The world's largest manufacturer of semiconductor products,
), is preparing to launch its cloud-based TV service and set-top
box, as per a report from TechCrunch.
Reportedly, the company has been facing difficulty in securing
licensing deals with content providers. In order to avoid
licensing issues with content providers, the company plans to
roll the product city-by-city rather than nationwide. Intel will
likely reveal the set-top box at industry trade show CES on
Intel's TV service is expected to include content from cable
TV packages as well as Internet-based content like
) streaming service.
The company's intention to manufacture the set-top box (STB)
was revealed in March 2012 through a
Wall Street Journal
Intel already makes chips for STBs but its decision to
manufacture the entire box is the first of its kind. The company
has not yet signed any deal with program providers.
The chipmaker's foray into this segment may be considered a
milestone. According to research firms IDC and Gartner, the PC
industry was weak in 2012 and is expected to remain weak in 2013
due to the softness in the memory market, specifically in DRAM;
the ongoing Eurozone debt crisis and weak PC demand. In order to
expand the company's bottom line, Intel has increased efforts to
move beyond the computer industry.
The success of the launch of a virtual cable operator remains
unclear due to the many hurdles associated with it. The high cost
of TV programming channels remains the primary problem. Incumbent
cable, satellite and telecommunications companies already pay
nearly $38 billion per year to license TV channels. Intel may
also have to bear the brunt of higher costs.
Internet bandwidth could be another hurdle. The inability to
guarantee enough bandwidth for high-quality video at all times of
the day could divert the interest of the subscriber.
Further, the competition expected in the field will also be
fierce, with most of the large technology companies vying for a
share of the pie. These companies include
Currently, Intel shares carry a Zacks #3 Rank (Hold).
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