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Summary:

No, Intel won’t be announcing its TV service at CES. But the company is definitely getting closer to revealing what it’s been working on, and a number of juicy new the details about the project, which has been developed stealthily, do sound intriguing

intel media logo

Both Forbes and TechCrunch reported this past weekend that Intel may announce its much-rumored TV service at CES next week. I’ve been told by a knowledgeable source that this is inaccurate, and that there won’t be any announcement or other kind of public appearance in Vegas.

Still, Intel is definitely getting close to lifting the curtain on its plans for the living room. I’ve been talking to sources familiar with the project for a few months now, and done a fair share of digging online as well. Combined with a few previous leaks, a much clearer picture about what Intel is up to in the TV space is emerging: it’s a box, it’s a service, and it’s intriguing, to say the least.

It’s top-secret… but not for much longer

Intel Media's office building may not look like much, but sources have told me that the company is trying to recreate a startup atmosphere inside.

Intel Media’s office building may not look like much, but sources have told me that the company is trying to recreate a startup atmosphere inside.

Intel has been building its secret new TV platform inside a nondescript office building tucked away between two parking structures in a corner of the Intel Campus in Santa Clara, California. From the outside, it looks like any other building on the chip maker’s campus.

But I’ve been told by multiple sources with knowledge of the project that the things going on in the building are anything but dusty old Intel. The project, which has been dubbed Intel Media, is run like a startup in stealth mode.

Intel Media is overseen by a separate board, which includes Intel CEO Paul Otellini as well as Intel Media’s content head Eric Free. There has even been talk of spinning off Intel Media into a separate corporate entity. Intel Media boss Erik Huggers, who previously led the BBC’s iPlayer efforts, apparently prefers to hire outsiders over Intel veterans, and most people at Intel have no clue what’s going on in the building.

That may change soon. Even without any CES announcements, it looks like Intel is getting ready to finally unveil what it’s been working on. Forbes also reported that limited beta tests of the service are going to start in March, and Huggers is scheduled to talk at AllThingsD’s media conference in February, where he presumably has to give at least some kind of sneak peek.

It’s a box… and so much more

Intel media's retail efforts are driven by the dsame guy who brought Jawbone's Jambox to Best Buy and Walmart.

Intel Media’s retail efforts are driven by the same guy who brought Jawbone’s Jambox to Best Buy and Walmart.

At the center of Intel’s efforts is a set-top box manufactured by Intel and possibly Intel-branded as well. The device will be sold on Intel’s website as well as through retail partners. Intel Media has hired Sean Ludick, who helped Jawbone to get its speakers and headsets into the stores of retail giants like Best Buy, Costco and Walmart. Ludick is now is in charge of doing the same for Intel’s TV box.

Of course, Intel’s box will compete with a plethora of other devices at these stores, none of which are selling particularly well. That’s where Courtnee Westendorf comes in. Westendorf worked more than a decade at Apple, where she managed global marketing for the iPhone and iPod. Now, she is head of marketing for Intel Media.

But Intel Media won’t be just about that one single box. The company’s goal is to deliver its video service to all screens, including tablets, PCs and mobile phones.

That will likely include an ambitious licensing play to secure content across all of these devices. Intel’s set-top box will offer access to third-party apps, but also TV content licensed by Intel — something that has been one of the key challenges of the project. Reuters and the Wall Street Journal detailed earlier this year how the company wanted to secure the right to stream individual TV channels over the internet, and Forbes reported this weekend that it will offer consumers the ability to subscribe to individual channels, as opposed to a big and expensive cable bundle. I’m still skeptical about that last part, but we should soon know more.

It wants to beat Apple TV… without being Apple TV

Intel Media executives believe Apple got it all wrong.

Intel Media executives believe Apple got it all wrong.

Intel has made numerous attempts to capture the living room, most recently with its CE4100 chipset, which powered first-generation Google TV devices as well as the Boxee Box. Google TV’s first devices were largely ignored by consumers, and Intel wants to get it right this time around.

But Intel doesn’t want to just build a better Google TV. It wants to dethrone Apple TV, the de facto leader in the market for video streaming devices. Apple executives have long called the current-generation Apple TV a hobby, but the company nonetheless managed to sell five million units in its fiscal FY 2012. However Intel Media executives think that Apple simply isn’t doing it right with its current-generation TV product, I was told by a source.

One example: Apple TV currently offers a combination of VOD and apps, forcing users to make active choices about their TV viewing and making them browse through catalogs of media before they’re able to watch anything. Intel Media boss Erik Huggers, in particular, dislikes this approach, and wants to replace it with a broadcast-like approach of curated channels that require a minimum of interaction. Think Pandora, not Spotify.

It’s developed in California… and London

Much of the UI design for Intel's TV product has been driven by a group of designers that incorporated as W12 Studios this year.

Much of the UI design for Intel’s TV product has been driven by a group of designers that incorporated as W12 Studios this year.

Huggers is known to have strong opinions about user experience, and has gone on the record saying that the user experience of many existing TV services is “absolutely dreadful, completely awful.” He has also been vocal about the power of small teams. One of his inspirations for Intel Media has been Free, the French telco disruptor that built its own IPTV set-top box with a staff of 20 engineers. Those two reasons explain why Huggers has quasi-outsourced the UI design of the Intel TV product to a small team of star designers in London, which incorporated under the name W12 Studios earlier this year.

The team includes a number of people who worked on the BBC iPlayer, and many were previously at key agencies like IDEO, frog design, Method, Schematic and Fjord. “The people that I’ve been able to attract I know very well, because they worked in my organization,” Huggers said in 2011. “These are the guys that have designed industry award-winning services across television, telephone, tablets, PCs.”

The W12 Studios team has taken multiple trips to Santa Clara while working on the project. During that time, the design underwent a number of iterations. I’ve heard that one version looked a bit like Apple’s Cover Flow, while another incarnation has been described to me as having the look and feel of the tile design at the center of Windows 8.

It’s a big bet on Intel’s future… which is uncertain

Intel CEO Paul Otellini has been key to the company's TV initiative. But with him leaving in May, what will the future hold for Intel Media?

Intel CEO Paul Otellini has been key to the company’s TV initiative. But with him leaving in May, what will the future hold for Intel Media?

One source told me that as of six months ago, Intel had already spent $100 million on these efforts. Another estimated that the total spent on these efforts could end up being an order of magnitude higher. That’s real money, even for someone like Intel — and it shows how serious the company is making this new foray into the TV space. That’s because for Intel, it’s not just about capturing the living room. It’s about redefining its own DNA to be prepared for a post-silicon future.

Otellini has long been talking about his desire to embrace services as the future of Intel. The company’s TV service could become a key blueprint for these efforts, for a future in which Intel sells goods and services directly to consumers, as opposed to just powering devices made by others. That motivation was a big reason Otellini brought Huggers on board. Here’s how Huggers recalled his job interview with Otellini:

“I don’t know anything about silicon. Zero. And I told him that. He said: ‘That’s exactly what we need. We need someone who doesn’t understand silicon. We need someone who has launched services, who has worked in a content environment, and who can help bridge that gap.”

It’s worth pointing out that this move towards services has been championed by Otellini, who is going to retire in May. The question is whether his yet-to-be-named successor will share the same vision for Intel’s future, and whether he will give Intel Media a fair chance even if consumers don’t bite right away.

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  1. Kathy Hallstein Tuesday, January 1, 2013

    That’s D2 our closed down Fab!

  2. Apple TV isn’t the market leader for home streaming. Xbox is.

    1. Not if measured by video and music content.

      1. Yes it is. Apple doesn’t stream, it downloads. Xbox streams.

  3. They will need a big fat pipe to allow users to use the service. This means it has to be a company that has the speed for broadband and wireless for cell phones. The only company that really fits that bill is Cleariwre and their Advanced LTE 150+ mbps network.

    1. So the Intel box would come with a ClearWire broadband modem built in?

  4. What OS is it going to run?

    1. Exactly my first thought, and what framework for the UI? Assuming its not Android (which must be the obvious choice), then perhaps some sort of Linux, maybe with Qt, even with basic Android compatibility as a bonus…

      Hopefully not Tizen and HTML5 though, but most likely will be.

      1. Charlie, why do you think Tizen would be a bad idea?

  5. looks very similar to what virgin media offered…

  6. Responsive TV Tuesday, January 1, 2013

    Get the popcorn! Between Ms. Westendorf’s marketing, and the contribution of the team which formerly worked on the iPlayer – a bitter reality for Apple’s branding mechanism, the loss of the brand, iPlayer, and its success with the BBC, Apple will be watching . . . Janko Roettgers said, “one version looked a bit like Apple’s Cover Flow” – you just handed Apple ammunition to try to prevent this tech – please be careful!

  7. Isn’t someone who can “bridge a gap” someone that understands both sides, and not someone who is entirely ignorant of one side? Maybe this is why Otellini is on the way out… I do hope this doesn’t turn into Intels “HP” moment, canning Intel Media as soon as the new bloke gets his feet under the desk.

    Apart from the services that Intel may or may not be planning, if anyone wants a very usable media center get a Raspberry Pi (or one of the other low cost ARM powered equivalents now emerging) and stick OpenELEC XBMC on it – you can stream all your local media and just about every online streaming service (inc. iPlayer) bar the pay-for services such as NetFlix etc.

    Whatever Intel create it will be massively over priced to protect their ridiculous margins. You just need to look at their latest attempt at “cheap computing”, the Next Unit of Computing, which retails at over $300, to get some idea of where this is likely to be priced (substantially lower and the hardware will be a loss leader for the subscription TV and movie services).

    1. Fred, have you tried using Raspberry PI as a media player? It is cheap for a reason.

    2. Overpricing didn’t seem to stop Apple products.

  8. cordcutterguide Wednesday, January 2, 2013

    Who needs fancy new Intel hardware? Give ROKU or give Netflix the rights to the content they need and either one of them could take over the pay TV biz. Problem is that’s not going to happen.

    http://cordcutterguide.com/

  9. “Apple TV currently offers a combination of VOD and apps, forcing users to make active choices about their TV viewing…Intel Media boss Erik Huggers…wants to replace it with a broadcast-like approach of curated channels that require a minimum of interaction. Think Pandora, not Spotify iTunes; AM Radio, not CDs; FM radio in place of concerts.

    Fixed That For Ya.

    THIS—where the Intel geeks who are pretending to have a super-secret project while desperately trying to ramp up the PR excitement level, pick TV shows for us—is the future of television?

    Might work for people who are too stoned, too young or simply groggy enough that they can’t push buttons on one of them new-fangled 1995 remotes. People looking to break out of the 22-minute weekly series and/or to pick up a quick fix of an episode a friend noted was good? Not so much.

  10. I worked in the broadband wireless business in 2003 when Intel announced their major commitment to WiMAX. Hopefully, this initiative will work out better than WiMAX did for Intel…….

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