Intel Ditching Smart TV Business

It appears that Intel will be turning its back on the once-praised Google TV package.

ZoomOne the eve of the announcement of an Android Market version of Google TV, market research firm IHS released some numbers that show that Intel may not be as committed to the smart TV market anymore as it announced back in 2010.

Wrapped up in a group of new entries in the TV chip supplier segment, Intel had less than 2 percent market share in the first half of 2011. According to IHS, Intel has begun shifting its resources away from the TV market and is now focusing on mobile devices such as tablets and smartphones. The TV SoC market is dominated by Mstar with a 39 percent share and Mediatek with 12 percent.

One of the problems Intel and other new suppliers may be facing is that the term smart TV isn't defined yet and that, despite a TV market volume of hundreds of millions of units each year, there are long replacement cycles and the smart TV just has not caught on yet. IHS said that it will take several more years until the smart TV will hit substantial volumes - and account for 65 percent market share by 2015.

“In a television semiconductor market characterized by entrenched suppliers and weak near-term growth prospects, Intel was facing enormous challenges in trying to establish itself as a competitor,” said Randy Lawson, principal analyst for display and consumer electronics at IHS. “And with the first-generation Google TV products proving unsatisfactory given their slow sales, it’s no surprise that Intel is moving away from the television SoC market.” There was no information how Intel will react to the Google TV upgrade.

However, it is already clear that it will take much more than a sophisticated chip to break into the TV market as even Broadcom hinted that it would be leaving the TV chip because of the rough competitive environment.