VCs Hope to See Wi-Fi Everywhere

Beyond computers, Wi-Fi-enabled televisions, set-top boxes, and cars are entering the market

by Stacey Higginbotham

Many people are familiar with the coffee shop's Wi-Fi, while others even know how to set up a simple home network. Pretty much everyone, however, knows that Wi-Fi is what makes it all possible. That ubiquity is what many venture firms are counting on as they invest in a group of startups putting Wi-Fi into cameras, televisions, and even keyboards and mice.

The number of Wi-Fi chips sold is expected to top 1 billion this year, up from more than 200 million sold in 2006, according to data from ABI Research. Beyond computers, Wi-Fi-enabled televisions, set-top boxes, and cars are entering the market. That's good news for those backing the standard, but it could pose a problem for the multiple startups betting on different wireless standards for connecting computers to peripherals, transmitting wireless video, and managing home-automation networks.

Carl Showalter, founding general partner with Opus Capital, says the current and next-generation versions of Wi-Fi have the bandwidth to offer video and can do a variety of things at lower power; energy use and wireless bandwidth have been the most common stumbling blocks to using the technology in more applications. For Opus, Wi-Fi's primacy in the market has translated into investments in Eye-Fi, which announced an $11 million Series B round this month for a card that Wi-Fi-enables a digital camera, and in GainSpan, which raised $20 million at the end of 2007 for its ultra-low-powered Wi-Fi chipset, which could be used in sensor networks and home automation.

So where in the home might Wi-Fi work? First, it's good to recall that Wi-Fi currently allows us to transmit a lot of data, really quickly, over distances of about 120 feet. In each generation of the technology standard, the amount of data that can be transmitted has expanded, essentially enabling the networks to carry more information, faster. Some companies are now working on ways to use the proposed 802.11n next-generation Wi-Fi standard, set by the IEEE, to transfer high-definition video to televisions.

Home Office to Living Room

Wi-Fi started out in the home office, linking computers to broadband connections, then to each other without cables. It could soon replace technologies such as Bluetooth or proprietary lasers in wireless keyboards and mice, thanks to a new project at Intel (INTC) called Cliffside. Researchers on the project are developing technology to add short-range transmission to Wi-Fi's capabilities. In June, Ozmo Devices came out of stealth mode with $12.5 million in funding from Intel Capital, Tallwood Venture Capital, and Granite Ventures with plans to use Cliffside technology in developing a line of Wi-Fi-enabled keyboards and mice. Products should be available later this year.

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