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TI's magic Wanda
Texas Instruments breaks new ground with its bundling of three technologies into a single chipset.
March 20, 2003: 11:06 AM EST
By Eric Hellweg, CNN/Money Contributing Columnist

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SAN FRANCISCO (CNN/Money) - Back in September, I wrote a column lauding Texas Instruments for its breakthrough designs that reduced from four to one the number of chips needed to operate a cell phone. Looks like the company is at it again.

On Monday, at this year's Cellular Telecommunication and Internet Association (CTIA) conference in New Orleans, TI unveiled its new Wanda (Wireless Any Network Digital Assistant) chipset, which for the first time packages Bluetooth, Wi-Fi (802.11b), and GSM cellular technology into a single chipset. The announcement could have big implications for both the PDA and cell-phone markets.

In development for nine months, Wanda is the first to address the problems with bundling Bluetooth and 802.11b radio chips. "Those two technologies just don't like each other," says Richard Kerslake, TI's director of wireless computing.

The signal interference between the two has been a problem in the past. Wanda eliminates that issue and allows the three technologies to coexist in a small form. "We've gotten the three radios in a box smaller than anyone else," Kerslake says.

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Texas Instruments (TI: Research, Estimates) is the leading manufacturer of chipsets for cell phones and is looking to carry that dominance over to the PDA market. A little over a year ago, the company announced it was moving into the market, and has already scored some modest gains, with the company's OMAP processors powering the Palm (PALM: Research, Estimates) Tungsten T line of PDAs.

Some analysts believe that bundling functionalities such as the ability to surf the Net wirelessly while speaking on a Bluetooth headset over a GSM connection will spur growth in the market. Research firm In-Stat predicts a growth rate of 20 percent in the PDA market year over year for the next five years, and believes that "the proliferation of integrated PDAs that enable multiple functionalities, including cellular, 802.11, and Bluetooth will help to facilitate the continued market growth."

Wanda's alpha launch will take place next month, and products using all three chips will be available in the market by year's end. One of the first effects the chipset could have on the market is a faster product launch cycle.

According to In-Stat's Cindy Wolf, TI is claiming that Wanda will allow manufacturers to come out with new products in as little as 100 days. In the past, manufacturers were forced to develop and release different models with the different functionalities. But using the new three-in-one chip, a manufacturer can offer all the functionalities in a single product.

"There's a pretty dramatic innovation rate enabled by these fully functioning chipsets," says independent analyst Dylan Brooks. "That kind of integration -- the better use of battery power, the lower cost, and tighter integration -- will let manufacturers roll out product that is technology-agnostic."

By announcing the new chipset, TI effectively paints a target on its back. Other major PDA chip manufacturers such as Motorola (MOT: Research, Estimates) (the leader in the Palm market) and Intel (INTC: Research, Estimates) (the leader in the Pocket PC market) will likely scramble to offer a competing product as soon as possible.

With Intel's recent Centrino announcement, it's clear that company is working hard to bundle its chipset offerings and is pushing wireless from the ground up. This bundling of functions is a trend across the semiconductor industry, according to In-Stat's Wolf.

Texas Instruments has raised the bar with Wanda, but it's unclear how long its competitive advantage will last. "Most companies will come out with an integrated offering in the future," Wolf says.

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