Slumping PC Sales: Will TV Service be the Answer for Intel?

Many were perplexed when Intel revealed it would launch a TV service. But the company, along with other giants such as Apple, Google and Microsoft have wrestled for years with how to become TV providers amidst a market ripe for disruption. And as the pay TV landscape continues to shift, with new emerging social and mobile opportunities, tech companies are well-positioned to step in and exploit.

“Intel’s ambitions make sense given that the company needs a new growth business and has cash to spend,” suggests MIT Technology Review. “PC sales are slumping — research firm IDC recently reported the worst quarter globally since it began tracking data in 1994 — as mobile devices become more powerful PC replacements.”

“Intel’s first quarter earnings report this week reflected this decline, with revenues dropping 6 percent in the PC division that accounts for $8 billion of its $12.6 billion in quarter revenue,” notes the article. “The company’s mobile chip business, meanwhile, is only in its infancy.”

But will this be the solution to Intel’s problems? According to the article, “the economics of the TV business could be especially hard for Intel. It doesn’t own the underlying broadband delivery infrastructure, so it can’t attract customers by bundling Internet and TV service as Google has done with its experimental gigabit fiber network in Kansas City. And if it does succeed in negotiating innovative content deals, other companies like Apple — which, unlike Intel, already have set-top box TV hardware in people’s homes and billing and customer service relationships with consumers — may swoop in from behind and sign similar agreements.”

In order for Intel to find success here, “its aggressive push into the living room must be timed perfectly,” explains the article. “TV programmers are starting to experiment with new Web and mobile delivery formats, and they want to attract a new audience of young people who still like to watch TV but may not want to do so on their couch every Tuesday at 8 p.m.”

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