Intel, Compaq Form Networking Alliance

Santa Clara-based Intel Corp. and Houston-based Compaq Computer Corp. have entered into an alliance to develop technology linking business computers, posing a fresh threat to rival makers of networking equipment. The No. 1 computer chip maker and the biggest maker of PCs will cooperate on licensing, design and product development, with the goal of lowering the price of networking equipment and improving how it works. Compaq’s ties with retailers could help sell products resulting from the alliance. Intel hopes to integrate networking chips into the main circuitry of personal computers, which could spell trouble for networking equipment makers, such as 3Com Corp. Intel says it’s trying to boost the ability of networks to carry data between computers because that could generate more demand for sophisticated software and machines using Intel chips.