Intel to push into television products
Intel is expanding into TV equipment to reduce its reliance on personal computer. Harrison McClary/Bloomberg
Tuesday January 06 2009
Intel Corp., resurrecting a stalled bid to make its chips the key component in home-entertainment devices, expects to make headway this year as consumers use their televisions to surf the Web, chat with friends and shop online.
Consumer-electronics makers will introduce cable and satellite boxes with Intel chips in 2009, said Eric Kim, who heads the company’s digital home unit. Intel plans to discuss the devices this week at the Consumer Electronics Show in Las Vegas.
Intel, the world’s largest chipmaker, is expanding into TV equipment to reduce its reliance on personal computers. The set- top box strategy is a shift from an earlier goal of getting more PCs into consumers’ living rooms. Still, Intel may struggle to unseat more-established competitors in home electronics, especially as the economy makes buyers more cautious.
“In a recession, semiconductor markets tend to favor the entrenched player,” said Shane Rau, an analyst for research firm IDC. He doesn’t expect Intel to win significant sales until after 2010, when it learns to make the chips more cheaply. “We’re not going to know about Intel’s strategy until well into the next decade, assuming that Intel is willing to stick with it.”
Intel, based in Santa Clara, California, fell 29 cents, or 1.9 percent, to $14.91 yesterday on the Nasdaq Stock Market. The shares dropped 45 percent last year.
Failed
Intel set out to conquer the home-entertainment market four years ago, developing technology called Viiv that let computers connect to televisions. The idea failed to catch on, and Intel now aims to bring Internet capabilities to TVs while keeping the devices easier to use than PCs.
“This whole ‘connected TV’ has been promised for a decade,” Intel’s Kim said in an interview. “2009 is clearly the year where specific devices and service will be available.”
Intel faces competition from companies such as Broadcom Corp., which sells cheaper chips for set-top boxes. Intel’s product will cost about $30, as much as three times the price of rival offerings, according to Christopher Danely, an analyst at JPMorgan Chase & Co. in San Francisco.
Intel’s chips already power an Apple Inc. device called Apple TV, which lets users watch downloaded videos and other content on their televisions. Still, even Apple Chief Executive Officer Steve Jobs doesn’t expect computer functions to catch on with average TV viewers soon. Jobs has told analysts that the whole category of devices will remain a “hobby” through 2009. (Bloomberg)
- Ian King
