How Can Intel Stand Out in a Sea of Web TVs? Bundle Services, To Start

Every company involved in the PC business is looking for a new gig, and Internet TV could be the next big thing for Intel.  The chipmaker revealed this morning that it will be offering a Internet TV service, as well as a set-top box, to consumers later this year.

The announcement was made by Erik Huggers, the head of Intel Media, at AllThingsD’s media conference this week.

Huggers did not divulge too much information, but did say that the set-top box will be equipped with an Intel chip but will not be Intel branded.  The Intel TV is currently being tested in some of its employee’s homes.

“We think Intel is a super powerful brand,” he said. “But when I say Intel, you will automatically think ‘Inside.’ That’s what we’ve all been trained. Intel is a super powerful brand, but it’s an ingredient brand that has powered computing for decades. What we believe is there’s a real opportunity to partner with the Intel brand. The way we think about Intel Media is as ‘Intel Inside and Out.'”

The set-top box will come with a camera to know who’s watching the TV.  The camera in the set-top box may sound creepy, but the purpose is to deliver personalized content and targeted ads.  So if dad is watching TV, it will deliver content and recommendations that he likes, such as the sports channel.

Personal media as a Service


As for the content, it would offer live TV as well as on-demand content, and it would be much like any cable service in the sense that it would be a premium service, offered in bundled packages.  The set-top box will also update on its own, managing the latest software versions as we now do with most our mobile handsets.

“What consumers want is choice, control, and convenience,” Huggers said. “If bundles are bundled right, there’s real value in that…. I don’t believe the industry is ready for pure a la carte.”

Intel knows that consumers have gone all out for mobile, diminishing PC demand and forcing the chipmaker to rethink its products, distribution and marketing strategies.  Looking to leapfrog the competition, Intel is coming out the gate with a consumer-facing service for personalized recommendations.

Dipping into new markets


One challenge will be device compatibility  and so far Intel’s provided few details on its distribution strategy on the gadget side.  While Huggers did not say which devices would be compatible with Intel TV, he said that more details will be announced at a later date.

But given the current set-top market, ripe with Apple and Google, Netflix and Amazon, Box and Comcast, what can Intel possibly provide that we haven’t already seen?  This is an important consideration for Intel as it dips into new market opportunities in the consumer electronics space, as contributing editor John Casaretto points out.

“They have a challenging road ahead of them and one would have to think that in order to really compete, they have to really do some compelling things like thrown in some subsidized broadband.  If that’s the price point, then it doesn’t really do it to differentiate itself from traditional cable,” Casaretto said.

He added that a ton of advanced features, like DVR functions, and a compelling lineup of programing could do the trick.  As for the smartphone availability of Intel TV, Casaretto stated that cable providers shouldn’t worry too much about the shift to consuming entertainment on mobile devices, since programs are often better on bigger screens.  Still, consuming short programs while on the go is becoming a fad, and Casaretto expects we’ll be seeing some huge changes in this area.

See Casaretto’s full analysis below.

Huggers knows that there are many skeptics with regards to their new project but he believes that they will be able to deliver the service beyond expectations.

“We have assembled a team of people who have literally dedicated their careers to digital media,” Huggers said. “At the end of the day, what I would say to skeptics is it’s fine to be skeptical. But at least give us the benefit of the doubt and judge us on the basis of what we ship, nothing else.”