Intel Capital Defies Recession; Most Active Corporate VC In Silicon Valley

July 30, 2009
Intels investment managed to survive thanks to its financial returns

Intel's strategic investing arm managed to survive thanks to its financial returns

Started in 1991, Intel Capital is by far the longest surviving “corporate” venture capital organisation and the most active in Silicon Valley.

“We have the classic objective of balancing strategic needs for the company as well as financial returns. We existed this long because we have generated quite positive financial returns for the company… We invest off the balance sheet, we don’t have a fund type structure. But in any given year we invest hundreds of millions of dollars,” explains Intel Capital’s cleantech leader Steve Eichenlaub, speaking at the Intel Technology Summit yesterday in San Francisco.

Intel Capital is “round” agnostic – although prefers investing in B and C rounds – and its 100 or so investment professionals will usually poor around $300 million to $400 million a year, in all stages (seed to publicly traded) of a company’s evolution, worldwide.

Think of Intel Capital as a large venture capital organisation inside of a large publicly traded corporation. “In some ways we kind of do an entire venture capital fund every year!,” added Eichenlaub.

Intel Capital invests in 7 technology markets

Intel Capital invests in these 7 technology markets, cleantech being the newest one

One of the “value-add” that Intel Capital brings to its portfolio companies is its vast network of relationships with large customers, through Tech Days, a one-day event hosted 60 to 70 times a year at a partner location, like Microsoft, BT, Huawei, BMW,Comcast…

Here’s a video excerpt of Eichenlaub’s overview of Intel Capital:

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Posted by TechPulse 360

Tables Turning In Telecom With Video Trumping Voice

March 20, 2009

It used to be telecommunications carriers made a living connecting phone calls.

But this year could be the first where the new video services offered by AT&T and Verizon grow faster than the telephone services cable companies are selling to their customers.

This year could be the first where new video customers at top telcos exceed new cable voice customers

This year could be the first where new video customers at top telcos exceed new cable voice customers

This analysis comes from the Wall Street firm of Stifel Nicholaus.

Up to now, the cables have made inroads into the teleco’s home turf, stealing voice customers faster than AT&T and Verizon could attract customers to their new fiber-optic networks, over which they deliver high-speed Internet connections and TV programming.

In 2008, for instance, two Baby Bells added 1.8 million video customers while the top four cable companies, such as Comcast, signed up nearly 4.8 million voice subscribers.

But the video programming has been popular with consumers, and both telecommunications carriers have received high marks for customer service.
In addition, voice signups at the cable companies have slowed, with new subscribers falling from 1.2 million in the third quarter of 2008 to 870,000 in the fourth quarter, says Stifel Nicolaus.

“We view telcos as the likely market-share winners over the course of the next couple of years, as cable’s core video product will continue to be stripped away by competitive telco offerings,” the firm said.

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Posted by Mark Boslet

Clearwire Plans Ambitious Six City WiMAX Rollout In 2009

March 5, 2009

Despite financial woes, Clearwire plans to expand its wireless broadband network into six new cities in the U.S. this year on the way to reaching 120 million consumers by the end of 2010.

The company said Thursday it raised $3.2 billion of new financing to fund the expansion from companies including Google, Intel, Comcast and Time Warner Cable.

Company raises $3.2 billion from Intel, Google, Comcast and others

Company raises $3.2 billion from Intel, Google, Comcast and others

The wireless operator is in a race against cellular carriers who plan to use LTE technology to build advanced 4G networks to increase the speed and capacity of their wireless data services.

As it released fourth-quarter results, Clearwire said it will expand WiMAX into Las Vegas, Atlanta, Chicago, Philadelphia, Dallas and Fort Worth this year. Las Vegas and Atlanta will be ready by the summer.

It also expects to convert existing networks in Seattle, Honolulu and Charlotte, covering a total of 75 million people.

In 2010, the company will push into New York, Boston, Houston and the San Francisco Bay Area – expanding its coverage area to 120 million people in 80 markets.

WiMAX has received a lot of negative press, said Philip Solis, principal analyst at ABI Research. However, “Clearwire has capital and a nice amount of spectrum and will be moving forward at a decent pace over the next few years. Combine this with ever-cheaper WiMAX chipsets and newer ultra-mobile devices hitting the market, and you have a great potential for success.”

However, finances remain a challenge. The company recently said it needed to raise $2 billion during the next couple years, which its new financing will provide. But on Thursday it reported this year’s network expansion will cost $1.5 billion to $1.9 billion this year, a big chunk of the money.

It also posted a net loss of $118 million in the fourth quarter.

An estimated 100 million devices, including laptops, handhelds, modems and netbooks, are expected to be out-fitted for WiMAX by the end of the year.

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Posted by Mark Boslet

Comcast Unleashes 50Mbps Broadband In Silicon Valley

March 5, 2009

Comcast said it is rolling out new higher speed Internet connections starting in the Silicon Valley-San Francisco area and nearby Monterey County.

Cable giants faster broadband battles fiber optics from Verizon and AT&T

Cable giant's faster broadband battles fiber optics from Verizon and AT&T

The two new tiers of service will increase downstream speeds to 50 megabits a second – an effort by the cable giant to compete against the fiber-optic service Verizon and AT&T are delivering to regions of the country.

Comcast said its Extreme 50 will offer up to 50 Mbps of downstream speed and up to 10 Mbps of upstream speed at $139.95/month. The Ultra service will provide up to 22 Mbps of downstream speed and up to 5 Mbps of upstream speed for $62.95/month.

The company claims with Extreme 50,  customer will be able to download a standard-definition movie in five minutes.

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Posted by Mark Boslet

IPTV Customers Found Satisfied With Their Service

February 19, 2009

U.S. consumers getting television over the Internet from Verizon and AT&T report being very satisfied with their service, according to a study conducted by Strategy Analytics.

More Than 80%Of FiOs and U-Verse customers report being very or extremely satisfied

More Than 80%Of FiOs and U-Verse customers report being very or extremely satisfied

The survey, completed in late 2008, highlights the competition developing in the American television delivery market as cable companies face challenges to their long-held monopolies. Both Verizon and AT&T have extended fiber-optic networks into local neighborhoods and provided high-speed broadband connections along with scores of digital television channels.

Strategy Analytics said it contacted 845 digital television subscribers, including some who received service from cable companies Comcast, Cox and Time Warner Cable and others who were customers of DirecTV and Dish.

More than 80 percent of subscribers to Verizon’s FiOS and AT&T’s U-Verse said they were extremely or very satisfied with their provider.

Digital television appears to be the greatest lure of the “triple play” offerings telecos developed to bundle TV, phone service and Internet connections, Strategy Analytics said.

Cable subscribers were the least happy with their service, with Time Warner customers most likely to switch.

Today’s television market place is becoming more complicated as consumers increasingly look to the Internet for content and avoid paying a cable or telecom provider.

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Posted by Mark Boslet

Comcast: Microsoft Sells Shares While The FCC Investigates Net Neutrality Case

January 20, 2009

Comcast may be illegally favoring its own Internet phone service over rival services that use its cable lines, the Federal Communications Commission said in a letter sent to the company two days ago.

FCC Looks at Comcasts treatment of VoIP services

FCC Looks at Comcast's treatment of VoIP services

The letter states that in a September report to the FCC, Comcast explained that if a consumer using a majority of his or her bandwidth for various purposes made a VoIP call, that “VoIP call sounds choppy.”

However, Comcast’s Web site suggests the company’s own VoIP service would not suffer this same degradation, the FCC points out.

In its letter, it asked for an explanation of the discrepancy.  Under federal regulations, Comcast’s Internet phone service – if it uses separate transmission facilities – might be subject to regulation as a phone service.

If not, the company would likely have to offer a similar quality of service to rivals. A complaint triggering the FCC’s investigation was filed by Free Press, a non-profit, and Public Knowledge, an organization of lawyers, lobbyists and academics.

Meanwhile, Microsoft disclosed in a Securities and Exchange Commission filing on Friday that it sold its 7.3 percent stake in the Comcast’s Class A common stock.

Microsoft purchased the shares in 1997 when it was interested in winning a position for its software in set-top boxes. The business gamble didn’t play out.

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Posted by Mark Boslet

Clearwire Could Stall Nationwide WiMAX Deployment Amid Credit Crunch

December 17, 2008
Sprint's dual 3G/4G modem works on both the carrier existing EVDO high-speed network and on Clearwire's WiMAX network

Sprint's dual 3G/4G modem works on both the carrier existing EVDO high-speed network and on Clearwire's WiMAX network

Network operator Clearwire is set to build the first nationwide 4G mobile broadband network using WiMAX wireless technology.

But it now appears that the company is $2 to $5 billion short to complete the national roll out. Despite the $3.2 billion investment Clearwire received earlier this month from Comcast, Intel, Time Warner Cable, Google and Bright House Networks.

Today, Clearwire’s network only covers the city of Baltimore, with Portland, Ore., officially launching early January. And 46 more markets are planned in the initial build-out next year.

With credit markets still in flux, Clearwire’s prospect of raising public debt are slim; leaving the carrier with little choice but to slow if not stall its network build-out. Which could represent a significant financial blow for suppliers like Motorola.

Sprint launched a WiMAX modem inspite the lack of a WiMAX network!

In a somewhat funny turn of event, Sprint – which provided Clearwire with most of the WiMAX spectrum – announced today a 3G/4G dual-mode USB modem that will connect a computer to Clearwire’s WiMAX (4G) service.

The wireless modem will cost $150 with a two-year subscriber agreement and after a $50 mail-in-rebate. The device will work on both Sprint’s existing EVDO (3G) nationwide high-speed network and on Clearwire’s Baltimore – and soon Portland – WiMAX networks. Sprint claims an average downlink speeds of 2-4 Mbps within its 4G network; about 3 times the speed of its EVDO network.

But unless you are in the Baltimore or Portland areas, I find hard to understand the benefit of this dual modem. Especially if the WiMAX roll-out takes several more years to complete than initially thought!

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Posted by TechPulse 360

Tivo Lost Nearly 1 Million Subscribers This Year; Forecasts Next Quarter Losses

November 25, 2008
Tivo’s total subscribers fell to 3.46 million, approximately the same level they had in Spring 2005

Tivo’s total subscribers fell to 3.46 million, approximately the same level they had in Spring 2005

When will Tivo finally turn around?

Today, the personal video recorder (PVR) pioneer released better than expected financial results, posting its fourth consecutive profitable quarter. Unfortunately, this will be the last one as Tivo now expects a $10 million to $12 million loss for its current fiscal fourth quarter on revenues of $47 million to $49 million.

But the Alviso, Calif., company keeps bleeding users: 163,000 subscribers last quarter; nearly 1 million since the beginning of the year!

A steep decline in spite adding services such YouTube and Netflix videos and signing distribution agreements with satellite-TV company DirecTV, cable provider Comcast and German software-maker Nero; that will all rollout/promote TiVo services.

“TiVo may have a valuable intellectual property portfolio, but its hardware selling business is over. For the most recent quarter, it sold fewer than 500 TiVo DVRs a day,” writes Bill Gorman of TV by the Numbers.

Last week, Tivo announced staff lay offs staff, taking a $1 million pretax charge for severance charges and outplacement.

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Posted by TechPulse 360

Online Video Advertising Budgets Appear To Be Holding Steady, But Market Consolidation Could Be On The Way

November 13, 2008
One or two aggregators will emerge, says Greg Douglass

One or two aggregators will emerge, says Greg Douglass

The online television and movie market appears ripe for consolidation.

In the next year, one or two big aggregators of streaming Internet content will emerge, said Greg Douglass, global managing director of media and entertainment at Accenture. “At most, there will be three or four at the end of the day.”

Examples aggregators are Comcast’s Fancast and Hulu. But these sites could see competition.

At the same time, online video advertising will increase, despite the downturn, and new forms of advertising could become successful online.

“Ad supported video will continue to grow and will be largest part of the market,” Reed Hasting, CEO of Netflix, said at the NewTeeVee conference in San Francisco. As ad prices rise, broadcasters will need to show fewer ads per episode.

Executives said that so far ad budgets for online video appear to be holding steady. Budgets are being cut for traditional television advertising, but not for digital initiatives, said Douglass.

And traffic appears to continue to grow. In the past six weeks, the online audience for streaming content at Fox Broadcasting has rocketed ahead, said Hardie Tankersley, vice president of online content and strategy.

Douglass said broadcasters might benefit by placing retail ads – such as ad for a boxed set of a program’s first season – at the bottom of the display screen. Use the current video content to drive sales, he suggested.

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Posted by Mark Boslet

Cox To Launch Cellphone Service Next Year; Here’s Why It Will Fail !

October 27, 2008

Cox Communications, announced today it will build a cellular network to offer its 6.2 million residential and commercial customers a cellphone service next year. The privately-held cable company operates in 28 major markets across the U.S., including Phoenix, New Orleans, central Florida, Rhode Island, Connecticut and Las Vegas.

Cox explained that it already spent more than $500 million in wireless spectrum licenses, infrastructure and people so that subscribers can use their mobile phones to program their DVRs (digital video recorders), watch TV programs and access content stored on their home PCs.

Can’t we already do all that with, let’s say an iPhone or a Windows-mobile phone? It’s just nuts to build a new old wireless infrastructure to just that. And in this economy! Or it’s just incompetence. More on that later.

Now here are 3 reasons why this project will ultimately fail – I had to limit myself otherwise this post will take the whole front page!

  1. The Network. Cox chose the CDMA technology for its wireless infrastructure. CDMA is doomed, over, kaput. The 2 CDMA operators in the U.S., Verizon and Sprint, are moving away from it for their 4G network: one chose the LTE standard and the other WiMax, respectively.
  2. The Phones. Handset manufacturers are also focusing on 3G or 4G technologies for their next-generation phones. So what does it mean? The CDMA phones will be all but crappy old phones while the cool iPhone-like devices will be on the other newer and faster networks.
  3. The Company. Cox has zero expertise in running a wireless voice and/or data network. I guess that’s why they chose CDMA as their “core” technology”. That’s also why Cox’s bigger rivals, Comcast and Time-Warner, chose to partner with Sprint instead of also doing it alone.

Believe me, this thing will fail miserably. Or perhaps it’s just a joke. Yeah, that’s it, it’s just a big joke to get some conversation going with the other cable companies, Sprint and T-Mobile.

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Posted by TechPulse 360

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