Intel broadens digital home reach

Intel has agreed to acquire Israeli developer Oplus Technologies in an effort to expand the chipmaker's reach into the digital home.

The acquisition would give Intel video-processing technology for digital displays on high-definition televisions. Those displays include flat-panel plasma screens, liquid crystal displays and rear-projection TVs.

Intel's microprocessors and chipsets worked best today at processing data, not video, Intel spokesman Bill Calder said.

"[The acquisition] is a deliberate effort by Intel to deliver the basic building blocks to a wide variety of new devices coming into the market from the consumer electronics industry," Calder said.

Intel's technology is found in digital set-top boxes from Thomson and Samsung. The chipmaker also powers many media centre PCs running Microsoft's Windows XP Media Center Edition operating system.

Intel believed the PC was the best option as the entertainment hub in the digital home of the future.

Such a home would have a computer server capable of distributing movies, music, pictures and TV programming to any device.

Some analysts have criticised the Media Center PC as too complex for most consumers. Success will depend on its simplification, some believe.

The Oplus acquisition would takes Intel into more areas of the digital home, particularly digital displays.

Intel had tried to enter this market with its own technology for rear-projection TVs called liquid crystal on silicon.

Justine O'Connor, analyst at US firm Current Analysis, said Intel's LCOS chip required equipment manufacturers to redesign their circuitry.

"It was pretty much a flop," she said.

With Oplus, Intel would get technology that worked on a wider variety of digital displays and wouldn't require major design changes by consumer electronics manufacturers.

"[The acquisition] is an attempt to broaden Intel's OEM base by making its technology more attractive," O'Connor said. "Intel is clearly trying to open its opportunities."

Oplus's technology solved the problem of picture degradation as digital displays got bigger and cheaper, Calder said.

"Screens are getting larger and the need to enhance the image and maintain quality has become critical," Calder said.

Financial details of the Oplus acquisition were not released. Oplus, a privately held company in Israel, designs and develops integrated circuits and software for video processing.