China's Lenovo hedges bets against WAPI

Lenovo Group Ltd., China's largest PC maker, is hedging its bets against the implementation of a homegrown WLAN (wireless LAN) standard at the heart of a trade dispute between the U.S. and China.

The Chinese government has implemented a mandatory standard for WLAN equipment sold in China that is very similar to the 802.11 wireless networking standard developed by the Institute of Electrical and Electronics Engineers Inc. (IEEE). However, the Chinese standard uses a different security protocol, called WAPI (WLAN Authentication and Privacy Infrastructure), that is not compatible with the security protocol used with 802.11.

All WLAN equipment sold in China after June 1 must comply with the Chinese standard. U.S. industry groups and U.S. government officials have objected to the implementation of WAPI because of a provision that requires foreign vendors to license the technology and share technology with Chinese vendors. Several companies, including Intel Corp. and Texas Instruments Inc., have said they have no plans to offer products that support WAPI.

While China's government has given no public signs of yielding on the implementation of WAPI, Lenovo -- formerly known as Legend Group Ltd. -- has been working closely with Intel to develop a prototype laptop computer, called Vela. Vela is based on the next generation of Intel's 802.11-based Centrino platform, code named Sonoma. Lenovo has also announced plans to offer products that support WAPI.

Set for introduction during the second half of this year, Sonoma consists of Intel's next-generation Pentium M processor, called Dothan; an updated PC chipset, code named Alviso; and Intel's next-generation 802.11 WLAN chipset, code named Calexico 2. Calexico 2 offers several improvements over Intel's current WLAN chipsets, including lower power consumption, an improved software interface and support for the 802.11a, 802.11b and 802.11g wireless networking standards.

The Vela prototype was demonstrated by Anand Chandrasekher, the vice president and general manager of Intel's Mobile Platform Group, at the Intel Developer Forum in San Francisco in February and again in Taipei last week.

A Lenovo source in Beijing said the company has not yet made a decision on whether the Vela prototype will be produced in volume or when production might begin. That leaves open the possibility that Lenovo could give the green light for volume production of the Vela prototype if the dispute over WAPI is resolved and China permits the sale of 802.11 WLAN equipment in China, according to the source.

There's also the possibility that Vela production could go ahead for sales in markets overseas. Lenovo, which does the bulk of its sales in China, offers three Centrino-based notebook models in Europe, according to the company's Web site.

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