Intel Starts To Clear The WiMAX Fog, Alvarion Stock On The Rise

Includes: ALVR, INTC
by: Shlomi Cohen

With all the dramatic events of last week, primarily the Fed's interest rate decision and the release of financial results from four major brokerages, several important conferences were almost ignored by the press. One crucial conference was Intel (NASDAQ:INTC)'s IDF -- the Intel Developer Forum -- held in San Francisco between from Tuesday to last Thursday, and attended by many firms.

As far as an Israeli connection to the conference is concerned, I would ascribe the spike in the share price of Alvarion Ltd. (NASDAQ:ALVR) on Friday to $14.20, a level it had not seen since 2004, to what was said at the IDF.

For anyone who doesn't remember, in 2004, Alvarion was strongly recommended by market "guru" Tobin Smith, who now appears almost daily on the financial network of Fox News. He based his call on the dream of WiMAX in every city and on every mobile device. Three years ago, the share reached $16, and when Tobin's dream didn’t materialize quite so fast, the share price fell to a low of $5 by the summer of 2006. The share has made a strong comeback since then, rising 108% since the beginning of the year - without a word from Smith, who has moved on to other shares.

At IDF, Intel confirmed that it would launch its Montevina line of processors for notebooks by the second quarter of 2008. Among other features, it will have a WiMAX option in addition to WiFi, and Intel already has commitments from several computer manufacturers, headed by Lenovo (previously IBM's personal computer division).

Clearly, without end user devices using WiMAX chips, all telecom company investments in WiMAX infrastructure will be for naught. The extent to which Intel believes in WiMAX emerged in its announcement from Japan, which reported that the company had joined with telecommunications firm KDDI and other partners to compete for WiMAX licenses in Japan, which includes investing about a billion dollars in infrastructure.

Intel said at the conference that, in the next year, it expects 150 million potential surfers who will be in a WiMAX-enabled environment. The firms sees support for this from its partners, such as Sprint (NYSE:S), which is investing billions in the sector, and Motorola (MOT), which is selling a lot of equipment - and also from little Alvarion.

Citigroup believes that shortly after the laptops are connected to WiMAX, it will be the turn of the biggest market - cell phones - with tremendous potential for Intel.

Published originally by Globes [online], Israel business news - © Copyright of Globes Publisher Itonut (1983) Ltd. 2006. Republished on Seeking Alpha with full permission.