10Meters News Report

March 22, 2001 – News that Intel will shift from HomeRF in favor of the competing Wi-Fi wireless networking standard for its next-generation consumer devices caused shares of Proxim to plummet 40 percent Wednesday, closing at $9 after dipping as low as $5.63.

Despite the avalanche, Proxim, a primary supporter, provider and licensee of HomeRF technologies, downplayed the impact of Intel's shift in allegiance.

CEO David King

In a telephone press conference yesterday, Proxim Chairman, President and CEO David King said "the future of HomeRF is bright" – and so is "the future of Proxim."

Adding that he was "baffled" by the stock market reaction, King told the telephone audience that his company will recover from Intel's change of heart by the second half of this year.

King said the recovery was based on the fact that Intel's plans to adopt a dual strategy was already understood – and in turn reflected – in Proxim's budget forecasts.

King also said that "it is not true that Intel is dropping out" of the HomeRF camp. "It will continue to sell (version 1.0)."

King, who was traveling in Germany on his way to CeBIT where Proxim will demo HomeRF version 2.0, turned over the conference to two major HomeRF supporters, Siemens and Motorola. Spokesmen for both companies reiterated their continued support for the platform.

The key drivers for their support were the voice capabilities that HomeRF supports, and Wi-Fi does not, and the moves to position HomeRF through the telecom provider channel.

Siemens said that it will be introducing HomeRF solutions at trade shows this summer, and will begin "field trials" by summer's end. Also planned: a broadband gateway using HomeRF in the fourth quarter.

Motorola said it would be supporting HomeRF "now and in the future," also citing its Voice-over-Internet capabilities as well as HomeRF's ability to overcome bandwidth interference that Wi-Fi has yet to address.

The two networking platforms reside on different low-level spectrums. Wi-Fi, an outgrowth of 802.11b (see "Bluetooth and 802.11: A Tale of Two Technologies"), resides on spectrum shared by microwave ovens and Bluetooth.

Currently, Wi-Fi products can communicate at 11 megabits per second, while today's HomeRF products work at 1.6 megabits.

However, the Federal Communications Commission last August ruled, in what was termed a landmark victory for Motorola, Siemens and Proxim, that HomeRF subscribers could increase transmission speeds to 5 Mhz.