Intel focuses on digital home market

Chip giant Intel is organising two new significant business initiatives based around entertainment PCs and consumer electronics in a bid to deliver its existing silicon technology into a wide swath of new devices.

Intel President Paul Otellini, in a speech at the International Consumer Electronics Show in Las Vegas, set out his company's new vision of digital homes and networked media outside the PC.

Otellini drew gasps during his address when he told the audience that an Intel initiative to bring its chip technology into LCD-TVs would, by next year, lower costs of the 50-inch devices by as much as two-thirds.

'Intel [will] move silicon from inside the computer to outside the computer, but into a number of other devices,' Otellini said. The digital home, he said, has evolved from an 'image of the Jetsons to where we think the home should be. It's no longer about gadgets. It's about things we do in the home.'

To attack this new strategy, Otellini said the company has formed a new Consumer Electronics Group, which will focus on migrating Intel processor technology into non-PC, electronics solutions.

During Otellini's speech, Intel for the first time demonstrated its Azalia audio technology; an integrated wireless access point as part of its forthcoming Grantsdale chips; and its forthcoming Prescott processor in a consumer-electronics environment.

He also said a series of electronics manufacturers had all agreed to produce 'portable media players' based on Intel's X-Scale processor.
Going forward, Intel will refer to Azalia as 'high-definition audio,' said Louis Burns, general manager of Intel's Desktop Platforms Group, who joined Otellini to demonstrate some of the new technologies.

An overriding goal, Otellini said, will be to move technology from 2-foot, PC-based interfaces to 10-foot, TV and entertainment centre interfaces with remote-control capability.

In addition, Otellini said Intel would roll out a new Liquid Crystal On Silicon (LCOS) display processing technology--marking the chip maker's entry into the fast-growing LCD and LCD-TV space. 'What LCOS does is it will have filmlike HDTV experiences at very affordable prices,' Otellini said. 'What LCOS does better than other technologies is it takes advantage of Moore's Law,' citing the potential for significant improvements in LCD resolution over time, based on improvements in chip performance. 'We think that in 2005, you'll be able to buy a 50 inch LCD-TV ... based upon our LCOS technology for less than $1,800. This will change big-screen TV economics.'

The other end of equation, Otellini said, remains the providers of digital content. During his address, he introduced Academy Award winner Morgan Freeman, who is also co-founder of motion picture company Revelations Entertainment. Freeman said his company is impressed by Intel's efforts to work with Hollywood toward secure transfer of digital entertainment across the Internet.

He is so impressed, he said, that Revelations has decided its next film, which should be released in 2005, would premiere simultaneously in theatres and via the Internet.

He said film makers could learn from tactics used by the music industry, 'which has been suing 12-year olds.'

Otellini noted estimates of 350 million digital devices sold into homes in 2004. 'This is a huge market,' he said. 'In many ways, it's a bigger market than the PC itself.'