It seems that Intel will abandon its ambitions to launch its own virtual cable television service, widely reported to be called OnCue, and try instead to sell its technology to an existing service provider. The new Intel chief executive Brian Krzanich made no mention of the Intel TV service in his first annual investor presentation. Verizon has been suggested as a potential buyer.
Former Intel chief executive Paul Otellini had hired Erik Huggers to head a new Intel Media division and run the project. The former director of future media and technology at the BBC, who previously worked at Microsoft, joined Intel in April 2011. He perhaps underestimated the opposition he would face from media companies but he did not count on a lack of interest from the chip maker.
When Brian Krzanich stepped up from chief operating officer to chief executive in May 2013, he apparently viewed television as a distraction from the core issues facing the chip company, with the decline in personal computer sales and its failure to address the burgeoning market for tablets and smartphones.
Intel had also failed to establish itself in the television business, after an unsuccessful partnership with Google.
Intel Media planned to make its own set-top box, with its own chips, and a slick user interface, to offer a virtual cable television service over the internet. It did not seem to occur that programming providers, which are in some cases also broadband service providers, might not be so keen on the idea.
It looked like it would cost hundreds of millions of dollars just to launch the service. That is not itself a problem for Intel, which has deep pockets, but very little experience in media.
The new chief executive appears uninterested in making a big bet on television and the project is now looking for a buyer. Retail space rented for the launch in New York, Los Angeles and Chicago will instead by turned over to show laptops and tablets from various vendors.
Verizon has been suggested as a possible partner for or acquirer of the project, but that might be wishful thinking.
Verizon has over five million FiOS TV customers and over a hundred million mobile customers. Adopting the Intel Media OnCue package could enable Verizon to expand nationally beyond the footprint of its fibre optic network. Then again, Verizon may not need an Intel solution, with Intel processors inside.
After all, as Intel executives may have discovered, it is not really a hardware problem, or even a software problem. The real interest may be in being able to offer a cloud-based service to reach those smartphones and tablets that do not have Intel inside.