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Much like Sony (NYSE:SNE), Intel (NASDAQ:INTC) has to reinvent itself.

It's starting by getting into a business Google (NASDAQ:GOOG) is abandoning, the old set-top box.

Techcrunch first reported the story of this device, which is set for a focused, city-by-city rollout later this year. It will combine Internet streams, cable sports, and other services like Redbox (CSTR) streaming, based on a Comcast (NASDAQ:CMCSA) reference design.

Reuters says the new box will also use facial recognition technology to customize the ad stream, which could make it very interesting, although there's something Big Brotherish about that, Forbes writes.The hope is that Intel can at least use this technology to go after Nielsen (NYSE:NLSN), whose ratings are seen as unreliable. If the set knows who's watching and who's out of the room, that's data advertisers will pay for.

The original plan was to launch the new box at CES next week, but PC World reports that schedule has slipped, owing to the same problems faced by every other TV innovator over the last decades -- content owners' resistance. Instead, expect the company to tease the product at events early this year and do some beta testing.

The company has bought some top talent for the launch, including the "geniuses" behind the BBC iPlayer and Jawbone Jambox. As you can tell by the quotes, I don't think these guys are product geniuses, but if they have the chops to get content owners to sign on to a compelling service, that may be genius enough.

Intel could really use a lift. It's currently selling at a P/E multiple of 9, which is well under the general market. Unless it reports a huge fourth quarter, sales for the full year may not be much better than last year's $59 billion. PC sales were reportedly soft over Christmas, and some reinvention is necessary. Is this it?

Intel investors hope so. But I'll bet that, as hopeful as they may be, they could well lose a financial argument with Apple (NASDAQ:AAPL) bulls, owing to reputation. Which means that if Intel's content is compelling, and if Apple fails to steamroller the space with whatever it delivers, the potential gains for Intel are enormous.

Source: Intel Tries To Reinvent Itself