Huggers, who had originally pitched the idea, developed a business plan, and soon set up his group in offices with the flashy look of a media start-up on the chipmaker's Santa Clara, California, campus. Otellini entrusted the project to Huggers, a veteran TV executive who all but boasted that he knew nothing about chips. The often-clunky hardware and software provided by cable companies, and the highly controlled structure of cable packages, seemed to beg for a better solution. Its traditional strengths are in chip design and manufacturing, and it has little experience selling consumer products, much less television programming.īut Paul Otellini, Intel's CEO from 2005 until May this year, saw an opportunity for Intel to diversify into a new consumer business, one centred on a hi-tech set-top box and a slick user interface. Intel, a storied semiconductor company that has struggled to manage the transition from traditional personal computers to mobile devices, was always an unlikely player in the digital television wars. Yet so far only Netflix has proven to be a major disruption to the lucrative relationship between pay-TV operators and the entertainment companies that provide them with content. Technology heavyweights, including Apple,, Google, Sony and Microsoft, all have similar ambitions. Intel's retreat is a disappointment not only to former British Broadcasting executive Erik Huggers, who led the project, but also to others in Silicon Valley who saw it as part of a wave of next-generation digital television products that might help break open a market tightly controlled by a handful of cable companies and entertainment conglomerates. Sources close to the project said Intel is looking to sell the TV technology, called OnCue, with Verizon Communications emerging as the most likely buyer, as first reported by the AllThingsD Web site. The project faced daunting challenges from the start, and Intel's new CEO, Brian Krzanich, ultimately decided the company could not afford the distraction and expense, sources familiar with the decision told Reuters.Īt his first annual investor day on Thursday, Krzanich is expected to discuss the growing use of chips in everyday devices, plans to breathe new life into PCs, and Intel's growing contract manufacturing business - but not Intel TV. The drastic change in plans for the retail spaces follows the company's abrupt abandonment of a grand plan to become an entertainment hub in living rooms around the world - a retreat that has been rumoured but not yet acknowledged by the company. Instead, they will see ultra-thin laptops and new tablets from a variety of vendors that Intel hopes will help boost its massive but flagging computer chip business. The telco said it is extending employment offers to the roughly 350 people in the Intel Media unit, which will remain based in Santa Clara, Calif.Earlier this year, Intel rented temporary retail space in New York, Los Angeles and Chicago for a splashy launch of Intel TV, a new Internet entertainment service that the chipmaker promised could revolutionise the television industry.īut when customers walk into those stores this holiday season, they will not find any set-top TV boxes or programming services for sale. Verizon’s acquisition of Intel Media is expected to close in the next few weeks. 1 wireless carrier, according to a source. Krzanich early in the sale process settled on doing a deal with Verizon, in part because of the strategic fit with the telco’s existing video business and also to establish a broader relationship with the nation’s No. But Intel CEO Brian Krzanich, who was appointed to the top job last May, decided that launching the service was too expensive - given that Intel, a new entrant into pay-TV, would pay programming rates greater than incumbent cable and satellite providers. Intel Media, established as a discrete division, had been aiming to launch the Internet TV service before the end of 2013. The telco also said it will use Intel’s Internet-based technology to deliver a next-generation FiOS TV service, which Verizon originally launched in 2005. With the Intel Media group, Verizon is expected to launch an “over-the-top” TV service sometime within the next 12 months, according to sources.
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