As an increasing number of devices become connected to the Internet, Intel Corp. is looking to new markets, such as home entertainment, for major growth opportunities, the company´s chief financial officer said this week during the Reuters Media and Technology Summit in New York.
These lucrative markets require, in many cases, more expensive processors for servers that stream video and other content, compared with chips that power smartphones and other devices, Intel CFO Stacy Smith said.
“It’s probably true in the digital TV space because if you think about it, the content that is going to be served to these devices is extraordinary,” Reuters quoted him as saying on Wednesday.
“It’s increasingly high-def digital content, so it’s got to be driving a pretty significant buildout of the storage infrastructure and server infrastructure that supports all those devices.”
The opportunity extends beyond home entertainment, with digital signs, tablet devices and cars among the other areas increasingly connected to the Internet, Smith said.
All of these will help drive demand for more Intel chips, he said.
Smith’s remarks follow news that Intel plans to launch a scaled down TV service, which includes a set-top box with technology that can distinguish who is watching, potentially allowing Intel to target advertising, Reuters reported.
Smith did not discuss Intel’s specific plans for the service during Wednesday´s technology summit.
Intel already makes processors for set-top boxes, with cable operator Comcast having recently announced a gradual rollout plan of an Intel-based set-top box that customers can control with their smartphones.
Dubbed the “X1,” the platform uses data centers with multiple high-end servers that typically also employ Intel chips.
Intel’s processors now power about 80 percent of the world’s PCs, although growth in that market has been slowing as more consumers adopt tablet devices.
The ongoing European financial crisis has undermined investor and consumer confidence in the Eurozone, forcing major technology firms, such as Cisco and others, to scale back expectations for IT spending.
But Intel Chief Executive Paul Otellini downplayed those concerns last month, saying the quarter was coming along as the chipmaker expected.
Smith pointed to China and other emerging markets where PC sales are growing faster than in developed markets, and noted that a weak Europe is a “baseline” assumption for Intel.