By Mark LaPedus EBN (02/24/2000 7:44 AM EST)

Striking back at the competition-including one of its biggest OEM customers-Intersil Corp. this week rolled out its latest line of chipsets for wireless LAN (WLAN) applications.

The products represent a new version of Intersil's previous Prism WLAN chipset family, and will enable OEMs to cut the cost of a WLAN card from about $140 to less than $100, according to officials at the Palm Bay, Fla., company.

The new Prism 2.5 and Prism 3 chipsets will compete in the market against products from several companies, including those being developed by Intel Corp. and one of Intersil's largest customers, Symbol Technologies Inc., Holtsville, N.Y.

Last week, Santa Clara, Calif.-based Intel announced a deal to co-develop WLAN chips with Symbol. As part of the agreement, Intel plans to sell the chips on the open market, and also purchased a small stake in Symbol for $100 million.

The deal stunned Intersil, which sells its Prism chipsets into Symbol's high-end WLAN-based hardware products. Following the Intel agreement, however, Symbol said it will move away from the Prism chipset, and instead embrace devices being co-developed with Intel.

News of the Intel/Symbol alliance "astonished" Intersil, said Larry Ciaccia, vice president and general manager of the Prism Wireless Products Division, in an interview.

"It was both good news and bad news," added Chris Henningsen, vice president of marketing for the Prism Wireless Products Division. "I was very surprised by the announcement. The good news is that Intel is endorsing 802.11."

For years, in fact, Intersil has been pushing WLAN chips based on the emerging 802.11 standard. In contrast, several other chip makers, including Intel, have pushed competitive or proprietary WLAN standards.

But after being deemed too expensive for the market as a whole, WLAN products based on the 802.11 standard seem finally to be finding a place in the business segment. In fact, Intersil chipsets based on the standard are being used in products sold by Cisco Systems Inc. and other major OEMs.

"Widespread adoption of wireless LANs across the consumer, SOHO, and enterprise segments is contingent upon the availability of lower-cost solutions," Ciaccia said.

To proliferate WLANs in the market, Intersil has two new versions of the product. The Prism 2.5 solution has four chips, one fewer than the older Prism product line. Like its predecessor, Prism 2.5 moves data over an 11-Mbit/s wireless LAN. It will ship in June.

Prism 3, which will have even fewer components, will be available by year's end. Prices for the products depends on the configuration, according to Intersil.