Watch Intel as it Enters the Smart TV Age

Posted:01/07/13
By:Chris Lau

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Watch Intel as it Enters the Smart TV Age

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Intel (INTC) is reportedly launching smart TVs in 2013. A Taipei reporter for Digitimes reported that Intel will partner with Hewlett-Packard (HPQ), Lenovo, Quanta Computer and Compal Electronics to make a Smart TV that could include face-recognition technology, gesturing, and voice.

The platform would run on Intel Atom processors.

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The Smart TV platform is crowded. Marvell (MRVL), ARM Holdings (ARMH), and Qualcomm (QCOM) are some of the chip makers in this space. ARM is well-positioned in this space, a view supported by investors. ARM shares are valued at 9.3x book and 71.1x earnings. In contrast, Intel trades at a price to book ratio of 2x and a P/E of just 8.4x.

In the entertainment space, Intel’s rumored entry to internet-based TV service is not new. It was reported as early as March 2012 that Intel wants to work with networks for bringing content. If the rumors are true, Intel would launch a subscription service as a trial, by testing it in selected cities. The service would have web video along with regular channels.

Google is the competition for Intel. Google TV chose ARM processors over Intel earlier this year. Google’s offering is currently available, but is also limited. Service is tied to Google Fibre. The fibre service is currently available in Kansas City for $70 per month.

Analysis on Intel

Intel shares are trading at around $20, 29.6% below a 52-week high. In the last 10 years, the company returned 4.5% annualized. In that time, dividends increased around 25% each year, outpacing its growth in earnings per share. The low valuation makes Intel a stock to watch for value investors. On the overall picture, investors need to watch PC sales growth compared to tablet and smartphone growth. While waiting, investors will be paid 4.5% in dividends annually.

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Want to trade the trend? Players in the Smart TV space are listed below. Use the information and links as a launching pad for your own analysis.

This chart is interactive:

1. Intel Corporation (INTC, Earnings, Analysts, Financials): Engages in the design, manufacture, and sale of integrated circuits for computing and communications industries worldwide. Market cap at $104.65B.

Other players in the Smart TV space include:

2. Marvell Technology Group Ltd. (MRVL, Earnings, Analysts, Financials): Designs, develops, and markets analog, mixed-signal, digital signal processing, and embedded and standalone ARM-based microprocessor integrated circuits. Market cap at $4.52B.

3. QUALCOMM Incorporated (QCOM, Earnings, Analysts, Financials): Engages in the development, design, manufacture, and marketing of digital wireless telecommunications products and services. Market cap at $107.12B.

4. ARM Holdings plc (ARMH, Earnings, Analysts, Financials): ARM Holdings plc and its subsidiaries design microprocessors, physical IP, and related technology and software, as well as sells development tools to enhance the performance of high-volume embedded applications. Market cap at $17.63B.

5. Google Inc. (GOOG, Earnings, Analysts, Financials): Google is the world's most popular search engine. Market cap at $237.36B.

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