace period WLAN products being sold on the Chinese market must comply with Chinese WAPI security standard otherwise they will be banned from the market. Only 24 Chinese companies hold the encryption technique of WAPI security standard.
But the Chinese government's policy met with the resistance of foreign companies such as Intel, which sells wireless broadband LAN products. On Tuesday Liu Jie, spokesperson of Intel's China Branch, said to the press that according to the experience during the recent period and judging from the technical point of view Intel would follow international standards set by Wi-Fi Alliance. Intel is unable to find a program that can support China's new wireless standard. Intel also believes that any standard that is not compatible with the international standard is unlikely to have competitive power.
This is a major policy change for Intel since China first put forward the wireless standard. Before this the official stand of Intel's China Branch was that "Intel is having active discussions with the Chinese government, the relevant institutions and companies, and is communicating with the government on various issues such as techniques, hoping to further understand the specifications and resolve this problem by June 1.
Centrino users will be affected
The stand taken by Intel's China Branch implies that Intel will probably stop exporting Centrino chips and Intel Centrino chip package technique to China after June 1. In the meantime theoretically the Centrino laptop technique promoted by Intel as well as thousands upon thousands of Centrino laptop users in China won't be able to get security guaranty after June 1.
Liu Jie said: "Intel is unable to reach an agreement with the Chinese companies authorized by the Chinese government nor is it possible to find out a practical way to guarantee the quality in the execution of the cooperation."
Insiders analyzed why Intel is unwilling to comply with China's national standard is because it's reluctant to pay Chinese companies the expensive licensing royalties. Under the new wireless standard, foreign companies can only cooperate with the 24 Chinese companies with the encryption technique in order to get authorizations relating to the Chinese wireless technique. This involves the cost of authentication.
Intel has strong backups
Behind Intel, the first and foremost supporter is the Wi-Fi Alliance. In an email that Intel forwarded to a reporter, Eaton, chairman of Wi-Fi Alliance, said for the moment it is impossible to accept the Chinese standard. If compromise cannot be reached by 1 June 2004 the Wi-Fi will consider boycotting the export of Wi-Fi products to China. Eaton said as a spokesman of commercial companies which put the market interests above everything else, the interest alliance has to play a role of "the most unpleasant and the most uncompromising" in it.
In the meantime the US government also expressed its stand on this issue. Last week, the US State Secretary Powell, Commerce Secretary Evans and Trade Representative Zoellick sent to the Chinese government letters in regard of the question on the national standard of WLAN, hoping that the Chinese government would lift the restriction on the import of non-WAPI standard wireless products. This is a very important reason that Intel suddenly assumed a strong stance.
The downstream computer chip companies are reluctant to air their views. On Tuesday Legend's spokesperson said: "without any instructions it is no good for me to comment on this." IBM only gave a principled answer: "IBM supports open standard." Hewllet-packard said, it has learned of the event and its opinion on the question will be released after the senior officials hold consultation.
There are also some laptop-companies that see a big business chance in China's implementation of the new wireless standard. Zeng Wenqi, general manager of Mainland Branch of BenQ, explicitly stated his attitude: "support the new wireless standard and will soon put out laptop computers that satisfy the national standard."
AMD intends to replace Intel
The policy change of Intel means a god-given opportunity for AMD. Though Karen Guo, vice president of AMD and general manager of AMD's China Branch, didn't speak of Intel's decision on Tuesday, it is learned that Guo also believes this to be a great opportunity for AMD. Days ago AMD suddenly geared up for the Chinese market by putting massive amount of its 64-bit CPU on the shelves.
Yesterday in electronic markets like Dinghao and Hailong, AMD's Athlon643000+CPU plus Soltek mainboard were sold at a special price of 2,800 Yuan. Compared to the 2,500-2,600 Yuan quotation for Intel's 3.06G CPU plus Intel mainboard, it has certain competitive leverage. Sales agents said: "supply is guaranteed and price negotiable."