First on PlayBlox!: Intel creates drone record

Watch: @Intel stuns at #CES2016 keynote with record for most drones airborne simultaneously https://t.co/k477ZCxTMP pic.twitter.com/K59Mv4ejbl

— GuinnessWorldRecords (@GWR) January 8, 2016

Intel, Micron, Toshiba promise storage that's fast and roomy

Intel and Micron will ship flash-memory chips this year with 256-gigabit and 384-gigabit capacity. A tiny 16-chip package could hold 768GB.Intel

Intel, Micron and Toshiba want to give you the best of both worlds when it comes to flash memory, the storage technology used in smartphones, tablets and higher-end laptops.

Today, smartphones and tablets often don't have enough room for all your apps, photos, videos and music. And laptop buyers have to decide between hard drives, which are cheap and roomy, but slow, and flash-based solid-state drives (SSDs) that are fast but expensive.

A partnership between Micron and Intel, though, is now beginning to yield flash chips with triple the capacity of the top alternative from Samsung. And Toshiba announced a competing chip that matches Samsung's capacity, a competitive move that should help maintain pricing pressure.

The new chips could mean a 3.5TB flash drive for PCs that's the size of a stick of gum, Intel said. Today's top-end laptops with 1TB SSDs are very expensive options, but more affordable chips could help fast flash memory displace hard drives in lower-end PCs.

Both of the new chip designs -- as well as Samsung's chips introduced last year -- take a similar approach called 3D stacking to provide more bits. In essence, the idea is to emulate Manhattan's skyscrapers rather than the sprawl of Los Angeles.

"3D is going to be one of the ways to go to keep Moore's Law going," said Michael Jackson, an associate professor of microelectronic engineering at the Rochester Institute of Technology, referring to Intel co-founder Gordon Moore's observation on steady advances in processor capabilities.

This Toshiba schematic illustrates how multiple layers of flash memory are stacked into a single high-density product.Toshiba

As with skyscraper apartment buildings, the number of cells you can put in a given area still matters. And so does the number of occupants you can put in each cell. The Intel-Micron approach offers two options for this latter characteristic: two bits per cell initially for chips that store 256Gb total and, later, three bits for 384Gb chips. Toshiba stores two bits per cell for its 128Gb chips, but three-bit technology is "essential" and in development, the company said.

Many of the gains made by flash memory have come by spreading more and more memory cells onto a two-dimensional chip surface. The Intel-Micron approach matches Samsung's with 32 layers of flash memory, and Toshiba goes a little farther with 48 layers. The companies are delivering the first samples today; Intel, Micron and Toshiba all expect to ship final products later this year.

Flash memory is a big and growing market, with spending expected to reach $27.4 billion this year then grow by 6.5 percent to $29.2 billion in 2016, according to IHS analyst Michael Yang. But it's also a tough market in which the cost per gigabyte erodes rapidly.

"To stay competitive, suppliers must invest large sums of capital -- more than $4 billion per fab [manufacturing plant] -- in order to reduce cost and develop products," Yang said.

With flash memory, several chips are mounted into a single package for use in products like SSDs, and SD cards for cameras and phones. Intel wouldn't disclose the size of each memory chip, but it said a 16-chip, 768GB package is the size of a fingertip.

By comparison, today's top-end smartphones come with only 128GB. And Apple's new MacBook comes with two SSD options, 256GB and 512GB. The price difference is $400, though the higher price also covers a slightly faster processor. For a high-end Dell M3800 laptop, upgrading the SSD from 256GB to 512GB costs $434, and going up to 1TB costs $735. No wonder Intel, Micron and Toshiba are eager for a better showing in the market.

And they could all use a better showing.

Intel and Micron banded together to take on flash powerhouses like top-ranked Samsung, which held 28 percent of the flash-memory market in the fourth quarter of 2014, according to Statista. Micron has 14 percent and Intel has 8 percent. Toshiba is doing better with 22 percent, but its share has been slipping.

Flash has been a major success in the computing industry, but there are other contenders waiting in the wings. IBM is among those working on an alternative called phase change memory (PCM), and a startup called Crossbar hopes for 1TB storage chips with its approach, called resistive RAM (RRAM).

TAG Heuer teams up with Intel, Google on smartwatch

Swiss watchmaker TAG Heuer is the latest company to move into the increasingly crowded smartwatch market.Getty Images

TAG Heuer, the 155-year-old Swiss watchmaker, is embarking on a new tradition, with the help of Google and Intel.

TAG announced Thursday a new partnership with the two Silicon Valley giants to create a mechanical watch embedded with new tech features. Intel will supply the processor and Google will provide its Android Wear operating system. TAG made its announcement at the start of Baselworld, an annual conference in Switzerland for watchmakers and jewelers.

The TAG Heuer, Intel and Google partnership could deliver a worthy rival to the the highly anticipated Apple Watch, scheduled to ship April 24 and priced between $349 and $17,000. The TAG watch could also lend credibility to Google's fledgling wearable operating system, which Googleunveiled last March, and give the rare mechanical smartwatch a competitive edge against the more prevalent digital-faced design. Tag's watch will be the first Swiss Android Wear smartwatch and Intel's first effort with Android Wear, Intel said.

"This is really the first product of its kind coming from a luxury watchmaker," said Intel spokeswoman Ellen Healy.

TAG will provide details on pricing and features around the fourth quarter. The watch should be available by the end of this year. The company is expected to build a digital replica of the original TAG Heuer black Carrera watch, according to Reuters. Certain new models of the Carrera watch can cost roughly $3,000 to $5,000.

Traditional watchmakers such as TAG have been facing competition from a growing list of smartwatch makers, including Samsung, Sony and Pebble. Developing a more traditionally minded smartwatch might help TAG stay relevant in the digital age while remaining true to some of its watchmaking roots. That could have been tougher to accomplish than it sounds.

In a January interview with Bloomberg, TAG CEO Jean-Claude Biver explained that his company can't produce the chips, hardware or applications for a smartwatch. "Nobody can produce it in Switzerland," he said.

"The hardware and the software will come from Silicon Valley," he continued. "But the watch case, the dial, the design, the idea, the crown, that part of the watch will, of course, be Swiss."

Intel's deal with TAG closely matches a handful of other partnerships the chip giant has made in the past few months with makers of luxury and fashion-focused clothing and accessories. In September it announced a tie-up with design house Opening Ceremony to create the MICA luxury smart bracelet. The company that month also said it's working with watchmaker Fossil Group to develop "wearable technology for the fashion industry." And in December, Intel said it had a multiyear R&D agreement with Luxottica Group to add smart technology to luxury eyewear. So far, Intel's MICA is its only wearable to reach the market.TAG timepieces will include some of the more typical functions of a smartwatch, such as GPS or health monitoring, Biver said in the interview, along with brand-specific applications such as connections to the sports that TAG sponsors.

Such partnerships are important for Intel to grab an early stake in the emerging wearables market. It's learned the importance of timing. The world's biggest chipmaker missed the explosive rise of smartphones and has been playing catch up in that space ever since.

"For Intel, it's just another proof-point in our progress," Intel's Healy said of the TAG deal.

Intel says it's time for work without wires

An example of an employee using Intel's wireless-display technology.Intel

Intel is getting one step closer to its goal of eliminating cables from personal computers, saying Thursday that its newest chip for work computers -- which packs in several wire-free features -- is now available.

The fifth-generation Core vPro processor provides improved performance, longer battery life and better graphics than its fourth-generation predecessor, Intel said. On top of that, the chip provides two new functions to power a more wire-free workplace. It includes Intel's wireless display technology, which is designed to let employees share presentations on conference room displays without the need for cords, and wireless docking, which enables users to connect their laptops to a large display, keyboard and mouse. These two features were still mostly in testing in the previous generation.

"We aim to transform the user experience by helping them compute from virtually anywhere without the clutter and burden of wires," Tom Garrison, general manager of Intel's business client platforms, said in a statement.

Intel, the top maker of desktop and laptop chips, has said it plans to create a wire-free PC by next year. A wireless and tangle-free computer has long been a goal in the tech world, but the idea has been slowed by the need to connect to peripheral devices, like a keyboard and display, as well as a power source. In recent years, advances in wireless charging and superfast, short-range wireless connections using WiGig technology have brought the idea closer to reality.

The new chips are also way for Intel to try to stay in step with a growing trend of people using their computers on-the-go and working from home. To help ensure corporate information is still protected, regardless of where a company computer may be, Intel created the Core vPro line specifically for work PCs. These chips include stronger security measures than Intel's consumer chips, and they allow IT departments to access corporate computers remotely, even when they're turned off, so technicians can repair or upgrade devices from any location.

Intel's vision of a wires-free workspace.Intel

Intel is also hoping these new wires-free features can help it keep up demand for new PCs, even as more consumers are using smartphones andtablets for their daily computing needs. After the PC market had been in decline for more than two years, it showed signs of stability in 2014, which has helped boost Intel's profits and stock price.

Along with the Core vPro for business, Intel in recent months also started shipping its fifth-generation Core i-series chips for consumer desktops and high-end laptops, and the Core M chip for laptops and tablets. All three sets of chips use a new 14-nanometer architecture. The Core i-series also includes wireless display features, known as "WiDi," but the vPro provides a stronger set of security measures.

The PC market is reviving, and so is Intel

Intel's earnings today suggest some life left in the PC business.Sarah Tew/CNET

The personal computer isn't back -- not yet anyway -- but it's not dead either.

The changed fortunes of the once downtrodden PC could be seen front and center in Intel's latest earnings report, issued Thursday. The company wrapped up a solid 2014 by announcing its first full year of revenue growth since 2011 and another quarter of better-than-expected profit, driven in part by rebounding PC revenue.

The results sync up with research firm Gartner's assessment that the desktop and laptop market is now experiencing "slow but consistent improvement," following more than two years of declining sales as users flocked to smartphones and tablets. The change can be attributed to a handful of factors, including Microsoft stopping technical support of its Windows XP operating system last year, forcing users to upgrade to newer devices, as well as the rise of hybrid tablet-laptop computers, dubbed "2-in-1" devices.

Intel, whose chips power most PCs, is a big beneficiary of this change. In 2012 and 2013, the Santa Clara., Calif.-based company posted lower overall sales. However, as more businesses and consumers have been upgrading their computers, Intel in 2014 snapped that downward slide, saying revenue rose 6 percent, to $55.9 billion.

"I'm feeling pretty good about where we are in the PC market," CEO Brian Krzanich said during a call with analysts Thursday, referring to devices coming out with new technologies and slimmer designs.

Intel's fourth-quarter revenue was also up 6 percent, to $14.7 billion, and net income rose 39 percent, to $3.7 billion, from a year earlier. Its per-share earnings of 74 cents handily topped Wall Street's expectations by 8 cents a share.

The chipmaker isn't out of the woods yet. Its shares were down about 1 percent in after-hours trading because it forecast slightly lighter-than-expected revenues in 2015, suggesting uncertainty over whether consumers will keep buying new PCs.

Still, plenty of other companies are gaining from the latest PC trend, from Apple posting blockbuster Mac sales to Lenovo managing double-digit shipment growth last year, according to Gartner and IDC. Intel, whose future is tied to the PC perhaps more than any other firm, hopes to continue this march upward with the release this month of its long-awaited fifth-generation Core i-series processors and its RealSense 3D camera technology being integrated into more computers. Microsoft's release ofWindows 10 later this year could also help boost sales.

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As the laptop and desktop market shows signs of revival, many PC makers used the Consumer Electronics Show this month to show off laptops that are lighter and more powerful, with longer battery life, including the 1.7-pound Lenovo LaVie and the Dell XPS 13, with an aesthetically pleasing thin display frame.

Intel said Thursday that its fourth-quarter PC sales rose 3 percent from a year earlier to $8.9 billion, as it sold more PC chips but at slightly lower prices, and data center revenue rose 25 percent, to $4.1 billion, helped by the rising demand of Intel chips in cloud-computing servers.

But while Intel's PC and data center business enjoyed a strong 2014 -- helping drive the company's stock up about 40 percent last year -- the chipmaker has been losing billions of dollars trying to build up a mobile-chips business. In November, Intel said it would combine the struggling mobile chips group with the PC division to try bolstering mobile sales.

The mobile division's numbers were just as bleak in the latest quarter, with revenue going negative -- a rarity for any income statement -- because of Intel paying subsidies to customers to take its mobile chips. Revenue was negative $6 million on a $1.1 billion loss. Total losses for the year were $4.2 billion. The company has said it will significantly reduce its mobile losses in 2015.

Krzanich this week attended a conference hosted by the civil rights nonprofit Rainbow/PUSH Coalition, where he told the crowd the initiative would include reviewing the diversity statistics of Intel and its suppliers, as well as increasing the diversity of Intel's board in the future. Portions of the $300 million, Krzanich said, would go to scholarships and K-12 programs, and to boosting diverse hiring practices and funding startups led by minority entrepreneurs.Separately, CEO Krzanich last week made waves in the tech world at CES by unveiling Intel's new $300 million diversity initiative, with the company looking to boost the number of women and underrepresented minorities in the industry.

Jesse Jackson, who founded Rainbow/PUSH and interviewed Krzanich at the event, called the effort "a breakthrough in leadership."

​Google extends Intel love affair with new Bay Trail Chromebooks

• by Seth Rosenblatt 
   @sethr
 



Google and Intel ready a new slate of Bay Trail-powered Chromebooks.James Martin/CNET

SAN FRANCISCO -- Google and Intel dabbled with a dalliance last year, but now they're all in as the two tech titans revealed a new lineup on Tuesday of more than 20 Intel-driven devices across several major hardware manufacturers that all run Chrome OS.

The partnership sees Intel-powered Chromebooks jump from four Haswell devices announced in September to a vast range of Bay Trail, Haswell, and 4th generation Core i3 laptops and desktop boxes. Intel has a long partnership with Google's Chrome OS, stretching back to the original Chrombook prototype, the Cr-48, and part of today's announcements was that all the Chrome OS devices shown off at the event had their Intel chips made using conflict-free metals. The news marks the strongest commitment yet between the two companies

Chromebooks are laptops for Google's Chrome-based operating system. They first debuted as a public prototype in late 2010, with the first Chromebook laptop reaching consumers six months later. They currently make up a quarter of the sub-$300 market, and are used in more than 10,000 schools across the US -- up from 5,000 half a year ago.

Chromebooks, as well as their desktop cousins, called the Chromebox, give Google a toehold in parts of the wider computer business where Android isn't available.

Rumors of a Chrome OS tablet have proven to be wrong again, but the new Celeron Bay Trail Chromebooks tout 11 hours of battery life on devices made by most of the major PC makers: Acer, Asus, Dell, Hewlett-Packard, Lenovo, LG, and Toshiba. Notably missing from the lineup is Google's first commercial Chrome OS partner, Samsung.

The news follows the announcement of Lenovo's first consumer Chromebooks last night, including the N20p touchscreen model. Today, Lenovo announced that the Yoga Chromebook will be available in a 64-bit model powered by the energy-sipping, high-speed Bay Trail chip.

Other new Bay Trail-driven devices include the 2014 model of Acer's Chromebook and Asus' 11.6-inch C200 Chromebook and 13.3-inch C300 Chromebook, shipping later this summer.

All the new Bay Trail Chromebooks will come with 802.11ac Wi-Fi chips.

Not all of the new Chrome OS-devices are Bay Trail-based Chromebooks. Acer and Dell debuted new 4th generation Core i3-powered laptops, Dell with an i3-driven update to the Chromebook 11, and Acer with an update to its C720 Chromebook for $349.99 available later this year.

New details emerged for two previously announced Chrome OS devices. HP's colorful Haswell-powered Chromebox will arrive in US stores in June, while LG's Chromebase, the 21-inch all-in-one on display at CES 2013, will hit Amazon, Fry's Electronics, Micro Center, Newegg, and Tiger Direct on May 26 for $349.

As Google and Intel develop a deeper backbench for low-cost Chrome OS devices, one big question looms large for their future: What about the high-end market?

Microsoft's not saying much right now, but it's hard to imagine Redmond will sit idly by as Intel diversifies its operating-system partnerships.

Exclusive: Nike FuelBand engineers courted by Nest, Oculus, Intel, and Microsoft

Sarah Tew/CNET

• by Nick Statt 
   @nickstatt

Nike engineers and other hardware and manufacturing experts from the company's FuelBand team are at the top of the recruitment list for high-profile tech firms racing to deliver new products in emerging categories like wearable technology.

Smart-device-maker Nest, now owned by Google after a $3.2 billion acquisition in January, is among the first in line to scoop up Nike members who were let go. Nest reportedly flew members of its team to Nike's worldwide headquarters in Beaverton, Ore., on Thursday, according to a story by TechCrunch. Nest, the maker of smart thermostats and Internet-connected smoke detectors, set up an "impromptu interview session" at a local hotel to gauge the interest of FuelBand engineers in joining its team in Palo Alto, Calif.Last week, Nike fired a majority of its wearable-hardware team -- as many as 55 people in the 70-person unit -- within its Digital Sport division, CNET has learned. Nike CEO Mark Parker todayconfirmed that the company is shifting its focus to software. Many FuelBand employees are staying on at Nike through the end of May, which marks the end of the company's fiscal year.

This flyer, provided to TechCrunch by an anonymous tipster, was allegedly handed out to Nike employees at its Beaverton, Ore., headquarters Thursday.TechCrunch

Microsoft, Intel, and virtual-reality gear maker Oculus VR, which was acquired by Facebook last month, are also pursuing members of the FuelBand hardware team, a person familiar with the matter told CNET.

Apple recruiters have also been in talks with Nike Digital Sport members since Nike began development on the FuelBand in 2011, the person said, but it's unclear what relationship the sportswear company has been building with Apple regarding the iPhone-maker's rumored wearable, which is either a smartwatch dubbed the iWatch or a FuelBand-like fitness band. That puts poaching efforts by Apple up in the air, though Nike's CEO Parker has hinted at a partnership.

"I will say that the relationship between Nike and Apple will continue," Parker told CNBC Friday. "And I am personally, as we all are at Nike, very excited about what's to come."

Whether that means Apple has a fast lane to hiring members of the FuelBand team when they do depart Nike is uncertain, the person said.

What would all those other companies want with the architects of an activity tracker?

Oculus, bought by Facebook in a deal worth $2 billion, is flush with cash and eager to expand. It's also trying to take its virtual-reality headset -- which has gone through two developer-kit iterations alongside its second-generation Crystal Cove prototype -- and deliver a consumer product soon. Nabbing hardware engineers would accelerate that process, and Nike's team members come with years of wearable-hardware experience.

Nike has never disclosed sales figures of its FuelBand, but in 2013 the device captured 10 percent of the wearable fitness-tracker market sold through e-commerce and brick-and-mortar retailers, according to the NPD Group. However, Nike sales through its own website and Apple's online store accounted for a majority of FuelBand sales throughout the last two years, the person familiar with the matter added, meaning the 10 percent figure that would appear to tip the scales toward a Fitbit and Jawbone lead in the market is not a fully accurate picture.

As for Nest, the Google-owned startup is now reportedly responsible for more than just smart home devices. After being folded into a new Google hardware division responsible for the company's physical product efforts, Nest, led by Apple's former iPod chief, Tony Fadell, may soon -- or already -- be working on Google tablets and smartphones, even wearables. The recent release of Google's wearable-specific mobile operating system Android Wear makes the possibility of new wearables more likely.

Intel's interest in FuelBand members also makes sense. The company has been investing heavily in the wearable market through key acquisitions like the March 2014 takeover of Basis Science, makers of the Basis Band line of smartwatches. Intel also led funding rounds for Google Glass competitor Recon Instruments and armband-maker Thalmic Labs last year, and is designing its own line of wearable-device chips, called Quark.

At the Consumer Electronics Show in January, Intel CEO Brian Krzanich said the company had been working on wearable projects for six months -- including a smartwatch, and earbuds with a built-in heart-rate monitor -- and planned to deliver those products this year.

Though Microsoft has yet to make a move into the wearables market, it's making significant steps to do so soon and has long invested in experimental research. Last October, ZDNet reported that Alex Kipman, head of Xbox incubation and a leading visionary behind the Kinect camera and sensor, began work at Microsoft's "new devices" division, which is reportedly working on wearables including a Google Glass competitor called Kinect Glasses. In December, The Verge reported that Kipman was working on optimizing Windows software for smaller screens, including a headset and a smartwatch.

The latest piece of the Microsoft wearable puzzle is the company's purchase of $150 million worth of intellectual property assets from Osterhout Design Group, a wearable manufacturer mainly contracted by the government for products used in military operations. So it would appear that wearable engineers are on Microsoft's radar.

While the FuelBand wind down has resulted in jobs lost and an internal redirection toward software, those same engineers who spent years building one of the leading fitness trackers -- and taking Nike to the forefront of the market while transforming its image as a corporation -- will be able to continue pushing the wearable frontier. That the Nike employees will be landing on their feet is a win for everyone, said the person familiar with the matter.

How Intel does 64-bit on 32-bit Android

Intel's Doug Fisher explains the 64-bit kernel on 32-bit Android.Intel

Intel said this week that it's going 64-bit on 32-bit Android. Confused? Intel offered some clarification at its China developer conference this week.

Here's the initial statement Intel released this week:

"Intel...released Android KitKat 4.4 with a 64-bit kernel optimized for [Intel Architecture]. With this release, the company ported, validated, and tested the Android Open Source code on IA, taking on the work that developers typically would need to do on their own. This release will provide the...64-bit kernel support for development of next-generation devices."

Intel's Doug Fisher, general manager, Software and Services Group, expounded on this during his presentation.

He began by saying that Intel is moving everything to 64-bit now. That means it's moving all of its mobile silicon. More-traditional hardware like servers, desktops, and laptops have been 64-bit for years (servers since 2001, desktops since 2004).

But that's just half the battle, because the software needs to be 64-bit too.

So, he went on to explain and demonstrate how a kernel -- a core piece of the operating system -- that's 64-bit can begin to provide some of the benefits of a full 64-bit OS.

"So all of these devices that have 64-bit capability [in hardware] will now have a 64-bit kernel running on that. So, when you run Android, which is a 32-bit environment on top of that 64-bit kernel, you're getting the advantages, even in a 32-bit environment, of the 64-bit kernel," he said.

Fisher proceeded to demonstrate a 32-bit Android application -- a ray tracer. One part of the screen ran Android on a 32-bit kernel, the other on a 64-bit kernel.

Needless to say, the application taking advantage of a 64-bit kernel and its libraries offered better performance.

"You can see the performance difference already," he said.

Why all the fuss about 64-bit? Well, when Apple did its big 64-bit reveal at the last Worldwide Developers Conference, it shocked everyone, including heavyweights like Qualcomm. And, yes, Intel too.

Qualcomm, in short order, started making 64-bit chip announcements. It galvanized Intel too. The company finally moved the Windows 8.1 tablets to 64-bit this year and is now trying to set the pace for Android.

Intel unveils Braswell architecture for Chromebooks and budget laptops

Intel has taken the wraps off a new product codenamed Braswell, which will succeed the current Bay Trail platform and be manufactured on the upcoming 14nm process. Bay Trail is currently sold as Intel Atom, Celeron and Pentium products, which are usually found inside low-cost entry-level laptops.

Like its predecessor, Braswell will be an SoC (system-on-a-chip) product. Intel's new smaller manufacturing process will allow for faster speeds and improved performance in addition to improved power savings and less heat generation. Braswell could also see adoption in convertible laptops, desktop PCs, all-in-ones, and embedded systems. 

Intel's 14nm transition will include the Cherry Trail platform, announced earlier, succeeding Bay Trailin tablets, while Mooresfield succeeds it in smartphones. Braswell-based Celeron and Pentium CPUs will make up the bottom end of the PC market, with Broadwell-based Core i3, i5 and i7 will cater to the mid-range and high-end.

Intel made the announcement at the Chinese edition of its annual Intel Developer Conference, which is currently in progress in Shenzhen. Timelines for the launch of these chips and products powered by them have not been specified.

Intel is also specifically acknowledging the growing popularity of Chromebooks. The company has announced that over 20 Chromebooks will hit the market with Braswell processors. As Intel looks to ChromeOS and Android to help it compete in the mobile devices market, it will also aim to reduce the prices of entry-level tablets to under $100 (approximately Rs. 6,000).

The lesson of Intel TV's demise: We failed, and so can you

(Credit: Lindsey Turner/Creative Commons Public License)

Intel was set to revolutionize television.

In fact, Erik Huggers, the head of Intel Media, said in February that this would be the year Intel shakes things up. After all, he had a small army of 300 at work and more than 2,000 Intel employees testing OnCue, a new box and service that would allow users to watch live TV, on-demand video, and other Internet-based offerings like video apps in one package.

Now, with 2013 in its final weeks, Intel's goal for OnCue has morphed into securing the best payday it can from somebody who will take the venture off its hands.

Erik Huggers, head of Intel Media, speaks at the AllThingsD media conference.

(Credit: Screenshot by Shara Tibken/CNET)

Intel is just one company attempting -- and failing -- to change the TV industry, underscoring the difficulties involved with convincing the major players to move out of their comfortable and lucrative business models. There are lessons that can be gleaned from Intel's botched project, lessons that should be heeded by the likes of Apple, Google, and Sony, which are all said to be chasing the same vision.

Their goal is to leap onto the biggest screen in the household, where Americans still spend the majority of their time watching media, and deliver what cable and satellite companies do now and more, all in one.

Luckily for them, the most crippling of OnCue's problems was specific to Intel -- apathy of new management. Yes, all the tech giants must jump over some of the same hurdles, but we know other players have more of a spring in their step than Intel does: deeper pockets and more knowledge about media are examples. But the reasons OnCue lacked appeal for Intel's new CEO are the same snarls that Intel's tech competitors must untangle to make Internet-based pay TV a reality.

More money, more problems
Unfortunately for all tech companies eyeing Internet TV, the problem that rankles cable and satellite customers most -- climbing bills -- is a problem technology can't solve.

The hard part is content. Be it TV shows, sports programs, or live events, content is expensive to produce and it's expensive to license.As Intel proved, the easy part was creating a new technology to deliver television with a user interface that beats cable and satellite. Test versions of OnCue have been deployed in Intel employees' homes for months.

Erik Bannon, analyst at IHS, called it the biggest barrier to tech companies. Media companies not only negotiate for carriage fees, he said, but also aim for a new distributor to guarantee a minimum number of subscribers.

"Out the door, you're paying for a million subs, whether you have zero or a hundred thousand," he said, noting that fee payments aren't going down over time and typically have three- to four-year terms. A new Web TV provider likely would need to commit to three to four years of content payments as though it's already operating a business with millions of subscribers.

But what does that mean for the tech competitors attempting to break through with Web TV?

The contenders
In Apple's case, making a significant investment to upend a product category comes straight from its playbook. The New York Times Magazine's recent recounting of the iPhone birth pegged Apple's investment in its development at $150 million. Apple is also the world's most valuable company, with a market capitalization of more than $500 million, and it had $14.3 billion in cash on its balance sheet and $9.9 billion in cash flow in the last quarter. Unlike Intel, Apple has a background prodding media companies to break their molds, selling electronic music, TV and movies through iTunes.

(Credit: Apple)

In Google's case, the company has never shied away from pursuing outlandish innovations while it enjoys a reliable, lucrative stream of revenue from its search ads. The cash on its balance sheet rivals Apple's -- $15.2 billion -- and like Apple, both companies have a head start getting onto televisions. Apple TV and Chromecast, though not technological home runs, have proven popular: Apple virtually splits the market for set-top boxes with Roku, and Chromecast was on back order for weeks at launch in July and for weeks was the top-selling electronics item in Amazon's massive online store.

In the case of Sony, it means pushing the bounds of its PlayStation gaming console, but the company was the first to make early headway on content. Sony is the only contender reported to have have a tentative deal with a media company, Viacom, which owns Comedy Central, MTV and other channels. (Sony's gaming rival Microsoft's Xbox at one time expressed interest in morphing its console to include a full Internet-based TV service, but the company instead opted to join forces with other television providers for its Xbox One, integrating cable services instead of replicating them.)

The technology companies pursuing Web TV have stayed silent on their TV ambitions publicly. Google and Apple didn't respond to messages seeking comment, and Sony said reports of its own Internet-based TV project are based on speculation.

For Internet-based TV to be a competitive option, it either needs to be cheaper than cable and satellite or it needs to provide the content that subscribers want in a better way. Intel knew early on that it couldn't win on price. Huggers said in February that Intel's service wouldn't cut a user's television bill in half. For the companies still working on Web TV, it would mean charging less than traditional competitors for a service while paying more than traditional competitors to offer it.

In addition, for a Web TV offering to be truly Web TV, it would need to offer all the channels consumers want alongside the "over-the-top" video capabilities like Netflix and Hulu that they associate with Internet viewing. But traditional pay-TV providers in the US have been leery of coexisting with over-the-top services, even though some pay-TV providers abroad have begun limited partnerships with Netflix.

ABC, CBS, NBC, Fox, Showtime, HBO, AMC and ESPN either declined to comment or didn't respond to messages from CNET for this story. Comcast, Time Warner Cable, DirecTV and Dish -- the largest of the country's cable and satellite TV operators -- wouldn't comment for this story. (CBS is the parent company of CNET.)

The barriers go higher
The irony of the world's top tech companies jockeying to launch virtual pay-TV services is that the traditional providers have only become more entrenched with time.

The idea of an online player taking over has affirmed cable and satellite companies' positions in the landscape and made all players realize what they could lose by rocking the boat, said Brannon. The prospect of new tech competitors reiterated how important the traditional distributors are -- with their massive subscriber bases -- to media companies, who need as many people watching their programming as possible -- all while measuring how many of them there are -- in order to raise ad rates, he said.

It also spurred cable and satellite to ramp up their own innovation -- but in a controlled way that fits in the existing business model. DirecTV last month said it would start streaming more than 30 channels live for viewing on devices outside the home, and Comcast in October said it was allowing 35. Time Warner Cable is nearing the end of a process ensuring that its local programming is encoded so it can be delivered via apps.

In other words, tech companies put up defenses on the front where technology companies had their biggest advantage.

Conviction at the top
One of the biggest advantages Intel's competitors have in the race for Internet-based TV is that they're not led by Brian Krzanich.

Intel's former chief operating officer succeeded Paul Otellini as CEO in May. Despite some investor hopes that Intel would seek fresh blood, the appointment of Krzanich -- a two-decade company vet in the office Intel typically uses to groom CEOs -- came as no surprise. He also wasn't expected to steer Intel's strategy in a different direction.

That is how his tenure has largely played out, with OnCue a victim of apathy.

Intel CEO Brian Krzanich

(Credit: Intel)

Since Krzanich took charge, Intel's TV project has dropped off the radar, except for reports of Intel attempting to sell it off. Where Otellini saw Web television as the chance for Intel to take the lead in a big consumer business rife with dissatisfaction, Krzanich has focused on reviving PC and mobile business, reportedly concluding the TV project was a costly distraction.

Intel said its policy is to decline comment on rumor and speculation and said that it is continuing to trial OnCue internally.

But Apple, for one, has been clear in the past that it is keen to be the centerpiece of the living room. Former CEO Steve Jobs and his successor, Tim Cook, have stated their passions for producing a revolutionary device to supplant the typical TV.

It's easy to see why. People are still watching their TVs for most of their video, but they're increasing their viewing on connected devices. The average U.S. consumer packs in nearly 60 hours of media content each week, and more than half of that -- 35.1 hours -- is traditional television, according to Nielsen's latest cross platform report. However, the amount of time spent watching traditional TV has shrunk from a year earlier, supplanted by more time spent watching video on the Internet, game consoles, and mobile phones.

There's certainly an opening for a new entrant. Cable TV providers rank dead last in customer satisfaction. (Satellite providers tend to score better than cable.) Consumers are fed up with paying sky-high monthly bills that keep rising for a product that has been a technological slowpoke while devices like smartphones have made huge leaps forward.

That new entrant, however, won't be Intel. The deflation of its TV project offers lessons to those still vying to create a true Web TV service, even if their combined efforts have rallied the established players to defend themselves better. To bring Internet-based TV to consumers, companies like Apple, Google, and Sony may need to get over their tendency, as one media and advertising executive described it, to feel like they have answers to everything. To make Web TV a reality, they'll need to face reality first.