Smart TVs Lure Intel Into CE

Although 3D TVs received the most publicity at CES this past month, the emergence of the “smart” or Internet-connected TV is more significant. TV-maker Vizio exemplifies the trend. The company displayed TVs running widgets to connect to Facebook, Yahoo Widgets, Netflix, and YouTube. Most of these applications previously had been in the domain of PCs.

The emergence of PC-like applications in TVs has set up a clash between long-time suppliers of consumer-electronics (CE) chips and Intel, paralleling the battle for smartphone technology. Intel asserts that as CE systems connect to the Internet and gain the smarts to run a variety of software that it has an advantage because of the performance of its CPU technology and the surrounding infrastructure.

Suppliers of CE chips counter that the market requires integrated chips that combine CPUs with traditional CE functions such as video processing and analog conversion plus new functions for home-networking connectivity such as Wi-Fi and new technologies such as 60GHz radios. CPU designs from companies such as MIPS and ARM deliver sufficient computing performance and better power dissipation than Intel’s CPUs. Moreover, the software most important to the PC—Windows and Office—is irrelevant.

Arguments from both camps have validity but on balance Intel is the one that must play catch-up. Integration and cost-effectiveness are clearly important product attributes. Intel has developed a few CE-specific chips, including the Atom-based CE4100, but the company has had little uptake. Competitors such as Broadcom and STMicroelectronics have wider product lines and chips that integrate functions such as demodulators for cable, satellite, or broadcast TV and digital-analog converters.

Meanwhile, smartphones have shown that software developers are excited to target systems based on processors other than x86. Crucially, Adobe is enabling Flash to run on various architectures, further opening the door for hardware-neutral software. JavaScript—used by Yahoo Widgets—and Android also facilitate cross-platform software development.

While the battle heats up among chip suppliers, another group of technology companies stands to benefit from the trend toward smart, connected TVs: semiconductor IP suppliers. Beyond demand for ever-faster CPUs, companies need 3D-graphics processors for glitzy user interfaces, better audio processors, multi-standard video encoders and decoders, and I/O controllers ranging from SATA to Wi-Fi. Ultimately it is the consumer that wins as the TV morphs from Idiot Box to something a bit smarter. --Joe

Joseph Byrne, senior analyst