Tomorrow Intel Corp. (Nasdaq: INTC) will launch its first 802.11b wireless LAN chipset in a ceremony in New York City, the capital of the world.

We expect pomp, ceremony.

However, despite the $300 million that Intel has set aside to promote the Centrino brand as the WLAN equivalent of the Pentium desktop processor, the chipmaker is not blazing a trail in this market.

In fact, Intel is lagging (gasp!) behind rivals like Agere Systems (NYSE: AGR/A), Atheros Communications, and Broadcom Corp. (Nasdaq: BRCM), which are delivering chipsets that support shiny new WLAN standards such as 802.11a (54-Mbit/s over the 5GHz band) and 802.11g (54-Mbit/s over 2.4GHz), as well as the older b standard (11-Mbit/s over 2.4GHz) (see Agere, Broadcom Blitz 802.11g and Atheros First With Multimode). Intel's Centrino chipset only supports ye olde 802.11b spec.

Intel originally said that it would come out with a dualmode a and b chipset sometime towards the end of last year (see Intel Plots Home-Grown 802.11). The b product's timetable slipped 'til March. However, Intel says that the combined chipset is now not expected until late summer.

A quick look at the components on the Centrino chipset gives an idea of how close Intel was to going with a dualmode system. The 802.11 components are all housed on a mini-PCI card on the motherboard. Intel has built an 802.11 baseband controller and media access control (MAC) layer onto the card. It is sourcing the 2.4GHz 802.11b radio from Philips Electronics NV.

So far, so standard.

However, along with the b components on the card sits an 802.11a baseband controller and MAC layer. All that would be required to make the Centrino chipset a dualmode system is the additional of a 5GHz radio.

However, Intel decided that it would develop its own 5GHz RF chip for Centrino, rather than buying them in from companies like Atheros Communications, as it normally does.

This chip is what's holding up Intel's development of an a product.

It's a decision that has left some analysts baffled. "They haven't done RF technology before -- it's not what they do," baffles IDC analyst, Ken Furer. "They clearly haven't got it right yet.""It’s a pride thing," Furer adds. "I think they thought they were going to be a wireless LAN player and it hasn't happened." He expects the chipmaker to eventually admit defeat and partner with -- or acquire -- a specialist RF chip company (see It's WLAN Seduction Season for more on this).

However, Intel says that there are good reasons for it to develop its 5GHz radio chips. "A lot of it has to do with saving power," says company spokesman, Tom Potts. By gaining RF experience now, he says, Intel will be able to shrink multi-component WLAN systems onto one chip in the future.

Beside, Potts contends, you don't need more than b on the client side right now to get connected. "B is going to be the prevalent solution for the next couple of years," he says.

Competitors like Atheros dispute this, pointing out that the actual life of a notebook computer is three to five years, so that OEM vendors need to support the faster standards now if they don't want their products to become obsolete. As evidence of this, the startup points to the deals it recently signed with four of the top five laptop OEM manufacturers to supply them with its multimode chipsets.

— Dan Jones, Senior Editor, Unstrung