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Intel (NASDAQ:INTC) is one of the most popular stocks here at Seeking Alpha.

I still own 200 shares, but I fail to see why that is. What has Intel done for you, the individual investor, lately? Sure, it was a great company in the 1990s. My shares doubled, doubled and doubled again, and even after I sold out my old basis in the company I still had 600 shares in 2001. But since then they've gone basically nowhere.

The reason, as I've argued here many times, is that Intel didn't see how its markets were changing. OEMs don't want chips and software. They want finished designs they can sell to customers. As the industry has moved steadily to China as a back office, with America as the marketing and design arm, Intel has fallen further-and-further behind. Although every time I point this out, the Intel fanbois insist better times are just around the corner.

They're not. The PC market is not coming back. The big server market is not growing.

So Intel has a cunning plan, basically a cable box it will roll out with Comcast (NASDAQ:CMCSA) and offer to the public later this year.

The new box will fail, but not for the reason the smart boys at The Register say. It's not the idea of your TV looking at you that will turn people off. The problem is more basic. Content owners simply won't let anyone else get a taste of the profits they generate now, and expect to generate, through bundling.

Many, many companies have tried to get around this, and the smart ones, like Apple (NASDAQ:AAPL), have walked away without even entering the market. Others, like Netflix (NASDAQ:NFLX), have taken nibbles from the market, but have had most of their gains grabbed back by the content owners, in the form of ever-higher rights fees for programs created many years ago.

Right now, all the big broadcasters are trading near their all-time highs. Not just Comcast, but also Disney (NYSE:DIS) and News Corp. (NASDAQ:NWS). It's not just those with pure vertical integration that are gaining. CBS (NYSE:CBS) and Viacom (VIA) are also doing well, trading near their 52-week highs.

They all know that they can play Netflix and its many competitors, including Hulu, Amazon.com (NASDAQ:AMZN) and Google's (NASDAQ:GOOG) YouTube, off against one another. They not only have every incentive to do this in the short term, but also in the longer term. The last thing they want is to risk the enormous profits they get from present cable bundles. So the higher prices go on a la carte offerings, the more share they can protect on bundled product.

Despite all this, the fact is they are losing share. Cable is becoming unaffordable to more and more people, as the cost of bundles keeps going up. I have Comcast for my cable, and my bill is now at $180/month (including Internet) and climbing. Rights owners seem to think they can keep pushing up their prices, and cable companies think they can push up their prices, and that consumers will pay more-and-more to get less-and-less.

How is Intel going to get around that? How is any technology company going to be able to create a computer that lets people get just what they want, paying just what they want, in a world where cable bundlers own the networks they're bundling?

Technology is not the issue. Vertical integration is the issue. So long as the cable companies have the same deal Hollywood had in the 1930s and 1940s, their golden age will continue. And technology's share of the video market will continue to shrink.

Source: Why Intel TV Will Fail