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Intel Sells Cloud TV Platform to Verizon

21 January 2014

Intel Corp. has announced it is selling the assets of the Intel Media business division, including its OnCue cloud TV platform, to Verizon Communications Inc. for an undisclosed sum. The transaction is expected to close early in the first quarter of 2014.

The sale of will accelerate the availability of next-generation video services, both integrated with Verizon's fiber-optic networks and delivered "over the top" to any device, Intel said. Verizon will also make employment offers to substantially all the approximately 350-person Intel Media business unit, which will continue to be based in Santa Clara and be led by its current management team.

Verizon said it plans to integrate IP-based TV services with its FiOS fiber optic video service to further differentiate FiOS from traditional cable TV offerings and to reduce ongoing deployment costs. FiOS customers will gain search, discovery, interactivity and cross-screen facilities that will be integrated with the Verizon Wireless 4G LTE network, Verizon said.

"This transaction provides us with the capabilities to build a powerful, capitally efficient engine for future growth and innovation," said Lowell McAdam, chairman and CEO of Verizon, in statement. "We will have the opportunity to enhance, expand, accelerate and integrate our delivery of video products and services to better serve audiences on a wide array of devices."

Brian Krzanich, Intel CEO, said that the technology has the potential to change the way people "interact with content" but that the key to success was access to content and the ability to scale a subscriber base rapidly. "Which is why selling these assets to Verizon makes perfect sense, with its millions of FiOS network and wireless customers. This sale also enables Intel to further align our focus and resources around advancing our broad computing product portfolio in segments ranging from the Internet-of-Things to data centers," Krzanich said.

Erik Huggers, corporate vice president and general manager of Intel Media, said: "Intel provided us with the technological know-how and resources to develop products and services that will fundamentally change the way we experience TV, and now Verizon gives us access to the marketplace and the ability to scale."

Put another way, the sale can be seen as part of the renewed pragmatism previously promised by Intel CEO Brian Krzanich. Under previous CEO Paul Otellini Intel spent prodigiously – and some would say wastefully – on service initiatives that were some distance from Intel's core processor business, from TV-on-PC to complete embedded systems in energy generation to healthcare-at-home. But many of those initiatives were started when Intel was growing with the PC industry and enjoying expanding margins.

In the last couple of years the PC and the PC processor business have gone into reverse and Intel can less afford to tinker in service sectors with which it is not familiar. Intel president Renee James has spoken of reining in the chaos (see Intel CEO pledges renewed innovation, pragmatism)

In December, Verizon announced a definitive agreement to acquire EdgeCast, an industry leader in content delivery networks. Also in fourth-quarter 2013, Verizon announced the acquisition of upLynk's exclusive technology that streamlines the process of uploading and encoding of video for live, linear and video-on-demand content.

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