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Intel: Nothing but the Net

Posted by: Cliff Edwards on August 20, 2008

Has Intel finally come up with a winning formula for conquering the digital living room?
The magic eight ball says maybe. The company’s announcement Wednesday of a partnership with Yahoo! could vastly simplify development of Intel-based hardware with consumer electronics makers. And it finally makes good on the promise of delivering the Internet to the big screen in a user-friendly way.
Intel aims to muscle aside Broadcom, Conexant Systems and other chipmakers with a package of chips costing about $35 each that could dramatically lower costs for makers of HDTVs, set-top boxes and other consumer electronics gear. By combining applications and graphics processors, and memory onto a single hand-sized card, CE makers should save money and be able to design ever-thinner sets.
Anyone who follows Intel has heard this spiel many times before. But the thing that makes it compelling this go-around is the chipmaker’s substantive partnership with Yahoo. I spoke with Intel’s digital home czar Eric Kim and Yahoo! connected TV exec Patrick Barry, who say the two companies have been working for two years to optimize software that would deliver Internet applications like Flickr and Netflix to the television at the touch of a button the remote—and without the cumbersome pc-like interfaces that dominate the market today.
Like blogs, consumers not already in the know soon will become intimately familiar with the word “widgets.” Essentially, Yahoo has created a platform that lets developers easily create portals, or channels, to content sitting on the Web. In human-speak, that means instead of trying to shoehorn a clunky pc into your TV, you could be able to download a movie from Blockbuster, or talk to buddies on Facebook all from the comfort of your sofa.
Intel and Yahoo say the widgets program is optimized to work best using Intel’s chips, but add that TV manufacturers will be able to use rival chips as well. The execs say the first products, likely set-top boxes such as digital video recorders and DVD players, should be hitting store shelves by March 2009, with both the chips and software being built into televisions and cable boxes later.
There are hurdles. CE makers hate offering me-too products, and the level of standardization that Intel is proposing could put them into the same situation that pc makers began to face upon adopting the Wintel standard.
And media stalwarts such as Google and Rupert Murdoch might keep their Facebook, YouTube and MySpace applications to themselves for fear of losing control of potentially lucrative advertising dollars or revenue-sharing deals.
The good news is that Yahoo is making the software customizable for both consumers and CE makers. Like HP’s the computer is personal again, sets then may look the same on the outside but offer a vastly different channel lineup depending on who’s home you’re in. And because the TV business has become so brutally cutthroat, if Intel makes good on delivering a solid, low-cost chip platform, CE makers are sure to bite.
The odd man out here appears to be Microsoft. After years of stubbornly clinging to its symbiotic relationship with the folks in Redmond, Wash., Intel is acknowledging that most consumers interact very differently with their televisions than they do with their pcs (and they certainly want the boob tube to crash a lot less often).
After years of complaining about the slow pace of connected device deployments, things seem finally to be heating up.

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Reader Comments

Rolf Bork

August 21, 2008 12:59 AM

"There are hurdles. CE makers hate offering me-too products"....might even be that Apple style coupling of interactive content and networked CE devices becomes the CUSTOMER DRIVEN hurdle for the pure hardware players.
The business has changed from passive TV towards interactive HDTV web....and this would also limit the remaining life of the set-top box concept. RESIDENTIAL GATEWAYS that double as DIGITAL HOME HUBS can kill any set-top box.
Would expect to see Apple bringing something for Xmas that builds a new platform...and Google will be fast to add services for it.
Rolf Bork, BOD &


August 21, 2008 08:36 AM

This is certainly a slap in the face at Microsoft. But MS has had a decade to do something and eventually turned their back on Intel with the 360 strategy. I like this idea a lot, and with the functions of TVs getting better every year, it might not be long before I upgrade my HD set - even though my previous TV lasted 10 years and this one is less than 2 years old.

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BusinessWeek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, Douglas MacMillan, and Spencer Ante dig behind the headlines to analyze what’s really happening throughout the world of technology. One of the first mainstream media tech blogs, Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.



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