Wi-Fi is the coax of the wireless world in that it’s cheap, is in a lot of homes and is familiar to consumers. So today’s launch of Ozmo Devices, with backing from Intel and Belkin, should strike not a small amount of fear into the hearts of Bluetooth SIG members. Ozmo makes software that uses the existing Wi-Fi chips inside a computer or laptop and allows that laptop to communicate with battery-operated peripherals containing its chip.

From the user perspective, this will eliminate USB dongles for communicating with your wireless keyboard, mouse, etc. It also allows for applications that Bluetooth, with its limited bandwidth, can’t do well, such as sending uncompressed stereo to wireless speakers.

Ozmo doesn’t currently have peripherals on the market, but Belkin has said it plans to use its chips in products later this year. Intel is also pushing Ozmo as part of its Cliffside project, which aims to build a chipset that can distinguish between Wi-Fi signals for local area networks (LANs) and personal area networks (PANs). Cliffside won’t only pick a fight with Bluetooth, but will be a blow to the underdogs in the wireless USB space that are seeking to use ultra-wideband as a wireless standard for sending large files across relatively short distances. If Intel starts pushing Cliffside in a big way, expect to see some PANdemonium.