- Appoints Huggers to Found & Run New Intel Media Group
- Digital Home Group Merged into Netbook & Tablet Group
Intel, under the hands-on direction and guidance of CEO Paul Otellini, wants to look beyond smartphones, tablets, TVs and consumer PCs, way beyond, so it can plot a course for its future, not just for the near term. To that end, Intel has taken two giant steps.
It has created a new group called Intel Media that Erik Huggers will head. Huggers’ Digital Home Group, except for smart TVs, will be merged into the existing Netbooks and Tablets Group that Doug Davis will continue to operate. The smart TV operation is being closed down except for existing customers. However, the technology Intel is developing for tablets and smartphones can also be used in future smart TVs — one silicon and one ecosystem for smartphones, tablets and TVs a la Apple. Smart, eh?
Intel’s Netbooks & Tablets Takes Over Intel’s Digital Home Group
The Digital Home Group, which Erik Huggers was hired from the BBC earlier this year to run, is being merged into the Netbook and Tablets Groups, not yet suitably named because it will handle technology for some very big markets: tablets, netbooks, cable modem gateways and IPTV. It will not handle smart TVs because that’s being closed. Intel said it will meet all its commitments to existing customers. It will also not produce any new processors for smart TVs beyond those it’s making now.
Doug Davis will continue to head the group, which is responsible for the platform planning, architecture, enabling and marketing of Intel’s solutions for its assigned market segments. Perhaps a more accurate name for the group will be one of the many items on Davis’ to-do list.
Intel sees the TV market as currently being a “footage per dollar” one. Consumers set a budget for what they can spend and then try to buy as big of a screen as possible for less than their budget. Evidence of that is 60-inch TVs that are going for $1,200 and a 42-inch LED smart TV from LG, this year’s model, being sold by Amazon for $650 including delivery to the home and the chip making giant Broadcom exiting the market a few weeks ago.
The economic downturn and increased competition has put brand name makers of TV sets under tremendous pricing pressure. Sony, once the king of high-end TV sets, has lost billions of dollars in the TV market and says it expects to lose millions more. Sony, Toshiba and Hitachi are working together with a government-backed fund to spin off and merge their LCD businesses. (Why not? The US did almost the same for US car makers with loans and advances for “green” cars.)
No one has cracked the smart TV platform yet and that’s why so many have popped up. In some respects Intel is doing what the smart TV industry will have to do at some point: stop and ask where we are going. It’s like the early days of MP3 players, Huggers said, when there were lots of MP3 players but no one was buying. Suddenly Apple entered the market with the iPod and the iTunes store and player, perfectly synched, and consumers started buying millions of its players and songs from iTunes.
Perhaps the straw that will break the camel’s back in TV pricing is that two major new factories are being built in China to make displays, according to Intel. The golden age for buying TV sets will continue but goodness help you if you’re trying to make them for a profit.
As long as the pricing pressure on TVs continues, TV set makers don’t want to add any feature they don’t have to — although it’s widely acknowledged that the tipping point for smart TVs has been passed. All TV sets will be smart, just like they all now have color.
There’s another reason for Intel to meld IPTVs and tablets. As Apple has clearly shown, successful CE makers will have one silicon and one ecosystem. Apple, for example, is not going to use a different silicon family or ecosystem for apps and online store than the ones it uses for iPhones and iPads if it were to launch a line of TV sets.
Let Us Praise the Dead Digital Home Group
The Digital Home Group had some notable successes handling the CE versions of the Atom processor:
- The Boxee Box
- The failed (through no fault of Intel) Google TV that Sony and Logitech made
- The IPTV STB Comcast ordered from Pace
- The snazzy Samsung STB that Liberty Global’s UPC ordered
The follow up on those and others like them will be handled in Intel’s Netbook and Tablet Group.
Intel sees a major opportunity in IPTV boxes — media processors and the gateway/home network businesses. It sees the synergy that’s emerging between tablets and smart TVs plus other smart consumer devices.
The move to all-IP infrastructures by the cablecos and the links between TV sets and tablets were loudly obvious at The Cable Show in Chicago.
The world’s telcos started with IP for their TV technology and the cablecos are rushing to catch up. The race to integrate tablets and TVs takes two forms:
- The use of the tablet as a second viewing device — a mobile TV within the home.
- The tablet and smartphone becomes a companion screen to what’s on the TV, one where viewers can chat with friends and the show’s stars about what they’re watching. It goes beyond allowing viewers to “click” on advertising links to learn more about a product. Ask any parent of teenagers about it.
Intel spokesman Claudine Mangano said, “We believe the future of TV is in IP delivery and multi-screen usages and are aligning our focus to these areas, and with other top corporate imperatives that include ultrabooks, smartphones and tablets.” She made it clear that Intel is not abandoning its existing smart TV customers.
Intel Media Looks Way Ahead
Intel Media is being founded to look beyond the current generation of smartphones, tablets, TVs, PCs and IPTV. It is mandated to answer, “What technology will be needed as the digital media industry progresses?”
Intel is not clear publicly on what Intel Media’s mandate is but in Erik Huggers it has put one of the industry’s leading digital media executives in charge. Huggers is not talking about it very much except to say Intel is very, very serious and ambitious in digital media and that he is super-excited by Otellini’s challenge.
Huggers was previously at the BBC as director of the its future media and technology division until Intel hired him earlier this year. Before that he worked for Microsoft in various digital media projects.
With impossible hurdles in front of him, Huggers led the technology dinosaur BBC into the digital media era. He oversaw the launch of the BBC’s iPlayer for catch up TV. Launched in 2007, it was years ahead of its time and still ahead of anything in the States.
He nearly led the BBC to the forefront in smart TV platforms with Project Canvass, now called YouView. It is an attempt to develop a standard smart TV platform that lets developers easily add apps and CE makers to easily add to their gear. Unfortunately the BBC Trust, which runs the BBC, decided to play politics instead of getting out of the way.
It forced the BBC to bring in seven other companies such as BT, each with a different opinion as to what should be done, to help develop and deploy YouView. Know the story about the committee and the camel? Well, that’s what happened. YouView is still not on the market and the rival HbbTV standard is becoming dominant on continental Europe.
A common smart TV platform would have benefitted consumers and CE makers just as Windows did for PC makers and consumers. Instead the world is awash in smart TV platforms — all incompatible and inconsistent in their user interface — and with some companies changing platforms from year-to-year.
The closest Huggers comes to revealing anything about Intel Media is to say, “For Intel to be successful in digital media, it must have the best access to digital content.” He then says that Amazon is showing the way with its Kindle Fire.
Intel wants Intel Media to sail out into the future of digital media and see what’s there. It has selected the best man for that task. Perhaps Huggers will again be called “director of future media and technology” as he was at the BBC.
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