A question of margins
It's likely that Intel backed out of smart TVs because it didn't see much of a profit margin in the category. About the only connected media player priced above $100 that has had any success is D-Link's Boxee Box. The $299 Intel-powered Logitech
I also wouldn't look to Internet-connected television sets for better margins either. Screen size and resolution do more to set the price than Internet connectivity, which is treated almost as a bonus feature.
Maybe TVs don't need to be smart ... yet
In truth, the lack of demand for smart TV devices isn't that surprising. At the moment, the only reason most of us want to connect our TV to the Internet is so we can watch streaming services like Netflix
- Starz backed out of negotiations with Netflix because it felt the price of the streaming service was too low.
- The most exciting content coming to Microsoft's
(Nasdaq: MSFT)Xbox TV will require signing up for a subscription TV service.
(Nasdaq: CMCSA)plans to launch a new set-top box platform that will incorporate a lot of the features of smart TV devices.
All of this means that while smart TVs are gaining steam, they will probably remain a niche product for a while.
It's all about tablets these days anyway
Because smart TV devices are unlikely to generate big returns, Intel made the right move in focusing its resources on tablets. Right now, ARM
Given that Windows 8 is currently the most desired tablet operating system and stands to potentially exacerbate the problem of shrinking PC sales when it launches, Intel's best bet is to develop a more tablet-friendly processor.
Fool contributor Patrick Martin owns shares of Netflix. You can follow him on twitter @TMFpcmart03. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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