Intel Gives Clearwire $600 Million To Avoid Making WiMax Look Bad
from the how-it-all-works dept
If you've watched Intel's moves over the last few years in the WiMax space, it's become clear that they can't let the technology fail, despite plenty of questions about the technology. Intel has made a huge bet in the space, and over the last couple of years has single-handedly propped up the WiMax market by investing in just about every player in the space -- even those who some might consider Intel competitors. Some of this was clear nearly two years ago when Intel made a huge "investment" in Clearwire -- Craig McCaw's attempt to build a WiMax-based wireless ISP (using pre-WiMax equipment, of course). That deal seemed particularly questionable since the investment came the same day that Clearwire promised to buy Intel equipment. In other words, Intel was paying Clearwire to buy its WiMax technology. Of course, for all the hype about WiMax, Clearwire has been saying that the technology is so weak that it can't withstand people using VoIP services on it. A couple months ago, Clearwire announced that it would go public to raise a necessary $400 million. The details in the IPO filing raised a lot of questions. It didn't have very many customers and needed an awful lot of money to keep spending on infrastructure. All in all, a bad combination. Combine that with Vonage's weak IPO, and you could see problems on the horizon. It seemed unlikely that Clearwire could go out successfully. For Intel, that would be devastating. A bad IPO for Clearwire would raise a lot of questions about both WiMax as a technology and the billions Intel has bet on the technology. So what does Intel do? It throws more money after the problem, dumping $600 million more into Clearwire (and roping Motorola in for another $300), allowing Clearwire to pull its IPO. Problem solved (or, at least, delayed).