As expected, Intel announced on Tuesday that the company has agreed to sell all assets of its Intel Media division, which is dedicated to developing Cloud TV products and services to Verizon Communications. The deal is expected to close early in the first quarter of 2014.
Terms of the transaction were not disclosed.
Back in November, unnamed sources said the chip giant recently dialed back its streaming TV ambitions despite opening several dedicated offices nationwide, and was looking to secure a sale by the end of December. Names mentioned in the possible OnCue sale included Verizon, Samsung Electronics Liberty Global Ltd. and Amazon.
According to the new agreement, Verizon Communications will make employment offers to "substantially" all of the approximately 350-person Intel Media unit. The company will also purchase the intellectual property (IP) rights and other assets that enabled Intel's former OnCue Cloud TV platform. The Verizon-owned unit will continue to reside in Santa Clara and be led by its current management team.
Upon closing of the deal, Verizon will integrate the IP-based TV service with its FiOS video to put a wider distance from it and competing cable subscription services, and to reduce ongoing development costs. Verizon also indicated that FiOS subscribers will "benefit from elegant search and discovery, interactivity and cross-screen ease of use – integrated with the Verizon Wireless 4G LTE network."
So why is Intel selling its Media division to Verizon? "This sale ... 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," said Brian Krzanich, CEO of Intel Corporation.
Intel's CEO also said something rather interesting, pointing to previous rumors that Intel was having a hard time landing deals with content providers.
"The critical factor in gaining efficient access to content is based on your ability to scale quickly in subscribers and end users, which is why selling these assets to Verizon makes perfect sense, with its millions of FiOS network and wireless customers," he said.
Talk of Intel dipping its toes into streaming TV sparked up more than a year ago, a cable-killer that would provide better choices than what Time Warner Cable and other current competitors provide. At one point the company was testing Intel-built set-top boxes in more than 3,000 homes. Intel's previous CEO Brian Krzanich said the company was taking it slowly due to its inexperience in the content delivery industry.
However, by September, there was talk that Intel was looking for a buyer. At the time, Intel had still yet to lock down a single major content provider.