Intel (INTC +4.89%) is reportedly set to debut a set-top box and "virtual cable service" as early as next week when the Consumer Electronics Show begins. This is not the first time Intel has tried to tap the TV market, but it will be its first time going at it alone. In the past, Intel has partnered with Google for its Google TV platform, which utilized an Internet browser to stream TV shows on network websites. Unfortunately, the plan didn't go so well for Intel -- the next generation of Google TV's was powered by ARM Holdings' architecture.
The plan this time is to release a set-top box with a DVR, which will be rolled out on a city-by-city basis. This in itself isn't very exciting, but if those in the know actually know what they're talking about, Intel may have made some progress in cracking the TV set-top code. Intel is expected to offer smaller, cheaper channel bundles than what traditional cable companies currently provide -- something Apple (AAPL +0.11%) and Microsoft have struggled with. The service will also offer a way to catch up on anything aired in the last month.
Stealth mode inside!
A team of industry veterans from the ranks of BBC, Jawbone, and Apple have secretly come together to run what will be known as Intel Media. With the dream team in place, Intel hopes it can deliver a cable-like service across all Internet-connected screens. Intel has reportedly secured the agreements necessary to stream individual channels over the Internet. If true, this would be the equivalent to the Holy Grail of Internet TV. An a la carte subscription-based model has been the missing ingredient to disrupting big cable's stronghold, which leads me to believe that this aspect should be taken lightly until official word.
Apple's hobby is Intel's dream
Without a substantial licensing agreement, Intel's set-top directly competes against the Apple TV, which sold 5 million units during fiscal 2012. Although Apple considers it a hobby, these sales figures indicate the consumer strength of Apple's brand in a niche-like market. That's not surprising, considering Apple is ranked No. 1 as the most valuable brand on the planet. For comparison, Intel is ranked No. 49, which will likely pose a problem when competing against Apple. That is, unless Intel really has the Holy Grail of Internet television -- something Apple has yet to produce. If that's the case, this becomes yet another reason why Intel shares are a buy for 2013.
