Founded in late 2003, privately held Clearwire has the ambitious vision of providing large-scale wireless broadband services. Last week, the company received investments of $600 million from Intel
The U.S. broadband market remains ripe for growth. A recent IDC study indicates that about 38.1 million, or just 33%, of all U.S. households subscribe to broadband services. What's more, IDC projects U.S. broadband growth at 18.4% per year from 2004 to 2009.
So why bet on Clearwire winning in this market? First, the company's founder and co-CEO is wireless pioneer Craig McCaw, who in 1994 sold McCaw Cellular to AT&T for $11.4 billion. At Clearwire, he has assembled a stellar management team with extensive senior-level backgrounds at companies like Nextel, Nextel Partners, and AT&T
Clearwire has also built a next-generation network infrastructure, merging the best features of cellular, cable, DSL and WiFi. The system is mobile, fairly easy to install on a customer's computer, and high-speed. Its extensive portfolio of the wireless spectrum can potentially cover 157 million people.
Motorola will own Clearwire's wireless equipment business. The communications company currently sells so-called WiMAX equipment, which helps support wireless broadband services at speeds up to 70 megabits per second and a broadcast range of up to 30 miles. Now, Motorola will provide WiMAX equipment to Clearwire.
As for Intel, it's no secret that the company wants widespread adoption of its WiMAX chips, including the Rosedale 2 chips it announced several weeks ago. Clearwire provides an ideal platform for wider WiMAX adoption.
That makes the $900 million investment a win for all involved. Clearwire no longer needs to tap the IPO market, which has become increasingly difficult for tech companies, as seen with the dismal performance of Vonage
Intel and Motorola, meanwhile, get instant adoption of their next-generation technologies. This may spark the interest of other prospective customers; for example, Sprint
Read more about Clearwire in a past installment of our Baby Breaker Birth Announcements.
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Fool contributor Tom Taulli does not own shares mentioned in this article. Intel is a Motley Fool Inside Value pick, while AT&T was a former Motley Fool Stock Advisor pick. The Fool has a disclosure policy .