We previously reported that Intel was moving forward with its planned Internet TV service and set-top box, and noted earlier this month that the chip giant was pursuing programming deals, reportedly offering to pay as much as 75 percent more for content than traditional cable rates. In March, the company started conducting closed trials, code-named the “Black Box Project,” with company employees. CNET has learned that “what they’re using is leaps away from the final product.”

Intel plans to launch hardware and software later this year for a subscription broadband service that will provide viewers with access to live television, on-demand programming and additional content in their homes and on their mobile devices.

“Currently, more than 2,000 Intel employees in Northern California, Arizona, and Oregon are testing the product in their homes,” reports CNET. “The test product installed in each home involves early trial hardware and an old version of the user interface design… The software being tested will have many similarities to the final version — such as how users navigate the system — but the hardware design will be completely different.”

The company’s trial run has been evaluating order taking, logistics, usage habits, quality, stability, performance of the back-end system and responsiveness of the Audience Care customer service system.

Intel continues to create hardware updates based on testing and feedback — although people familiar with the matter suggest that software (in terms of user interface, navigation and look and feel) used during the trial will be similar to that of the final product.

“While Intel has been testing the product for months, it still faces some hurdles,” notes CNET. “One of those is reaching content deals. Time Warner Cable and other cable TV providers have been pressuring channel owners to shun pacts with Intel and other Internet-based TV providers, but Intel has said it would have deals done in time for a 2013 launch.”

“Ultimately we want to deliver a better form of television,” said Eric Free, a vice president and general manager for Intel. “We’re very confident we’ll get the content we need to launch later this year.”

Related Stories:
Intel Confident of Obtaining Programs for Web TV Service, Bloomberg, 6/25/13
Coming Soon: Intel’s Must-See TV, Barron’s, 6/22/13
Sources Say Intel Advancing with TV Service Content Deals, ETCentric, 6/10/13