Posts tagged ‘Intel’

Widgets And Idjits

Intel (INTC) and Yahoo (YHOO) recently announced a venture to develop a platform–dubbed “The Widget Channel”–that in effect turns your TV into an Internet thin client. Seth Gilbert over at Metue.com has a great summary.

Developers can write software widgets that can be uploaded to your TV and run in the background. You could check email, share photos with friends, bid on eBay, anything a widget on your Mac or PC can do. All while watching your favorite TV show or sports event.

Of course, you’ll also have to buy a new TV or Set-Top Box (STB) that is equipped with Intel’s CE3100 Media Processor. Good luck with that.

[I wonder sometimes whether anyone ever sees the obvious disconnect between relatively fast new media business development cycles–i.e. “Internet time”–and the much slower frequency with which people upgrade expensive items like TV sets. Many, many firms are vying to deliver a “convergence” solution. Which, if any, will be sufficiently compelling and have enough staying power to become embedded within a sizable share of TVs or STBs?]

Overall, I’m a bit skeptical of this and other similar initiatives.

What I do like is that it’s expected to be a relatively open standard (from the software point of view, at least–you still need Intel processors). Tapping the creativity of the wider software development community is a proven method for both good product and built-in viral marketing. iPhone apps, Google Maps mashups, and Firefox extensions are just a few examples. However, this alone won’t guarantee consumer adoption of the platform, just ensure functionality is available.

At the end of the day, do consumers even want this? Here’s what I think is true:

  1. People like to use the Internet for a growing variety of things, including watching video.
  2. People enjoy watching TV, preferably on a TV set. (I’d hazard a guess that most people watch TV with someone else in the room, but typically watch video on the PC alone.)
  3. Many do some form of Internet activity (surf, email, etc.) while they watch TV.
  4. Past attempts at interactive TV–at 15 years and counting–have been underwhelming, and that’s being charitable.

What isn’t at all clear, is whether those surfing are paying any attention to the program while doing so. What also isn’t clear is what the other people in the room are doing. Most likely, they’re actually watching the program.

So what happens when the surfer starts fiddling around with widgets, essentially “doing Internet stuff” while others are watching the show on the same screen. Even if the video portion of the screen is undisturbed, wouldn’t that be a bit distracting? Why does everyone seem to assume the surfer wants or needs to use the TV screen anyway? Aren’t they using a computer already?

Sometimes it seems like much of the Internet/TV/PC convergence is a supplier-driven attempt to create a market where there isn’t one. Perhaps it’s simply another self-reinforcing delusion, where media and equipment companies living in an echo chamber of trade shows, developer conferences, and press events convince themselves a market exists where it doesn’t. The 21st century’s equivalent of the videophone–a technology so compelling that consumers must want it. Except they didn’t.

I’ve seen this kind of thing countless times, especially in large, bureaucratic companies like Intel.

Someone somewhere (fairly high up in the management ranks, to be sure) has a brainchild for a new, compelling offering. A sure-fire way to help the company grow and break into new markets. So it’s funded, momentum builds, staff are assigned, and hilarity ensues.

Soon, lower level employees–who actually do the market research and understand what’s going on–figure out the idea is D.O.A. But nobody wants to tell the top brass they’re wrong, or especially that they’re “idjits” (idiots), in a shoot-the-messenger world. Particularly when their whole department was formed around the initiative. Job security will out, you know.

As the old joke goes, as you go up the management chain, crap becomes manure, then turns into fertilizer, which is recast as a way to grow the company. That’s when the flowery press releases begin. Companies rarely issue a release about how the initiative is abandoned some months later when the market fails to materialize.

Is The Widget Channel crap, or dynamic growth? It’s probably too early to tell. I suspect it’s got a decent chance to beat the competition, whatever that means. However, what’s more important is whether there is even a market to win.

Disclosure: I hold no position in any of the stocks mentioned here.

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August 22, 2008 at 11:46 am Leave a comment

Alias Mr. Moneybags

Who benefits the most from the recently announced Sprint/Clearwire deal? It may not be who you think.

This massive ($3.2B) infusion of money seems like a lot, but it’s just the beginning for this boondoggle. WiMax is a nice technology that works in some circumstances, with the right business model. But then so will WiFi, and it’s much cheaper. Besides, the mobile providers have a huge head start. Why buy new cards and sign a new contract when I already have what I need from my cell phone (or hotspot) provider?

In terms of becoming a successful business, WiMax is vying for the “most hyped” award with social networks. Expect more bags of money to be tossed into the trough before long.

So who gets what?

Sprint (S) – Removes one monkey from the back of CEO Dan Hesse as he is now free to focus on why Sprint has been shedding customers for so long. Also distracts everyone from noticing the delays in its own WiMax buildout.

Intel (INTC) – Intel has been peddling WiMax like a desperate streetwalker to anyone with an open car window. And its been seen hanging around the Clearwire convertible before. Intel wants to be the undisputed standard for WiMax chips, a role it failed to capture in WiFi. Not to mention selling lots of new processors for next generation laptops and smart phones.

Google (GOOG) – Yes, critical mass for Android will help extend its search and advertising dominance into mobile. And this network might turn out to be actually open. Despite Google’s game playing at the FCC auction, the “open” spectrum Verizon won will–in practice–be anything but. Fundamentally, Google has become a VC firm. A billion here, a billion there, something just might stick. All it takes is one 10-bagger to make it work. This ain’t it.

Time Warner Cable (TWC), Comcast (CMCSA) – the Rosencrantz and Guildenstern of mobile will be exactly as successful here as they were with Pilot, the failed MVNO venture with Sprint. And for the same reasons.

Clearwire (CLWR) – Now we’re getting somewhere. Big cash infusion, lots of media attention. The rights to resell Sprint 3G will allow it to grow its top line, giving it time to progress on the buildout. In the end, though, even with a working network it won’t be enough to either satisfy consumers or to make it a viable competitor to the telecableco ISPs. ( And I’m not alone in my thinking, here.)

But you see, by then Craig McCaw will have made his money.

McCaw has a history of promote, build, and sell. Usually at the top. And always with someone else’s money. He’s going to extract himself from this before long, and come out smelling like a rose.

Or a crisp thousand-dollar bill.

Regardless of what happens, whether the network succeeds, whether or not anyone else makes any money, you can be sure of one thing: McCaw has this all mapped out. There’s your winner.

Disclosure: I hold no position in any of the stocks mentioned here.

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May 9, 2008 at 12:17 pm 10 comments


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