Some things just go together like peas and carrots. You know -- franks and beans, macaroni and cheese, tequila and aspirin. In the corporate world, such pairings are not so straightforward. They often take on complex flavors with terms like "synergistic joint venture."
But there's nothing too complex about silicon giant Intel (NASDAQ:INTC) teaming up with telecom service provider Sprint (NYSE:FON), a development announced yesterday.
The agreement with Sprint is focused on an important area of future growth for Intel -- wireless broadband products. Intel is looking to become the big cheese in wireless silicon by pushing open-standard wireless technologies such as the existing Wi-Fi and the forthcoming WiMax.
The so-called third-generation (3G) WiMax is the focus of the partnership with Sprint. The two companies have pledged to work together to put the mobile version of this new technology through its paces and test capabilities. Intel just released its first WiMax chipset, and the company has been spending millions to build a following for the technology. The first implementation of WiMax, however, includes only fixed applications, in which multi-megabit streams of data are sent between stationary points miles apart.
What Sprint is considering is how the fixed and mobile versions of WiMax will fit with its offerings to customers. If the merger with Nextel (NASDAQ:NXTL) goes through, and neither company has to divest significant portions of spectrum, the new Sprint will own a significant share of regional licenses in the 2.5GHz band. This band is likely to be used for advanced mobile wireless services around the world, and many see WiMax as a natural fit.
A lot of hype still surrounds WiMax, though. Many people are promoting it as a potential "3G killer." That means it could marginalize current high-speed wireless networks, such as Verizon's (NYSE:VZ) and soon Sprint's own network upgrade to Qualcomm's (NASDAQ:QCOM) EV-DO technology. In reality, though, WiMax is too far from commercialization to tell whether the mobile version can be used effectively to take share directly from 3G mobile services.
Like the now-mainstream Wi-Fi technology, however, open-standard technologies have a way of catching on with consumers, especially when the costs for equipment drop close to nil. While very little may change tomorrow, the fight to dominate mobile broadband toward the end of the decade will prove very interesting.
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Fool contributor Dave Mock actually prefers peanut butter and chocolate to peas and carrots. He owns shares of Intel. The Fool has a disclosure policy.
