Summary
Intellon is a leader in powerline networking, which enables each outlet in a home or small business to be used as a network port, using the pre-existing electrical wiring. Atheros, a leader in WiFi networking chipsets, has acquired Intellon for $244M.
Analysis
Intellon is a leader in powerline networking, which enables each outlet in a home or small business to be used as a network port, using the pre-existing electrical wiring. Atheros, a leader in WiFi networking chipsets, has acquired Intellon for $244M. Why would a wireless vendor seek a seemingly competing wired technology?
The thing is, powerline networking is not a competitor to wireless, but rather, the two are complementary. Applications such as video streaming, where the absence of interference from cordless phones and microwave ovens, and where the television set is not being moved around, are better served through powerline technology. Mobile applications such as using a notebook PC from the back yard or poolside, are better served with wireless. Since a household of 4 people may have different individuals doing different things on their network at once, an advanced home network will necessarily have both technologies.
Powerline networking is available in speeds of 14, 85, and 200 Mbps, with greater speeds on the horizon. The linkage of Intellon to Atheros' channel and sales force will greatly accelerate the deployment of powerline into game consoles, PCs, home networking equipment, and CE devices. The lack of an extensive and international sales channel, combined with a lack of engineering resources to move powerline chips down to smaller and faster semiconductor process sizes, has been a bottleneck that will now soon be relieved.
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
