Intel Corporation (NASDAQ:INTC) is in discussion with Verizon Communications Inc. (NYSE:VZ) Inc to take over the chip maker’s vision to deliver TV over the internet through a new kind of set-top box, says a report from Bloomberg citing sources aware of the negotiations. There’s a chance that if the deal concludes, Intel will part ways with the project, according to the source.
Previously, AllThingsD also reported on the discussions.
Intel to focus on core business
Earlier, Intel Corporation (NASDAQ:INTC) planned to offer a pay TV service in the United States that would be in competition with the likes of Comcast corp and DirecTV. Intel decided upon using in-house set-top boxes, which would channelize programs through the internet. However, in a bid to regain more focus on the company’s core business and gain more traction in mobile phone chips, management decided to scale back the efforts in the TV segment, says Bloomberg.
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Verizon Communications Inc. (NYSE:VZ), which Intel is in talks with, already offers pay TV service, but the company is working hard to explore methods of streaming its FiOS video through options other than its fiber optic network such as wireless and over the internet delivery. Verizon recently broke its joint development agreement with cable companies and it is targeting Redbox Instant as probable streaming service.
Intel was unable to find strategic partners
Erik Huggers, general manager of Intel Corporation (NASDAQ:INTC) Media and a former British Broadcasting Corp. executive said in February that the company is looking forward to launching the service this year. Through this service, Intel plans to offer its customers TV programming through smartphones and mobile devices. Intel wanted to offer both live programming and a large library of video-on-demand content.
Huggers led a team of 300 workers to build the box, and created branding for the service dubbed as OnCue. Intel gave the prototype to thousands of its employees to test the service in their homes this year. However, Intel Corporation (NASDAQ:INTC) failed to cut a programming deal with TV networks for commercial launch.
Intel Corporation (NASDAQ:INTC) was searching for strategic partners like Amazon and Samsung to fund and distribute Intel media. Intel, however, seems to be the odd one out for a Web TV project whereas Verizon Communications Inc. (NYSE:VZ) looks like a good fit.