Telesoft Annual Meeting Keith Larson Director, Strategic Investments Intel Capital October 25, 2002
Agenda <ul><li>Intel Capital Overview  </li></ul><ul><li>Communications Investing </li></ul><ul><li>Investment Themes </li...
Intel Capital’s Mission <ul><li>Make and manage financially attractive investments in support of Intel's strategic interes...
Experienced Investors  <ul><li>Summary </li></ul><ul><li>Invested over $350 Million in 175 deals in 2001 </li></ul><ul><li...
Worldwide Investment <ul><li>Investments outside of USA </li></ul><ul><li>Over $1 billion </li></ul><ul><li>Over 175 compa...
Intel Capital Geographic Overview Oregon (52) Hong Kong (15) New Jersey (2) India (7) Japan (8) Virginia (1) Korea (3) Ire...
<ul><li>Venture Capital Firms </li></ul><ul><li>Lead round </li></ul><ul><li>Recruiting </li></ul><ul><li>Board Seat </li>...
Intel Capital’s Decision Making <ul><li>Les Vadasz </li></ul><ul><li>John Miner </li></ul>Computing Communications Legal T...
Intel Capital Process Investigation Due Diligence Delivering Value Disposition 6 months to 3+ years 2 weeks to 2 months 2 ...
Intel Capital’s Sources of Deals <ul><li>Referred by valued source </li></ul><ul><ul><li>Senior management </li></ul></ul>...
Assembling an Investment Strategy  <ul><li>Tools that Intel Capital uses:  </li></ul><ul><li>Equity  </li></ul><ul><li>Lic...
Deal Mix Changes with BU Goal Gap Fill Ecosystem Eyes & Ears % of Deals 20% 60% % of Deals 20% 60% <ul><li>Example: Networ...
Agenda <ul><li>Intel Capital Overview   </li></ul><ul><li>Communications Investing </li></ul><ul><li>Investment Themes </l...
Investing Environment 0 20 40 60 80 100 120 140 1970 1975 1980 1985 1990 1995 2000 US$B Total US VC $$$ Invested What was ...
Big Part Of Drop Off Is In Comm Investment   Equity into Venture-Backed Communications Companies Amount Raised ($B) Source...
Early-Stage Comm Deals Losing Ground Communication Deals by Round Class 159 271 286 357 504 829 419 159 51% 23% 58% Source...
Connectivity & Fiberoptics Continue to Dominate Comm Deal Flow Communications Deals by Sector % of Investment Source: Vent...
Companies Selling at a Discount Deals and Amount Raised Through Communications Companies’ M&As Amount Paid ($B) Number of ...
Early 2002 IPOs Look Like 2001 Deals and Amount Raised Through IPOs Amount Raised ($B) Venture-Backed IPOs Source: Venture...
Communications Liquidity IPOs and M&As Completed by Venture-Backed Communications Companies Source: VentureOne Number of L...
Looked At Another Way Ownership Status by Year Founded 153 151 212 306 452 488 564 948 1842 608 Total Pool 195 Source: Ven...
Time To IPO Next-Gen, Old-Fashioned Venture Median Age At IPO (Years) Source: NVCA
Communication Valuations Worse  Median Pre-Money IT Valuation by Round Class ($M) Source: VentureOne
Back to Basics <ul><li>Business Plans </li></ul><ul><li>Technology With Value </li></ul><ul><li>Business Models That Work ...
Technology <ul><li>Evolution vs. Revolution </li></ul><ul><li>Technology treadmill is not in recession </li></ul><ul><li>R...
Agenda <ul><li>Intel Capital Overview  </li></ul><ul><li>Communications Investing </li></ul><ul><li>Investment Themes </li...
Communications Sector Focus Areas Optical Broadband  & Wireless Networks Networking & Storage Cellular and Handheld <ul><l...
How We Work Internally Increasing Control M&A Contract Alliance <ul><li>Contract </li></ul><ul><li>Joint Venture </li></ul...
Some Example Investment Themes <ul><li>Cellular handset & PDA architecture </li></ul><ul><li>Storage networking </li></ul>...
New Business Models <ul><li>Over time: </li></ul><ul><ul><li>Brands remain important </li></ul></ul><ul><ul><li>ODMs are i...
New Handheld Applications 10 <ul><li>Localized / Cultural </li></ul><ul><li>Richer content </li></ul><ul><li>New Usage Mod...
Intel® Personal Internet Client Architecture (PCA) Standard Interface Standard Building Blocks  for Standards-based Device...
Cellular and Handheld Investment Areas <ul><li>Hardware (Core) </li></ul><ul><ul><li>DSP, Tools, IP, Intel® XScale™, Flash...
Some Example Investment Themes <ul><li>Cellular handset & PDA architecture </li></ul><ul><li>Storage networking </li></ul>...
Importance Of Storage To Intel <ul><li>Data growth unabated, despite economic slowdown </li></ul><ul><ul><li>Storage IS A ...
Storage Market Segment Summary <ul><li>Today… </li></ul><ul><li>DAS accessible only via servers </li></ul><ul><li>SAN fabr...
Investment Objectives <ul><li>Enhance Intel Silicon platforms for Storage  (Ecosystem) </li></ul><ul><ul><li>Development t...
Some Example Investment Themes <ul><li>Cellular handset & PDA architecture </li></ul><ul><li>Storage networking </li></ul>...
802.11 Explosive Growth Source: ICG Market Model
Achieving Our Vision: Optimizing the Platform <ul><li>Wi-PC   </li></ul><ul><ul><li>Goal: >50% wireless embedded NIC in ’0...
Banias – A New Wireless Era <ul><li>Biggest product launch in Intel’s history </li></ul><ul><li>First product designed fro...
Mobility Enabling Program Elements * Other names and brands may be claimed as property of others 2003 Target Optimize The ...
Infrastructure Enabling Program * Other names and brands may be claimed as property of others 2003 Target Multiple Venues ...
802.11 Hotspot Growth 17K 37K 65K 98K 144K 7K Source: BWCS Ltd. 2002
Agenda <ul><li>Intel Capital Overview  </li></ul><ul><li>Communications Investing </li></ul><ul><li>Investment Themes </li...
Intel Capital Summary <ul><li>Focus on  Financial & Strategic  success </li></ul><ul><li>One of a few credible corporate i...
Backup
Investment Press “ Intel is the corporate investor everyone watches.  Intel Capital has grown beyond using investments to ...
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Strategic Thinking: Creating an Investment Strategy

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  • We have not disclosed inv activity levels prior to 1996 In 1997 we invested approx. $330M. In 1998 About 130 deals Invested approx $830 Million (which includes one large investment of $500 Million in Micron technology) In 1999 Over 250 deals Over $1.2B invested In 2000 Over 300 deals Over $1.3B invested
  • $ Invested are by year (not cummulative) ROW = South America (Brazil + Argentina) + Middle East (Israel) Key Message = Increasing overseas investment 1998: less than 5% of the total $$$’s were invested overseas 1999: this increased to over 33%. 2000: this increased to nearly 40%
  • 3 Totals US : 191 Non US: 103
  • How does Software early stage to compare to all?
  • Innovation doesn’t take a holiday
  • First graphic, no build: We can learn from the PC industry by reviewing the importance of outsourcing over time. In the beginning (80’s) most manufacturer handled design and manufacturing in-house. Eventually, mfrs focus on higher levels of integration and differentiation. Regardless of the split betw in-house and outsourcing, brand value remains important. But over time, the role of ODMs becomes more significant. Throughout this time, standards based platforms become critical in controlling cost and quality. Build1: cellular industry If we take the leanings from the PC industry, and extrapolate forward wrt the cellular industry, one could expect a similar dynamic. Most importantly, the role of branding, ODMs and standard platforms may resemble what we’ve seen before in the PC arena.
  • How many of you have apps or services in your phones which are not from the original manufacturer? In your PC, the applications and services are NOT from the original manufacturer, they come from different ISVs who are developing apps on general purpose processors. Over the last 10 years, we saw this spiral in the PC industry – new technology, faster processors made it possible for ISVs to write new apps. As they developed new apps, they required faster and more capable platforms to fully take advantage of the new usage models. We are seeing the same phenomenon coming to the handsets and expect this to accelerate over the next few years. An increasing number of ISVs are beginning to write apps based on standard building blocks. A greater number of apps results in choice for the users – they can download the games they want, the apps they want and customize the experience for their unique needs. Despite the downturn, ISVs have continued to develop apps.
  • In order to deliver new applications quickly and inject new devices into the marketplace, a new open architecture is needed. This architecture must decouple the communications components from the application subsystem, allowing the communications to receive type approval without impeding application development. Three Tenets of Intel PCA Separates the communication from the computing stack Applications are written to a general purpose processor based on Intel ® XScale™ Microarchitecture Eases portability of applications from IA Intel is delivering building blocks and core technologies to enable implementation of this architecture.
  • Key message, there is a convergence between SAN and NAS and we will introduce a term called Fabric Attached Storage (FAS). Another key message is that there is a trend in DAS towards a modular blade and brick architecture.
  • In mobile PCs, Intel has followed the same platform integration strategy. Industry-wide, we are seeing about an avg 10% 802.11 attach rate with notebooks, with this percentage being as high as 50% in certain verticals such as education. Wireless LAN are growing like wildfire on college campuses where many schools issue laptops to the entire student body. Intel would like to see the industry-wide rate of embedded wireless on mobile PCs to be &gt;50% next year. Cross-divisional teams within Intel are working to make broad acceptance happen with the reliability, features, and performance Intel is known for. Cost?
  • This is 142% growth from 01 - -02, 118% grown from ’02 – ’03. 802.11 silicon forecasts show a similar picture as adoption by enterprise, CE devices and home users grows equally fast. There are approximately 11M wireless clients in the market today (NICS), that number is expected to double in 2002
  • Strategic Thinking: Creating an Investment Strategy

    1. 1. Telesoft Annual Meeting Keith Larson Director, Strategic Investments Intel Capital October 25, 2002
    2. 2. Agenda <ul><li>Intel Capital Overview </li></ul><ul><li>Communications Investing </li></ul><ul><li>Investment Themes </li></ul><ul><li>Summary and Q&A </li></ul>
    3. 3. Intel Capital’s Mission <ul><li>Make and manage financially attractive investments in support of Intel's strategic interests </li></ul><ul><li>Execute Intel's strategic acquisitions </li></ul><ul><li>Be the eyes and ears of Intel on technology and business trends </li></ul>Strategic Intent Financial Viability Ideal
    4. 4. Experienced Investors <ul><li>Summary </li></ul><ul><li>Invested over $350 Million in 175 deals in 2001 </li></ul><ul><li>Invested over $1 Billion in both 1999 and 2000 </li></ul><ul><li>At end of December 2001 </li></ul><ul><li>Over 500 companies </li></ul><ul><li>About $1.7 billion value </li></ul>1994 1995 1996 1997 1998 1999 # Transactions 2000
    5. 5. Worldwide Investment <ul><li>Investments outside of USA </li></ul><ul><li>Over $1 billion </li></ul><ul><li>Over 175 companies </li></ul><ul><li>In over 25 countries on 5 continents </li></ul>6% 24% 15% 55% 96% 2% 2% 1998 2001 $ Invested by Region North America Asia Pacific Europe & Israel Rest of World
    6. 6. Intel Capital Geographic Overview Oregon (52) Hong Kong (15) New Jersey (2) India (7) Japan (8) Virginia (1) Korea (3) Ireland (1) Israel (14) England (18) China (4) Brazil (7) France (2) Australia (2) Singapore (1) Taiwan (5) Seattle (1) Argentina (4) Germany (9) Utah (2) Poland (1) Sweden (1) <ul><li>California </li></ul><ul><li>Folsom (15) </li></ul><ul><li>Santa Clara (105) </li></ul>Arizona (4) As of 4/24/2002 Mass (7) Mexico (1)
    7. 7. <ul><li>Venture Capital Firms </li></ul><ul><li>Lead round </li></ul><ul><li>Recruiting </li></ul><ul><li>Board Seat </li></ul><ul><li>Support of exit strategy </li></ul><ul><li>Management support </li></ul><ul><li>Portfolio relationship building </li></ul>Complementary Efforts <ul><li>Intel Capital </li></ul><ul><li>Technology due diligence </li></ul><ul><li>Technology collaboration </li></ul><ul><li>Drive standards </li></ul><ul><li>Promote within Intel </li></ul><ul><li>Marketing cooperation </li></ul><ul><li>Board Observer position </li></ul><ul><li>Portfolio relationship building </li></ul>The Company                          
    8. 8. Intel Capital’s Decision Making <ul><li>Les Vadasz </li></ul><ul><li>John Miner </li></ul>Computing Communications Legal Treasury Geographies Investment Sectors
    9. 9. Intel Capital Process Investigation Due Diligence Delivering Value Disposition 6 months to 3+ years 2 weeks to 2 months 2 weeks to 3+ months Business Unit Legal Treasury Intel Capital Milestones Business Plan Or Proposal Received Deal Concept Approval Meeting (DCM) Gap Analysis Investment Project Authorization Meeting (IPA) Close
    10. 10. Intel Capital’s Sources of Deals <ul><li>Referred by valued source </li></ul><ul><ul><li>Senior management </li></ul></ul><ul><ul><li>Past deal successes </li></ul></ul><ul><ul><li>VC’s </li></ul></ul><ul><ul><li>Lawyers, bankers, accountants, i-bankers… </li></ul></ul><ul><li>Business Unit or Labs </li></ul><ul><li>Industry association or trade show </li></ul><ul><li>Website or cold call </li></ul>
    11. 11. Assembling an Investment Strategy <ul><li>Tools that Intel Capital uses: </li></ul><ul><li>Equity </li></ul><ul><li>Licensing </li></ul><ul><li>Alliances </li></ul><ul><li>M&A </li></ul><ul><li>Types of Equity Investing Strategies </li></ul><ul><li>Eyes and Ears </li></ul><ul><li>Ecosystem </li></ul><ul><li>Market Development </li></ul><ul><li>Gap Filling </li></ul>
    12. 12. Deal Mix Changes with BU Goal Gap Fill Ecosystem Eyes & Ears % of Deals 20% 60% % of Deals 20% 60% <ul><li>Example: Network Processing </li></ul><ul><li>Goal: build larger # of allies for initiative </li></ul><ul><li>Typical profile for ecosystem development </li></ul><ul><li>Often characteristic of a newer business, but one that is closer to Intel’s core competencies </li></ul><ul><li>Example: Ethernet Solutions </li></ul><ul><li>Goal: fill gaps, enable adoption, drive mkt dev </li></ul><ul><li>Typical profile for accelerating deployment (of BB for example) </li></ul><ul><li>Sometimes this profile is characteristic of more mature businesses </li></ul>Gap Fill Ecosystem Eyes & Ears
    13. 13. Agenda <ul><li>Intel Capital Overview </li></ul><ul><li>Communications Investing </li></ul><ul><li>Investment Themes </li></ul><ul><li>Summary and Q&A </li></ul>
    14. 14. Investing Environment 0 20 40 60 80 100 120 140 1970 1975 1980 1985 1990 1995 2000 US$B Total US VC $$$ Invested What was once hard times What to Expect ?? 1H’02 Source: VentureOne
    15. 15. Big Part Of Drop Off Is In Comm Investment Equity into Venture-Backed Communications Companies Amount Raised ($B) Source: VentureOne Number of Deals
    16. 16. Early-Stage Comm Deals Losing Ground Communication Deals by Round Class 159 271 286 357 504 829 419 159 51% 23% 58% Source: VentureOne
    17. 17. Connectivity & Fiberoptics Continue to Dominate Comm Deal Flow Communications Deals by Sector % of Investment Source: VentureOne 159 829 271 286 357 419 504
    18. 18. Companies Selling at a Discount Deals and Amount Raised Through Communications Companies’ M&As Amount Paid ($B) Number of Transactions Source: VentureOne
    19. 19. Early 2002 IPOs Look Like 2001 Deals and Amount Raised Through IPOs Amount Raised ($B) Venture-Backed IPOs Source: VentureOne
    20. 20. Communications Liquidity IPOs and M&As Completed by Venture-Backed Communications Companies Source: VentureOne Number of Liquidity Events
    21. 21. Looked At Another Way Ownership Status by Year Founded 153 151 212 306 452 488 564 948 1842 608 Total Pool 195 Source: VentureOne In the BEST years approximately 500 companies found liquidity through an M&A transaction or IPO 5+ years of inventory or ??
    22. 22. Time To IPO Next-Gen, Old-Fashioned Venture Median Age At IPO (Years) Source: NVCA
    23. 23. Communication Valuations Worse Median Pre-Money IT Valuation by Round Class ($M) Source: VentureOne
    24. 24. Back to Basics <ul><li>Business Plans </li></ul><ul><li>Technology With Value </li></ul><ul><li>Business Models That Work </li></ul><ul><li>Total Capital Required </li></ul><ul><li>Experienced Management Teams </li></ul><ul><li>Valuation Sanity </li></ul><ul><li>Deep Pockets and Long Arms </li></ul><ul><li>Real Exit Strategies For Investors </li></ul>
    25. 25. Technology <ul><li>Evolution vs. Revolution </li></ul><ul><li>Technology treadmill is not in recession </li></ul><ul><li>Returns go to the “never good enough” technology suppliers </li></ul><ul><li>Areas of continued interest </li></ul>
    26. 26. Agenda <ul><li>Intel Capital Overview </li></ul><ul><li>Communications Investing </li></ul><ul><li>Investment Themes </li></ul><ul><li>Summary and Q&A </li></ul>
    27. 27. Communications Sector Focus Areas Optical Broadband & Wireless Networks Networking & Storage Cellular and Handheld <ul><li>Network Processing </li></ul><ul><li>Voice Processing </li></ul><ul><li>Switching </li></ul><ul><li>Telecom SHV Servers </li></ul><ul><li>Wired Ethernet </li></ul><ul><li>Storage </li></ul><ul><li>Comm Fund Mgmt </li></ul><ul><li>802.11x (Si, SW, Services for Enterprise, Home & Hot Spots) </li></ul><ul><li>BB CPE Components (Si, SW) </li></ul><ul><li>BB CPE Gateways (Si, SW) </li></ul><ul><li>BB Wireless Access </li></ul><ul><li>IP Services (Apps, SPs) </li></ul><ul><li>EFM </li></ul><ul><li>Home Networking </li></ul><ul><li>Transponders/transceivers </li></ul><ul><li>Optical Integrated Circuits </li></ul><ul><li>III-V Capabilities </li></ul><ul><li>Planar Integration </li></ul><ul><li>Free Space Optics </li></ul><ul><li>Optical Systems </li></ul><ul><li>Disruptive optical devices </li></ul><ul><li>Memory SW & Tech </li></ul><ul><li>OS, Middleware, Java </li></ul><ul><li>PCA Applications </li></ul><ul><li>PCA Carrier Support </li></ul><ul><li>RF/PA Core silicon </li></ul><ul><li>XScale TM Tools and Capabilities </li></ul>
    28. 28. How We Work Internally Increasing Control M&A Contract Alliance <ul><li>Contract </li></ul><ul><li>Joint Venture </li></ul><ul><li>Minority Equity </li></ul><ul><li>License </li></ul><ul><li>OEM </li></ul><ul><li>Minority Equity </li></ul>Equity Business Development Intel Capital Intel Capital
    29. 29. Some Example Investment Themes <ul><li>Cellular handset & PDA architecture </li></ul><ul><li>Storage networking </li></ul><ul><li>Wireless LANs </li></ul>
    30. 30. New Business Models <ul><li>Over time: </li></ul><ul><ul><li>Brands remain important </li></ul></ul><ul><ul><li>ODMs are increasingly significant </li></ul></ul><ul><ul><li>Standard Platforms become critical </li></ul></ul>*data is conceptual Cellular Industry* 100% PC Industry * 100%
    31. 31. New Handheld Applications 10 <ul><li>Localized / Cultural </li></ul><ul><li>Richer content </li></ul><ul><li>New Usage Models </li></ul>
    32. 32. Intel® Personal Internet Client Architecture (PCA) Standard Interface Standard Building Blocks for Standards-based Devices Memory Intel ® Flash Memory Intel ® Flash Software Communications Intel Base band chipsets With Micro Signal Architecture Compute Intel ® XScale™ Microarchitecture
    33. 33. Cellular and Handheld Investment Areas <ul><li>Hardware (Core) </li></ul><ul><ul><li>DSP, Tools, IP, Intel® XScale™, Flash / SRAM </li></ul></ul><ul><ul><li>RF / PA, Baseband / Dual Mode, Mixed Signal, Soft Radio </li></ul></ul><ul><ul><li>LP Peripherals/Bluetooth, Power Management </li></ul></ul><ul><li>Software </li></ul><ul><ul><li>Platforms, OS, drivers, IPP, compilers </li></ul></ul><ul><ul><li>Java, WAP, MMS </li></ul></ul><ul><li>Ecosystem (Differentiators) </li></ul><ul><ul><li>Position Location, synchronization, voice recognition </li></ul></ul><ul><ul><li>Entertainment, video, multimedia, music, eMail </li></ul></ul><ul><ul><li>802.11/WAN </li></ul></ul><ul><ul><li>Antenna, mobile battery, peripheral appliances </li></ul></ul><ul><ul><li>Billing, roaming, security </li></ul></ul>
    34. 34. Some Example Investment Themes <ul><li>Cellular handset & PDA architecture </li></ul><ul><li>Storage networking </li></ul><ul><li>Wireless LANs </li></ul>
    35. 35. Importance Of Storage To Intel <ul><li>Data growth unabated, despite economic slowdown </li></ul><ul><ul><li>Storage IS A Key Element Of Any Enterprise Network </li></ul></ul><ul><ul><li>Storage Is A Key Driver For Future Growth </li></ul></ul><ul><ul><ul><li>Use of Ethernet as backbone for networked storage will increase </li></ul></ul></ul><ul><ul><ul><li>SAN (storage over Ethernet) growth in >2000 similar to LAN in ’90s, 47% CAGR in 06 </li></ul></ul></ul><ul><ul><ul><li>Direct Attached and Network Attached CAGRs 12% & 26% in ’06 </li></ul></ul></ul><ul><li>Several key technology transitions within 3yrs – Play to Intel Strength </li></ul><ul><ul><li>Serial-ATA, Serial Attached SCSI, PCI Express, iSCSI, Infiniband, 10G </li></ul></ul><ul><ul><li>Fiber Channel, SCSI and ATA are key elements of today’s environment </li></ul></ul><ul><ul><li>iSCSI, Fiber Channel, Serial-ATA will drive tomorrow’s networked storage </li></ul></ul><ul><li>Increasing integration to deliver value on platform & silicon </li></ul><ul><ul><li>>80% RAID on Motherboard or RAID On Chip by ’05 </li></ul></ul>Intel’s strength today is in I/O processor silicon (high margin Si)
    36. 36. Storage Market Segment Summary <ul><li>Today… </li></ul><ul><li>DAS accessible only via servers </li></ul><ul><li>SAN fabrics are FC today </li></ul><ul><li>Fiber Channel (FC) used as the SAN network connection and disk interconnect </li></ul><ul><li>NAS attaches directly to Ethernet LAN </li></ul><ul><li>Tomorrow… </li></ul><ul><li>DAS is trending toward modular, blade & brick architectures </li></ul><ul><ul><li>Total 2005 SAM ~ $3B* </li></ul></ul><ul><li>NAS/SAN converging to “Fabric Attached Storage” (FAS) </li></ul><ul><ul><li>FC still growing; iSCSI gaining traction </li></ul></ul><ul><ul><li>Total 2005 SAM ~ $4B* </li></ul></ul><ul><li>Disk interconnects rapidly moving to serial: SATA & SAS </li></ul><ul><li>Estimate of all system level opportunities at ~$60B TAM </li></ul><ul><li>Intel specific BB opportunity SAM at ~$8B </li></ul>LAN Workstation / Performance DT Servers SAN Switches External RAID Arrays Storage Area Network (SAN) Storage Arrays Three Storage Platforms Network Attach Storage (NAS) Direct Attached Storage (DAS) Servers
    37. 37. Investment Objectives <ul><li>Enhance Intel Silicon platforms for Storage (Ecosystem) </li></ul><ul><ul><li>Development tools, middleware, RTOS , Pre-validated IP & s/w stacks, co-processors </li></ul></ul><ul><li>Accelerate Ethernet storage adoption by Workgroup/Enterprise (Ecosystem) </li></ul><ul><ul><li>Security, iSCSI targets, iSCSI management </li></ul></ul><ul><li>Create/Enable tech. critical for maintaining Intel leadership (GAP) </li></ul><ul><ul><li>Examples: S-ATA PHY, 10G Copper, iSCSI offload, NAS SW, PCI Ex </li></ul></ul><ul><li>Displace PPC in Storage systems with Intel BBs (GAP) </li></ul><ul><ul><li>System-on-chip technology for IA, IPF, Xscale, IOP, IXP </li></ul></ul><ul><li>Enable innovators who disrupt incumbents w/ Intel’s storage BBs (Ecosystem / Eyes & Ears) </li></ul><ul><ul><li>SAN appliance, Storage virtualization, Dist. Mgmt., SAN/NAS convergence </li></ul></ul><ul><li>Promote Standards-based Intra-system Networking (Ecosystem) </li></ul><ul><ul><li>Promote transition from proprietary arch to Advanced TCA (PICMG 3) arch </li></ul></ul>
    38. 38. Some Example Investment Themes <ul><li>Cellular handset & PDA architecture </li></ul><ul><li>Storage networking </li></ul><ul><li>Wireless LANs </li></ul>
    39. 39. 802.11 Explosive Growth Source: ICG Market Model
    40. 40. Achieving Our Vision: Optimizing the Platform <ul><li>Wi-PC </li></ul><ul><ul><li>Goal: >50% wireless embedded NIC in ’03 </li></ul></ul><ul><ul><li>Aggressive joint marketing, 3 rd party alliances and MDF $ </li></ul></ul><ul><li>Platform integration </li></ul><ul><ul><li>Validated, stable system w/the heavy qual. & test lifting done by Intel </li></ul></ul><ul><ul><li>Unique features & performance (e.g., lowest latency QoS) </li></ul></ul><ul><ul><li>Lower cost </li></ul></ul>CPU Memory I/O Graphics Wired LAN Today’s Platforms CPU Memory I/O Graphics Wired LAN 2002+ Platforms Wireless LAN, WAN, PAN Wireless LAN, WAN, PAN Working to define the next gen Wi-PC spec
    41. 41. Banias – A New Wireless Era <ul><li>Biggest product launch in Intel’s history </li></ul><ul><li>First product designed from the ground up for mobile computers </li></ul><ul><li>Integrated platform designs with wireless (“born wireless”) </li></ul><ul><li>Massive marketing campaign to build the brand and create wireless association </li></ul><ul><li>Key programs in the Mobile Platforms Group </li></ul><ul><ul><li>Mobility Enabling Program </li></ul></ul><ul><ul><li>Infrastructure Enabling Program </li></ul></ul><ul><li>Driving the ecosystem for success </li></ul>
    42. 42. Mobility Enabling Program Elements * Other names and brands may be claimed as property of others 2003 Target Optimize The Platform To Deliver Best Mobility <ul><li>An example: </li></ul><ul><li>Banias Processor </li></ul><ul><li>Windows XP </li></ul><ul><li>802.11 Dual Band </li></ul><ul><li>Bluetooth* Wireless Tech </li></ul><ul><li>Quick Connectivity </li></ul><ul><li>CAPI Based Security </li></ul><ul><li> 1.2” (2 spindles) </li></ul><ul><li>4.5 lbs (2 spindles) </li></ul><ul><li>4.5 – 6.0 hrs battery </li></ul>Platform Guidelines Suggested Ways to Deliver on the 4 Vectors Wireless Stacks Deliver Seamless Secure Connectivity Experience Platform Enabling Extend Intel’s Validation Efforts to Include Battery Life and Wireless Wireless Stacks Just Work BKMs to Deliver Mobility Platform is Validated For Mobility Multi-Year Program to Accelerate Transition to Mobility
    43. 43. Infrastructure Enabling Program * Other names and brands may be claimed as property of others 2003 Target Multiple Venues for Connecting Banias platforms wirelessly Hotspots Promote with network operators, WISPs through marketing and technical enabling Enterprise Blueprint programs with system integrators, OEMs, including security. Home Promote with operators, BB service providers & OEMs for residential use. Corporate WLAN deployment pilots Select hotels, airports, etc. Broadband + WLAN promotions Multi-Year Program to Accelerate Transition to Mobility
    44. 44. 802.11 Hotspot Growth 17K 37K 65K 98K 144K 7K Source: BWCS Ltd. 2002
    45. 45. Agenda <ul><li>Intel Capital Overview </li></ul><ul><li>Communications Investing </li></ul><ul><li>Investment Themes </li></ul><ul><li>Summary and Q&A </li></ul>
    46. 46. Intel Capital Summary <ul><li>Focus on Financial & Strategic success </li></ul><ul><li>One of a few credible corporate investors </li></ul><ul><li>Very experienced, value add complement VC’s </li></ul><ul><li>Investment strategies complement successful teams </li></ul>Continue to work with Telesoft Bring us your ideas and inspirations!
    47. 47. Backup
    48. 48. Investment Press “ Intel is the corporate investor everyone watches. Intel Capital has grown beyond using investments to fill gaps in Intel's PC chip product line to fueling its vision of how the industry can open up new ways to use the Internet .” David Barry, Senior Editor The Corporate Venturing Report March 2001 “ Intel companies don't just get the money, they get access to its engineers and the testing equipment in Intel labs. The Intel stamp of approval can also help on Wall Street during the IPO process.” Brad Stone, Newsweek , April 17, 2000

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