Intel plans Internet television service as PC chip sales wane

Intel Corp plans to launch an Internet television service this year with live and on-demand content, entering a hotly competitive race as its core PC business erodes.

Shifting into an unfamiliar and potentially costly market in which Intel lacks experience and relationships, Erik Huggers, vice president and general manager of Intel Media, said he is negotiating with content providers.

He said hundreds of Intel employees and their families are already testing a set-top box the company will sell as part of the service.

Intel's move puts it into competition with heavyweights like Apple, Amazon and Google that believe the $100 billion cable television ecosystem is ripe for change.

The chipmaker plans to offer consumers smaller bundles of content than those currently offered by cable operators, Erik Huggers, vice president and general manager of Intel Media, told the AllThingsDigital "Dive into Media" conference on Tuesday.

Asked if Intel has inked any content deals, Huggers said he is working with providers and is confident Intel will have a compelling product to launch this year.

"We have been working for (the past) year to set up Intel media, a new group focused on developing an Internet platform," Huggers said. "It's not a value play, it's a quality play where we'll create a superior experience for the end user."

Intel has struggled to get its virtual television service off the ground due to unwillingness on the part of major media content providers to let the company unbundle and license specific networks and shows at a discount to what cable and satellite partners pay, according to sources.

Silicon Valley has been taking aim at the U.S. cable television market - dominated by major distributors such as Comcast and DirecTV Group and program makers like Walt Disney Co and Time Warner Inc. Technology companies see opportunities due to reasons ranging from shifting viewer habits to mounting programming costs.

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