Intel (NASDAQ:INTC) is expanding into reality TV through a partnership with Time Warner's (NYSE:TWX) TBS, according to The Wall Street Journal. The two companies will launch a show called America's Greatest Makers, in which inventors produce competing wearable devices to win a $1 million grand prize.
The show will be helmed by Mark Burnett, who created the hit reality TV series Survivor, and premiere next year on TBS. Select clips will also be distributed to other Time Warner cable networks, including TNT, Adult Swim, and CNN. At IDF 2015, Burnett declared that America's Greatest Makers would be a "huge cross-platform media event."
Why is Intel doing this?
While this seems like an odd move for Intel, it actually complements its efforts to shift the focus away from its struggles in PCs and mobile devices.
The slowdown in global PC shipments, which Gartner claims fell 9.5% annually in the second quarter, caused Intel to slash its full-year revenue forecast by nearly $1 billion in March. It's also been heavily subsidizing mobile OEMs with steep discounts on Atom chips, co-marketing agreements, and financial assistance in redesigning logic boards. Those desperate subsidies caused its mobile unit to post an operating loss of $4.2 billion last year -- down from a loss of $3.1 billion a year earlier.
Intel hopes that growth in the Internet of Things (IoT) market -- which consists of everyday objects connected to each other and the cloud -- can eventually offset those losses. Networking giant Cisco expects the number of connected devices to double from 25 billion this year to 50 billion in 2020.
To capitalize on that growth, Intel produced the button-sized Curie module, which can be installed in wearable devices and other objects. Intel also launched Edison, an SD-card-sized computer with an application processor, storage, and wireless connections. Both Curie and Edison run on Intel's Quark line of 32-bit SoCs, which are designed for tiny devices that consume minimal power.
Slow but steady growth
To accelerate the development of these devices, Intel launched a dedicated IoT division in November 2013. Last quarter, revenue at the unit rose 4% annually to $559 million, accounting for 4% of Intel's top line.
That growth doesn't sound impressive, but Intel is expanding the business through acquisitions and partnerships. Last March, it acquired fitness-tracker maker Basis Science, which launched its first health-tracking smartwatch, the Basis Peak, later that year. It partnered with SMS Audio to make health-tracking headphones and developed the high-end MICA "smart bracelet" with fashion retailer Opening Ceremony. Intel is also collaborating with Google to develop wearables and smartwatches for Fossil and LVMH's Tag Heuer.
All those moves widen Intel's defensive moat against ARM Holdings (NASDAQ:ARMH), which dominated the smartphone and tablet markets by licensing its cheap and low-power designs out to leading chip makers. Intel doesn't want ARM to control the growing wearables market in the same way, so it's trying to boost the visibility of its IoT modules.
ARM might have the backing of chip-making giants like Qualcomm and MediaTek, but its marketing strategy also depends on those chip makers. On its own, ARM doesn't have the resources to launch an "ARM Inside" marketing blitz like Intel.
Intel, however, has deep pockets and isn't shy about spending money on IoT-related acquisitions, partnerships, competitions, and promotional efforts. That's why it held a "Make It Wearable" contest last year for aspiring developers. Nixie, the wearable "selfie drone" that flies off a user's wrist, won that contest and claimed the $500,000 grand prize. In exchange, Intel got plenty of free publicity from the media coverage.
Intel has also opened seven "IoT Ignition Labs" worldwide, which showcase IoT technologies and provide developers with tools, resources, and expertise to foster innovation. Intel hosts "IoT Challenges" at some of these labs, where inventors learn how to create IoT products with Edison hardware.
Therefore, developing a reality TV show with TBS is a natural extension of this strategy. It boosts the visibility of Intel's IoT modules beyond the tech community and promotes them to a mainstream audience. If that push succeeds, independent developers and start-ups might start using Intel's IoT chips more than ARM-licensed ones.
Leo Sun has no position in any stocks mentioned. The Motley Fool recommends Cisco Systems, Fossil, Gartner, Google (A shares), Google (C shares), Intel, and Qualcomm. The Motley Fool owns shares of Google (A shares), Google (C shares), Intel, and Qualcomm. Try any of our Foolish newsletter services free for 30 days. 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.