As it transpires, the world’s largest chipmaker does no longer want to become a media company and is looking forward to sell yet un-launched business to Verizon, a telecommunication company that already operates a pay TV service. What remains to be seen is whether Intel wants to sell the whole business unit or a stake.
When Intel Corp. first unveiled its TV service initiative, it was considered as the company’s yet another try to finally enter the market of consumer electronics after a number of failed attempts. As time went by, it became clear that a proper web TV service required not only infrastructure, but also contracts with content owners and a lot more. Essentially, a competitive TV service was destined to become a significant business and a notable revenue stream for Intel. However, the core competence for the company have been microprocessors for quite some time now and it does not look like the management wants to invest into non-core businesses.
According to a report from AllThingsD, Intel is close to sell Intel Media business unit to Verizon. The two companies are said to be in “advanced negotiations”. The companies are discussing whether Verizon will just take over the whole project, or Intel will retain a stake.
Back in September it was reported that Intel was shifting its strategy for its planned Web-based television service and hence may miss a stated goal of launching service by year-end. Intel’s TV efforts have slowed down when Brian Krzanich became the chief executive officer of Intel in May. The new approach proposed by Intel’s CEO suggests that the chip designer, which has built an advanced set-top box, needs an ally with existing customers and marketing experience to make its TV project a success.
Earlier this year it was reported that the world’s largest chipmaker has made a substantial progress with negotiations with Time Warner, NBC Universal and Viacom over content distribution rights. It was said that Intel was about to begin financial consultations with News Corp., owner of the Fox film and TV businesses, whereas talks with Walt Disney Co. and CBS Corp. were at an initial stage.
The base of Intel’s smart Internet TV service is expected to be a set-top-box powered by a specially-designed Intel system-on-chip that will be equipped with a camera to recognize the users and provide them relevant programs or services. The STB will provide live television, a collection of programs and TV-shows aired in the past, video rental service as well as other services. All-in-all, Intel wants to create an all-in-one solution that will provide convenience, but will not necessarily offer ways to cut-down TV bills. The new STB and service will not carry Intel brand-name.
At first glance, Intel’s TV service is nothing special as it will not introduce anything that will clearly differentiate it from the established market players. Quite naturally, the virtual TV operator will also not offer exclusive programs or TV-shows, something that Amazon and Microsoft Corp. plan to unveil for their Kindle and Xbox Live services in the newer future. However, a major advantage of the Intel’s smart TV service should be its compatibility with mobile devices.
Andy Grove, a co-founder and a former chief executive of Intel, once said in his book “Only Paranoid Survive” that when technology companies make it into non-core businesses, they rather distract attention from their failures in the core business than create new significant revenue streams. Intel has clearly missed a number of ultra-mobile opportunities, which were within its core competence, under the previous chief exec, who then initiated a pet TV project. The new CEO wants to concentrate on what Intel does best: develop and produce leading-edge microprocessors for every application possible.
Intel and Verizon did not comment on the news-story.