Why Intel Corporation (INTC) Gave Up OnCue Internet TV Service

Intel Corporation (NASDAQ:INTC) revealed that one of its primary objectives is to join the internet-based TV service arena by launching OnCue in 2013. The technology giant failed to meet its objective and decided to give up its internet TV project.

Intel lacks content experience, background, and volume

Intel CEO Brian Krzanich explained the reasons behind Intel’s decision for not pursuing its internet-based TV service project during an interview with Ina Fried of re/code. According to Krzanich, Intel Corporation (NASDAQ:INTC) has a good technology, but it is not a big content player. It does not have strong content experience and volume.

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Krzanich said,  OnCue is “actually a very good product, if you take a look at the hardware and the technology. We’ve said pretty repeatedly that the technology is quite good. I could get into the “hows” but it really does have a great user interface. This concept of having three days of everything that is on TV at your instantaneous access is really unique.”

He added. “But at the end of the day, just like when you go home and watch TV, it’s all about content…

When you go and play with the content guys, it’s all about volume. And we come at it with no background, no experience, no volume. We were ramping from virtually zero and so what we’ve said is we are out looking for a partner that can help us scale that volume at a much quicker rate.”

Verizon interested in buying OnCue

A previous report from Bloomberg indicated that Intel Corporation (NASDAQ:INTC) has decided to sell OnCue for $500 million to cover that costs incurred in the project. Verizon Communications Inc (NYSE:VZ) was reportedly negotiating with the chip maker to acquire OnCue.

Krzanich’s did not give any specific comment regarding the reported deal. Technology observers believe that OnCue is a perfect acquisition for the Verizon Communications Inc (NYSE:VZ) because it will be able to offer it as part of its FiOS services.  The telecommunications provider has 5.9 million FiOS internet and 5.2 million FiOS connections. It can automatically leverage OnCue by offering it to its more than 100 million mobile customers.