Why Intel left the TV market
Slow sales of Google TV units apparently prompted Intel to ditch the hyper-competitive TV system-on-chip (SoC) market and shift its focus to smartphones and tablets.
As IHS analyst Randy Lawson notes, Intel may be a giant in the semiconductor field, but Santa Clara finds itself struggling to compete in the TV SoC space.
"In a television semiconductor market characterized by entrenched suppliers and weak near-term growth prospects, Intel was facing enormous challenges in trying to establish itself as a competitor," explained Lawson.
"And with the first-generation Google TV products proving unsatisfactory given their slow sales, it's no surprise that Intel is moving away from the television SoC market."
According Lawson, the Google TV platform had been intended to enable a framework supporting the development of so-called Smart TVs. However, clear standards have yet to be defined for the effort, which was jointly announced in 2010 by Intel, Google, Sony and Logitech.
Nevertheless, a fresh industry trend is developing for the adoption of video processing technologies by new mobile CE devices, which is likely to offer more of a lucrative opportunity for Intel.
"As video consumption and recording capabilities extend into more handheld CE devices, the video-processing algorithms and techniques used in large-screen, high-definition TV sets are finding their way into portable CE devices like smartphones and tablets," said the analyst.
"In particular, functions like image scaling, frame-rate conversion, resolution and color enhancement, as well as noise and artifact suppression are gaining importance in mobile CE devices - where video playback requirements are becoming more extensive, and where increasing display resolutions even for displays sized smaller than 10 inches is driving the need for higher quality."
As such, it makes perfect sense for Intel to focus its development efforts in the mobile CE application processor space.
Indeed, not only are the margins greater than in the TV SoC industry, but the chipmaker can also stake a place in the new field to support the convergence of features between video-processor uses for TV and those for portable media-consumption devices.
"All told, the expansion in sales of smartphones and media tablets - two key CE application markets - is expected to outstrip growth in the traditional CE equipment space held by TVs, set-top boxes and DVD players or recorders.
"And while Intel plans to continue supporting the CE4100 chip device for the set-top box market, further product development specific to the TV space has been shelved. Instead, resources are now expected to move to higher-priority projects focusing on smartphones and tablets," added Lawson.