Investing in Investing in ConvergenceConvergence

Mark ChristensenMark ChristensenCorporate Vice President & Corporate Vice President &

Managing Director, Intel Capital Managing Director, Intel Capital Communications SectorsCommunications Sectors

October 2003October 2003

AgendaAgenda

Intel Capital OverviewIntel Capital Overview Intel Technology DirectionsIntel Technology Directions

–The Digital HomeThe Digital Home

–EnterpriseEnterprise

–MobilityMobility

Case Study: WiFiCase Study: WiFi

Four Pillars of Intel StrategyFour Pillars of Intel Strategy

ArchitectureArchitecture ManufacturingManufacturing BrandBrand InvestmentsInvestments Build ecosystems

Market development

Foster silicon technology

Scout new technologies

Build ecosystems

Market development

Foster silicon technology

Scout new technologies

Intel CapitalIntel Capital World’s Largest Corporate Strategic InvestorWorld’s Largest Corporate Strategic Investor Investment Managers Operating in 25 Investment Managers Operating in 25

countries on 5 continentscountries on 5 continents– ~40% of investments in 2003 to date outside US~40% of investments in 2003 to date outside US

Manage Equity, M&A transactions, Internal Manage Equity, M&A transactions, Internal Seeds and SpinoutsSeeds and Spinouts

Co-investor with leading VCsCo-investor with leading VCs

Strategic FinancialIntelCapital

IntelCapital

Intel Focus AreasIntel Focus AreasInvesting in ConvergenceInvesting in Convergence

20022002$94B$94B

20032003$120B$120B

U.S. ConsumerU.S. Consumer ElectronicsElectronics SpendingSpending

Digital Home Inflection PointDigital Home Inflection Point

All Devices and content going digitalAll Devices and content going digital Broadband going mainstream Broadband going mainstream Home network ease of deploymentHome network ease of deployment Powerful client systems with large Powerful client systems with large

storage capacitystorage capacity CE moving to horizontal modelCE moving to horizontal model

CE Moving HorizontalCE Moving Horizontal

Operating SystemOperating System

MiddlewareMiddleware

Applications/ContentApplications/Content

Component Component TechnologyTechnology

OEMs/ChannelOEMs/Channel

ODMsODMsConsumerConsumerElectronicsElectronics

(Sony, (Sony, Samsung, Samsung, Matsushita,Matsushita,

Etc.)Etc.)

TraditionalTraditional EmergingEmergingInvestmentsInvestments

To Date:To Date:

Digital Home Working GroupDigital Home Working Group

Intel Digital Home DirectionIntel Digital Home Direction

The PC The PC Integrates CE Integrates CE

CapabilityCapability

PC ProcessorPC Processor& Chipsets& Chipsets

TV TunerTV Tuner

PVRPVR

FM RadioFM Radio

Intel “MyRoom”Intel “MyRoom”Concept PCConcept PCNetworkNetwork

ContentContent

The Media The Media GatewayGateway

Ref DesignsRef Designs

Silicon Powers Silicon Powers the Digital Homethe Digital Home

815E IP D-STB815E IP D-STB

MXP5800MXP5800

Open Source SWOpen Source SW

DRMDRM

Image enhancementImage enhancement

ImagingImaging

GraphicsGraphicsChipsetsChipsets

CommComm

ProcessorsProcessors

ODMODM

Datacenter Vision Datacenter Vision

SERVERS STORAGECLIENTS NETWORKING

Intel’s Enterprise BusinessIntel’s Enterprise Business

CHIPSETSCHIPSETSBOARDSBOARDS

SYSTEMSSYSTEMS

SOFTWARESOFTWARE

DEVELOPERDEVELOPERSERVICESSERVICES

SOFTWARE VENDORSOFTWARE VENDORALLIANCESALLIANCES

INTELINTEL®®

SOLUTIONSSOLUTIONSSERVICESSERVICES

SOLUTIONSSOLUTIONSBLUEPRINTSBLUEPRINTS

INTEL CAPITALINTEL CAPITAL

ItaniumItanium®® Architecture Momentum Architecture Momentum

Hewlett PackardCompaqNECUnisysHitachiSGIIBMBullFujitsuFujitsu SiemensSun

PowerPower

SPARCSPARC

Time

The Strength of the RoadmapThe Strength of the Roadmap

Robust ItaniumRobust Itanium®® Software Ecosystem Today Software Ecosystem Today

ToolsTools

ApplicationsApplications

6 flavors of Intel compilers6 flavors of Intel compilers8 Intel8 Intel®® Performance tools Performance toolsIntelIntel®® Developer Services Developer Services

44 tools for developing applications for Windows44 tools for developing applications for Windows12 tools for developing applications for HP-UX12 tools for developing applications for HP-UX39 tools for developing applications for Linux39 tools for developing applications for Linux

Robust set of development tools & services for commercial & custom appsRobust set of development tools & services for commercial & custom apps

With Windows Server 2003 announcement, broad range of major OSs in productionWith Windows Server 2003 announcement, broad range of major OSs in production

Operating Operating SystemsSystems

Variety of major ISVs in production today, Variety of major ISVs in production today, 400+ more in production & many others slated for 2H’03400+ more in production & many others slated for 2H’03

DatabasesDatabases

Business Intelligence

Enterprise Resource Planning

Supply Chain Management

Security Other

ManagementManagement

Source: InStat, 7/03

0

10,000

20,000

30,000

40,000

50,000

2002 2003 2004 2005 2006

IntelIntel®® Centrino™ Centrino™ Mobile TechnologyMobile Technology

DebutsDebuts

“Centrino’s introduction is not just another product launch but a milestone in the adaptation of computers into our lives.“ - Aberdeen Group

July 2003July 2003

December 2002December 2002

Worldwide WiFi shipments (Thousands of Units)Worldwide WiFi shipments (Thousands of Units)

Mobility Mobility

ICH6ICH6

CODECCODEC

ICH6ICH6

CODECCODEC

GRAPHICSGRAPHICS

AZALIAAZALIA SERIAL ATASERIAL ATA

EXTENDEDEXTENDEDBATTERY LIFEBATTERY LIFEPCI ExpressPCI Express

ExtendedExtendedMobile AccessMobile Access

SimplifiedSimplifiedNetwork Network

Selection Selection Location-Location-basedbased

ComputingComputing

Dothan: 2H’04Dothan: 2H’04Next Generation Process and Next Generation Process and

PerformancePerformance

140 Million Transistors140 Million Transistors

Strained SiliconStrained Silicon

2MB power efficient L2 Cache2MB power efficient L2 Cache

90nm Process Technology90nm Process Technology

Case Study: WiFiCase Study: WiFi

“Intel to invest $150M in wireless technology firms”

Wall Street Journal – 10/02

WiFi Investment FrameworkWiFi Investment Framework

Viable public WLAN infrastructure modelsViable public WLAN infrastructure models Aggregation of disparate network Aggregation of disparate network

infrastructureinfrastructureDriveDrive

InfrastructureInfrastructure

SampleInvestmentsArea Focus

iPassiPass STSNSTSN CometaCometa

Reduce barriers to adoption: Reduce barriers to adoption: security, ease-of-use, roaming, security, ease-of-use, roaming, rangerange

Stimulate new usage: VoIPStimulate new usage: VoIP

RemoveRemoveBarriers/DriveBarriers/Drive

New UsageNew Usage

BluesocketBluesocket TransatTransat VivatoVivato TelesymTelesym

Component technologies that Component technologies that enhance Intel silicon productsenhance Intel silicon products

ComplementComplementSiliconSilicon

SychipSychip CSRCSR SiRFSiRF

Over $40M invested in ~20 companiesOver $40M invested in ~20 companies

Top 10 WiFi Trends Top 10 WiFi Trends

1.1. Enterprise user adoptionEnterprise user adoption

2.2. WiFi invades the homeWiFi invades the home

3.3. Public access: hot spots to hot zonesPublic access: hot spots to hot zones

4.4. Convergence with cellular & landline Convergence with cellular & landline

5.5. WiFi meets handheldsWiFi meets handhelds

6.6. Voice over WiFiVoice over WiFi

7.7. Smart antennas/range extensionSmart antennas/range extension

8.8. Smart infrastructureSmart infrastructure

9.9. More spectrum, better alignedMore spectrum, better aligned

10.10. WiMaxWiMax

Unwire.Unwire.

10. WiMax Addresses Backhaul10. WiMax Addresses Backhaul

BACKHAUL1

3

DEVELOPING COUNTRIES(e.g., Eastern Europe)

RESIDENTIAL & SoHo

BACKHAUL for HOTSPOTS

2

4ALWAYS BEST CONNECTED

802.11

802.16

802.11

802.11

802.11

802.16

SummarySummary

Intel Capital is a focused strategic investor Intel Capital is a focused strategic investor with resources and global reachwith resources and global reach

WiFi is like the Internet itself…a disruptive, WiFi is like the Internet itself…a disruptive, bottoms-up revolutionbottoms-up revolution

Convergence is here – horizontal model for Convergence is here – horizontal model for consumer electronics and unwired mobility consumer electronics and unwired mobility are the drivers are the drivers