Intel Plans to Jump into the Living Room
Rita is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
There are very few industry spaces that are gaining momentum fast. One such space is online streaming and cable television. Major names of the tech industry, such as Microsoft (NASDAQ: MSFT), Apple (NASDAQ: AAPL) and Google (NASDAQ: GOOG) have entered the market and are working towards improving their offerings by adding innovations every day. These titans have been trying to convince users to shift from traditional cable television and move to the new age internet-aided live streaming services. And it seems, according to a latest report from TechCrunch, there is another big name that has been secretly working on something similar. Now, after computers, laptops, and ultrabooks, even TVs will have Intel (NASDAQ: INTC) inside them.
The semiconductor giant has been working on a project to develop set-top boxes built on its chips that will be in direct line of competition with Microsoft’s Mediaroom and Xbox, Apple TV, and Google TV, and might make an official announcement in the Consumer Electronic Show (CES) which starts on Jan. 8, 2013. Intel is thinking of going with a city-by-city roll out of the offering instead of a national launch, similar to something which we have already seen in the case of Google Fiber. The primary reason for this plan is that content providers haven’t been encouraging when it came to negotiating licensing on national basis. The company feels this way it will have higher flexibility of operating, as it would be easier to focus on those cities first which have shown interest in Intel’s offering and where rights have been negotiated. According to the article on TechCrunch,
The semiconductor company is dead serious about getting its chips into the living room. After its effort to convince smart TV manufacturers to use its chips in the initial launch of Google TV failed a few years ago, it’s decided to go it alone… The plan is to create a set-top box and subscription TV service that would appeal to people who want streaming TV access but don’t want to entirely cut the cable cord and lose key content like sports.
Intel’s set-top boxes will give customers what the competitors are already providing, and in addition will provide two extra facilities. First of all, the service will offer traditional channels that are available over the cable and along with that it will also provide streaming contents through internet. Digital Trends calls it s “bridge device.” And secondly, it will give relief to the users from the headache of scheduling what shows to record and when. The technology that Intel is said to be using will allow users to go back and watch any video aired in the last month without having to schedule recordings. Intel, on its part, will be storing all the shops, and users will have full access to shows on channels they subscribe to.
Though Intel’s offering is looking robust, it is definitely not beyond being subject to hurdles. The first hurdle that Intel will face is acquiring content, and the company is not alone here. Other big names such as Apple and Google are also facing issues related to content procurement. However, Intel is extremely serious about its efforts to establish its TV offering and is ready to spend more to get the required licenses. There are reports that Intel has allocated a budget significantly larger than Apple or Google’s, and so has been able to negotiate the licensing agreements with Hollywood that other tech giants have never been able to. Forbes reports,
“Intel has made it clear to Hollywood they are serious about this product and dedicated to its longevity. Intel is also prepared to invest heavily in making it a success. In contrast, Apple, Google, and Microsoft have always viewed Hollywood as something of a hobby…Intel, more than any company before it, has the potential to really bring to consumers the things we have never seen in online content before, such as live sports, release schedules that match broadcast, and first episode through current libraries for video on demand.”
Now, coming to the second hurdle, Intel will face intense competition from the Apple TV. Apple has been working for several years on the idea of revolutionizing the television industry, and it has finally given a shape to its dream. To date, whatever Apple has done has been nothing but successful. The iDevices have been huge success stories, and the same can be expected from Apple-branded television sets. There are reports that the iPhone maker is planning on including features such as Siri, FaceTime, and other third-party content in its TV offering, and these can be pretty attractive features for users.
Intel’s ambition to jump into the living rooms of the users has huge potential and can turn into the next big thing. With features like watching old shows without having to schedule them and great deals with Hollywood making it possible to provide attractive content, Intel’s offering have the capacity to attract users and force them to shun their age-old cable television services. However, the company needs to watch out for moves from its competitors, particularly Apple.
analyse360degree has no position in any stocks mentioned. The Motley Fool recommends Apple, Google, and Intel Corp. The Motley Fool owns shares of Apple, Google, Intel Corp, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!