Sprint Shuffle Squeezes Intel

SAN FRANCISCO -- Sprint Nextel(S) investors may be happy to forget Gary Forsee, the embattled CEO who stepped down this week.

But he may be more missed at chipmaker Intel(INTC).

Intel and Sprint share a similar vision of the future: The high-speed wireless network called WiMax. With Forsee now out of the picture, the era of WiMax, and Intel's plans to capitalize on it, have hit a speed bump.

According to some analysts, Sprint's plans to spend $5 billion to build a nationwide WiMax network in the next several years are now in question.

As valuable subscribers defect from Sprint and the company struggles to merge its operations with Nextel, the WiMax project hatched by Forsee looks like an expensive distraction. Sprint may well opt to pare the investment -- or possibly even pull the plug on the project entirely, reckons Pacific Crest Securities analyst Steve Clement.

That wouldn't be welcome news at Intel, which has tied a good deal of its product development to WiMax. Just last month at its developer conference, Intel executives outlined plans to integrate WiMax chips into a variety of devices, from laptop PCs to handheld gadgets.

Intel will introduce a chipset for notebook PCs that includes WiMax functionality in May, which dovetails nicely with Sprint's previously announced plans to have WiMax service available in some 20 U.S. cities by the end of next year.

A Sprint spokesman said the company is continuing with its previously announced WiMax plans at this point. Intel spokesman Tom Beerman said the company was moving forward with its own WiMax plans and could not comment on speculation about what may happen to Sprint's WiMax project.