May 16, 2010 6:07 pm

Google and Intel in web TV launch

Google and Intel are expected to announce a significant breakthrough into consumer electronics and the broadcast industry this week with the launch of a “Smart TV” platform.

Top executives from the Silicon Valley companies are reported to be ready to reveal a deal with Sony, bringing web services to its televisions, during Google’s annual developer conference in San Francisco.

Intel’s Atom microprocessor and Google’s Android operating system are spearheading their assault on set-top boxes and TVs featuring integrated internet services.

The technology companies have had little success penetrating the TV industry to date but both are now seeking to take advantage of service providers and TV manufacturers scrambling to add web capabilities and content.

“The revolution we’re about to go through is the biggest single change in television since it went colour,” Paul Otellini, Intel chief executive, told analysts last week.

At the Consumer Electronics Show, Las Vegas, in January, manufacturers showed off televisions, Blu-ray players and set-top boxes with internet connectivity and services ranging from movies provided by Netflix, CinemaNow and Vudu to channels playing internet radio, connecting to online photo services and adding social networking features such as Twitter and Facebook.

Intel pioneered internet “widgets” on TV screens with Yahoo in 2008 but while many other players have entered the market since, it remains fragmented and has been slow to take off.

“If you had asked me a year ago, I would have said no way Intel and Google could make an impression,” said Kurt Scherf, principal analyst at research firm Parks Associates. “But Intel looks to have gained some traction and the operating system space is so wide open that it’s a case of why not Google at this point.”

Intel said its latest Atom chip offers better audio and video performance, wider and open software support and is cheaper than the competition.

It currently has an order backlog of 1m units for the chip. France Telecom and Telecom Italia are among a number of customers lined up to put the chips in set-top boxes.

“We’re seeing the beginning of explosive growth,” Eric Kim, head of Intel’s Digital Home group, told analysts. “Right now, we’re gearing up for a massive retail launch of [connected devices] this year.”

Google is expected to call on its Android developer community this week to create applications for TVs and its software could prove popular if it also promises advertising revenues for TV manufacturers.

“Consumer electronics manufacturers want a piece of this [advertising] pie and Google is the player in this very crowded space that can immediately offer them revenue share,” said Mr Scherf.

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