By now it might seem to be a familiar song and dance. For years, technology gurus have been promising us that mobile TV is just around the corner. Yet widespread use of this technology has still to appear, and the internet-based solutions that have attempted to come close have been unattractive to consumers because of their high price and slow load times.
Certainly the potential for such a technology is huge. The industry predicts that consumers would be willing to pay high prices to be able to receive TV signals on their handsets, with the market conservatively expected to exceed $1 billion by 2010. Not only could such technology be used for receiving entertainment, but it could also be used to impart urgent weather and traffic messages to people wherever they are.
However the progress made on this front has been limited because different areas have developed different, incompatible systems for transmitting and receiving the TV signals. Some countries have been using Digital Video Broadcast – Handheld (DVB-H) technology, while others are using DMB or Qualcomm’s MediaFlow.
The mobile technology investors at Intel Capital have been active in this area, and they say their latest acquisition, Mirics Semiconductor, is poised to solve the problem of incompatible frequencies.
“The big challenge is, country by country, everyone is following different broadcasting standards,” says Intel Capital’s Marcos Battisti, who heads European mobile acquisitions for the firm. “What we felt was unique about Mirics was its capability in providing multiple standards in a much bigger capacity than we have seen with other companies.”
Mirics now joins a group of other mobile TV startups Intel has added to its portfolio. Earlier this year Intel invested in ViDeOnline Communications, an aggregator of digital media content for mobile phone carriers. It also recently made an initial investment in French mobile TV chipmaker DiBcom, which makes baseline items required for mobile processors. These investments come amidst a general increase in VC interest in the space. In November of 2006 MobiTV, which offers mobile TV content via a two-way data network, completed a series C round of funding, having raised $180 million from firms such as Oak Investment Partners, Menlo Ventures and Redpoint Ventures.
Ashish Patel, Intel Capital’s European managing director, says the key to developing the technology that will make mobile TV work is acquiring scale. “The only way you can achieve scale is if you have a single chip where you could operate across the spectrum,” he says. “We started our investment thesis in mobile TV two years ago with that in mind. We’re certain it will become a mainstream item.”
Intel Capital, which has invested more than $6 billion in approximately 1,000 companies since 1991, has become increasingly aggressive in going after such investment schemes recently under the leadership of senior vice president Arvind Sodhani. While it previously was less active and allowed other firms to structure deals, it has been the lead investor in several recent deals. It has also taken a more active management role, organizing events where portfolio companies can hold audience with Intel’s extensive network of technology buyers. Patel says these events have actually led to two M&A deals thus far.
With its increasing investment in mobile TV companies, these connections may be the key to making mobile TV finally work.