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Rumors of Intel's entry into TV grow

An Acer Aspire One netbook with an Intel Atom processor is displayed at the Intel Corp. booth at the 2009 International Consumer Electronics Show.

There are rumors that chip-maker Intel could be unveiling a TV set-top box at the Consumer Electronic show next week.  It’s not Intel’s first foray into television. Google initially used Intel hardware for Google TV but then changed its mind. So why is Intel making another attempt at getting it’s hardware into your living room?

One reason is that PC sales are down, which is not good for Intel. So the idea is that making a TV set-top box will create new demand for the company’s hardware.

Dan Rayburn is a vice president at Streaming Media.com.  He says that’s a nice best case scenario. “But think of how many new devices come out each year and how many actually get sold,” he says.

Rayburn is skeptical of Intel’s ability to turn a profit because in order to be successful Intel will need content, which is not cheap.

“I mean look at Netflix," he says. "They’re spending billions of dollars a year, and they’re not even profitable this year and probably not next year either.

But according to Gus Richard, a senior research analyst at Piper Jaffray, Intel may be entering into the TV market for a different reason. It could have a secret weapon in the form of patents it owns from its purchase of the security software company McAfee. With those patents Richard says, “you could provide a way to proliferate content where someone can’t steal it or it becomes far more difficult to steal.”

That would make Intel’s hardware very attractive to content providers who are worried about piracy. “If you could fix that problem right that’s a huge value,” says Richard.

The keyword there is “if.”

About the author

David Weinberg is a general assignment reporter at Marketplace.

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