Intel to Sell OnCue

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According to Bloomberg, Intel Corp. (INTC) is looking to sell its yet-to-be-launched online pay-TV service, OnCue and has held talks with potential buyers like Verizon Communications Inc. (VZ) in this regard. Intel reportedly needs $500.0 million to cover costs although it’s not clear yet whether the service will fetch that price.

Samsung Electronics and Liberty Global have expressed interest in the deal but Verizon could be the ultimate winner. Verizon is a renowned name in the pay-TV business, so OnCue would complement the business well, thereby consolidating its position.

OnCue was developed to increase competition for cable companies by providing live TV, streaming and on-demand content over a high speed Internet connection. In order to test the efficiency of the service, Intel had already developed servers, set-top-boxes and applications for smartphones and tablets.

However, Intel (and Otellini) probably did not anticipate the difficulty in securing content deals, which is the main reason the service never took off. Once Krzanich took his place, the company turned focus to core competencies.

Intel will now focus on its core competencies, expanding its core business lines and by forging manufacturing agreements with other OEM manufacturers instead of adding new business lines and moving into the consumer electronics market with flashy new products as tools for achieving growth.

Intel Corporation is one of the world's largest semiconductor chipmakers. Intel reported third-quarter revenues of $13.48 billion, within the guidance range of 13.5 billion (+/-$500 million). This was up 5.2% sequentially and 0.2% year over year

Currently, Intel has a Zacks Rank # 3 (Hold). Better ranked stocks in the same sector include Intersil Corp. (ISIL) and Microchip Technology Inc (MCHP), both with a Zacks Rank # 2 (Buy).

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