Intel Viiv remains work in progress

Intel's Viiv entertainment platform is lacking in features and content to gain traction with consumers, according to several industry analysts.

Richard Shim, a Senior research analyst with IDC described the system as an "incomplete effort."

"It's too early to call it a failure, but it's still a work in progress," Shim said.

"Initially there was a lot of hype about the common experience. The reality is that there is still potential here, but it will take a while until we see something."

"Intel needs to be a little more realistic about the time line for the success of Viiv."

Intel launched the Viiv platform last January at the Consumer Electronics Conference (CES) in Las Vegas. It essentially bundles a dual core processor with free access to a set of premium online video services. Intel intends for consumers to put the devices in their living rooms and connect them to a high definition television.

Merlin Kister, director of consumer client marketing with Intel, said that the company is "pretty pleased" with Viiv sales. Citing a mandatory quite period prior to Intel's upcoming quarterly revenue release, he was unable to give any recent sales figures for the systems.

He argued that it takes time to build awareness of the Viiv brand with consumers.

"It's a challenge to make it clear to your audience what you stand for. Hopefully, people understand that Viiv is a PC that has been optimized for digital entertainment," Kister told vnunuet.com.

Gartner research vice president Steve Kleynhans however charges that consumer don't understand what benefits Viiv offers.

"It's not clear that most users would see [the current video services] as a huge benefit. They are nice to have, but not enough to drive sales," Kleynhans told vnunet.com.

He argued that Viiv PCs currently fail to properly differentiate themselves from a regular PC running Microsoft's Windows XP Media Center Edition. This premium version of Microsoft's operating system allows users to record video on a system's hard drive, but lacks access to the online video services that Viiv offers.

Kleynhans added that Intel has done a poor job at marketing Viiv, causing a lack of consumer awareness.

Rob Enderle, principal analyst with the Enderle Group, blamed Viiv's failure on Intel's former marketing chief Eric Kim.

Kim is a former executive from Samsung and last year was hired by Intel.
In a corporate restructuring last July, Kim was appointed general manager of the Digital Home Group which includes Intel Viiv.

"He screwed up Viiv so badly that he got a chance to fix it," Enderle summarized Kim's new role in the platform.

IDC's Shim added that Kim's experience with consumer electronics might help him in pulling Viiv afloat, but cautioned that there is no guarantee for success.

"Just because you have experience in consumer electronics, that doesn't mean that you'll be an expert in consumer behavior in the downloading of new media," Shim said.

He recommended that Intel should focus more on delivering compelling content through the platform. The rise of the Youtube online video site for instance has proven that there is a demand for online video.

"Youtube demonstrates that consumers are aware of streaming video. If you see what iTunes did for online music, you have to wonder if there can be something similar for digital video. It doesn't seem to be that way with Viiv today."

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