Intel cancels ultrawideband design effort

UWB startup WiQuest Communications (Allen, Texas) closed its doors on Friday (Oct. 31). On Monday (Nov. 3) startup Alereon Inc. (Austin) bought the UWB assets of Stonestreet One, a software developer, adding less than ten people to Alereon's 60-person staff.

To date, ultrawideband technology has been plagued by problems seemingly on every front-- performance, power, price and global regulatory conflicts with significant market penetration still at least a year away, according to some observers. In the meantime, analysts and participants alike said they expect more closures and consolidation moves.

Intel launched an internal UWB design effort about five years ago under its new business initiatives group. About a month ago, Intel decided to scrap the effort after a regularly scheduled review by the company's product groups failed to find a sponsor for the design team.

"It was a typical make-versus-buy decision," said Stephen Wood, a technology strategist in Intel's corporate technology group who also serves as president of the WiMedia Alliance that promotes and sets compliance standards for UWB products.

Intel business groups determined they could source UWB technology from outside company if they need it. Intel has investments that give it access to intellectual property in two UWB startups including Staccato Communications (San Diego) which recently rolled out a second-generation device.

One source who asked not to be named said Staccato could be one of the next UWB startups to fold because it has as little as two months of financing left. Staccato's chief executive said in early September the company was funded through the end of 2009 and a new round of funding was in the works with existing investors.

Staccato has absorbed four rounds of funding totaling about $63 million to date. The last round was for $17.5 million and closed in October 2007.

Artimi Corp. (Mountain View, Calif.) is another UWB startup rumored to be a likely casualty of the shakeout. The company closed it last funding, a $31.5 series B round, in March 2007.

Calls to the company were not immediately returned, and a visit to its office found no one home, although the office management company said Artimi has not informed it of any plans to shut down.

Several sources suggested companies who need funding in the next year or so are the most at risk. Venture capitalists are tightening their belts in anticipation of a recession, a fact highlighted in a presentation from one top VC firm that said startups must make cuts and become cash flow positive.

"Overwhelming the issue [with the UWB shakeout] is one of dealing with an ungodly bad economy," said Wood. "The VC community is being very conservative in funding these programs," he added.