How long will it be before you have serious microprocessor competition in China?
We have always said that China will most likely follow exactly the same playbook as Japan. We're already seeing that starting to play out. Japan had its own vertically integrated companies which were computer and semiconductor and consumer electronics companies. China is going at it slightly differently. They're going at it from sort of a foundry infrastructure and putting that in place with a lot of small design houses. You have seen the attempt to create China-only standards just as there was a whole series of Japanese-only standards.
What's the next one?
I think you will see chipsets, processors and memory…the Chinese model will be: Let's start a foundry, and we will go from foundry to intellectual-property creation and end-user device creation. There's no question of that. But the competition there is exactly the same competition we've seen in our 35 years of existence. We've competed against European companies and Japanese companies and US companies that competed with us directly. Now you're going to add China to that.
But competing with China is an order of magnitude different, if you look at the trade at this point.
On a relative basis, when we were competing with Japan in the 1980s, Japan was probably 10 percent of our market. China today is probably 10 percent of the market. It's not that much different from a market standpoint. There are a lot of parallels between the two.
But that won't be on your watch.
Well, I'll be watching it.
To switch gears a bit, let's talk a little about WiMax. You mentioned that there about 40 to 50 trials in place around the world, and we'll start seeing substantial rollout next year. What will happen to drive that rollout?
A couple of things. I think some of the big service carriers will adopt the technology and roll it out; that's one. And you will see the metropolitan rollout, which is what a lot of the trials are today. People are saying, "Broadband is good, but I can't get broadband from cable or from fibre or from twisted copper. The only way I can get it is through some wireless technologies."
What about some of the cellular-based technologies?
At first blush, everybody says there is competition between cellular-based technologies like GPRS (General Packet Radio Service) 3G and 4G, and WiMax and Wi-Fi. And I tend to see them as more complementary. You are even seeing some people announcing the rollout of Wi-Fi as a spectrum alleviator. That is, if I give you voice-over-IP and get you off of my 3G (third-generation) network, I don't have to expand my 3G network as fast. So it's a service savings. There has been an interesting trade-off in a lot of these instances. I still think the really interesting app is when you have a device that is not just Wi-Fi enabled, but 3G is built in, and ultrawideband and Bluetooth and WiMax (are) built in, and it self-configures.
So what would Intel do to help drive that? Would you have a marketing campaign like the Centrino [wireless] campaign?
Yes. We would have a marketing campaign, an investment campaign from Intel capital; you would see us provide the cost-effective, power-efficient solutions to make that happen. We're obviously playing in the Wi-Fi, wireless, ultrawideband, 3G, WiMax space.
And who puts that $200 WiMax box in residences?
It's a service provider. It's a business. Could be anyone from the metropolitan area to a broadband service provider. There are a lot of service providers looking at this, and it will be a combination of the disruptive service providers and the existing service providers supplying this.
