For almost as long as the internet existed, there was talk of ‘convergence‘, merging the internet with that of the tv. Somebody once described TV as a ‘lean back’ experience, and the internet as a ‘lean forward’ one. That observer did see little merit in ‘convergence’ (how would you have to lean, upright?). However, the advancement of technology might just provide a solution, although it might not necessarily be a nice one for one of the companies we’re following, Sigma Design. In fact, it looks a little ominous..

From PcMag:

• On Wednesday, Intel and Yahoo announced a sweeping initiative to bring a widget-based platform to embed applications – and ads – directly on your HDTV. Several major CE manufacturers expressed support.
• The two also announced the combination of the Intel Media Processor CE3100 (“formerly known as “Canmore”) with the Yahoo open widget-based platform for TV.
• “We’re at the dawn of a new era, delivering rich Internet applications with the power of Web 2.0,” said Eric Kim, Intel senior vice president and general manager of Intel’s Digital Home Group during a keynote at the Intel Developer Forum here.
• “We realize that there have been many attempts to bring Internet to the TV with limited success – remember Web TV? – but what the difference is now is bringing the full richness of the Internet to televisions,” Kim added.
• The partnership won on-stage endorsements from Comcast, Disney and Sony, and supporting statements from CBS, Motorola, Samsung and Toshiba accompanied video of the event projected onto a display. Intel also announced an Intel CE Solutions Alliance as a means of combining the expertise of hardware, software, and other solutions providers. The Yahoo-Intel partnership is a global one, although the U.S. will be the launch region.
• Although the technology is available now, it will have to wait for actual OEM product commitments. None were mentioned.
• The Intel-Yahoo partnership was most likely the shocker of this year’s Intel Developer Forum. Historically, Intel has never been able to crack the television market, which has traditionally meant set-top boxes designed around MIPS processors. But Intel has used its IDF shows to make the case that software runs best on the Intel architecture, a case that the company has apparently successfully made to consumer electronics OEMs.
• One of the failed attempts to merge the Internet and television, ironically, was “Viiv,” Intel’s apparent brand for a connected TV, which the company launched in 2005 and refined a year later. “We think in order to address the mass market of television, we need a purposeful foundation. Viiv was not a purposeful foundation” because it was designed around the PC, Kim said.
• Interestingly, an Intel-Yahoo demo booth included functional boxes from Tatung and Gigabyte, evidence that the Taiwan market considers this a viable device. Once one Taiwan supplier endorses a concept, such as the Mobile Internet Device, most of the island’s other technology firms tend to jump in with their own models. What is it?
• “Essentially, we’re merging the content of the cinematic Internet with the TV in a way that’s never been done before,” said Patrick Barry, vice president of Connected TV for Yahoo. But the two haven’t achieved the kind of heights it can achieve, he said, even after the advent of HDTVs or even 3D.
• “It’s a real category; not a novelty, and it can transform the business,” Barry said.
• The Intel-Yahoo partnership either will require a set-top box, or the Canmore platform integrated directly into the TV. At press time, the price or availability of such set-top boxes was not known, but Kim said a set-top box would cost “substantially less” than the $300 charged by Sony for a similar device. The technology could also be built directly in to TVs, Blu-ray players, or other devices.
• The experience, however, includes a “river of widgets” residing at the bottom of the HDTV TV screen, allowing full immersion into the Internet from the couch. The river of widgets appears to cycle through from left to right, and can include integration with Flickr, stock prices, or other widgets.
• At the core of the software platform is the Yahoo Widget Engine, also known as Konfabulator, now in its fifth generation, Barry said. It’s the same engine used for Yahoo’s desktop PC widgets, so desktop widgets will apparently work.
• Another feature is called “Sidebar,” which expands out the widget (also referred to as a “snippet”) into a vertical sidebar alongside one side of the TV. The Flickr snippet, for example, placed a small array of photos in the Sidebar, or what Barry called “a more full featured area in which applications can run in all their glory.”
• You can even start a slideshow in place of the TV picture. Another cool example was the Blockbuster widget, where you can select a movie trailer and play it in high definition, on your television. Another featured snippet: Twitter.
• We expect that the TV dock will be personalized by different users,” Barry said. That means personalization, and the ability to log in via a PIN. Parental controls will also be included, he said. Even other media can be accessed via DLNA.
• The problem for consumers? Ads. That’s how Yahoo pays the bills, and ads are “the currency of the Internet”. Yahoo and Intel executives described ads as a better way to buy products, one in which shoes featured on The Hills, for example, could be instantly purchased directly from the TV.
• “Today we still spend five times as much money on television as we do on the Internet,” added Irvin Gotleib, chief executive officer of GroupM, a $60 billion media investment firm. “Fundamentally, however, everyone sees the same ad, which is not the best kind of targeting initiative, and there is a limited ability to delve into content. This changes the whole accountability.”
• “It puts the TV on an equal footing with the Internet” and could actually leapfrog it if used effectively, Gotleib said.
• The CE3100, based on the Pentium M, is just a few weeks away from production, when it begins shipping to OEMs, Kim said. The chip contains 150 million transistors, about as many as the Pentium 4. But the fact that it can be manufactured on Intel’s leading-edge manufacturing processes also means that consumes far less power and can be produced for much cheaper, leading to a cost-effective product for end customers, Kim said. Pricing, however, was not announced.
• The Canmore is part of Intel’s new system-on-a-chip initiative, first announced in July. Tucked inside it is hardware/softeware decode capabilities for video, including the ability to decode both standard-def MPEG-2 streams as well as high-def H.264 MPEG-4 video. A demo mapped a pair of video streams onto two 3D windows. It also runs Linux.
• “There never has been any 3D graphics in this space before, and we think it opens up some dramatic new opportunities,” Kim said in a media briefing following the keynote.
• A follow on chip, called “Sodaville,” will be released in 2009 and will use the Atom core.
• From a software side, the platform supports all of the expected frameworks: AJAX, HTML, Flash, and Javascript, Kim said, and others are expected to be added. DRM schemes will also be supported, including Windows Media. To prevent virus-laded widgets from being downloaded and crashing a TV, a “gallery service” and the CE working group were set up to vet new widgets, he said.
• “At this time, Yahoo is operating the gallery,” Barry confirmed.

Here is another take on the same development, from trustedreviews:

• There’s no doubt that Intel’s Media Processor CE 3100 has the potential to revolutionise our TV experience, but as always, any hardware is only as good as the software that runs on it. The biggest stumbling block for accessing the Internet on a TV has always been the user interface, and the fact that the traditional browser model just doesn’t work in the living room environment.
• This is where Intel’s collaboration with Yahoo comes in, and the introduction of the Widget bar. Using the processing power of the CE 3100, Yahoo has created an overlay bar that runs along the bottom of the screen, which can be populated with your favourite web applications. Then it’s simply a matter of scrolling through your list of widgets and choosing the one that you’d like to use.
• Once you’ve selected an application a sidebar will open up for you to interact with. If you select Flickr, you’ll be greeted with your photo albums, from which you can select any pictures that you wish to view. From here you can also kick off a slideshow, where your images will be displayed on the whole screen.
• Next up they selected the Blockbuster widget, and demonstrated the ability to stream a 1080p trailer for a movie. I’m not convinced that the majority of consumers will have enough bandwidth to stream 1080p content direct from the Internet, but that’s a stumbling block for video on demand as a whole, not just this particular implementation.
• Although Yahoo’s widget system definitely looks like a step in the right direction when it comes to Internet connected TVs, there are still a few major issues to consider. The most glaring potential problem is text input. It’s all very well having a widget for your favourite social networking site, but once you’ve selected it how are you going to write anything? Put simply, the TV remote control will not be an adequate tool for writing text, and having a keyboard in your living room kind of defeats the purpose of this kind of integration.
• Of course there’s an argument that a high-end TV with this kind of functionality could ship with a decent LCD screen remote, which can bring a virtual keyboard to the party. However, if this kind of technology is going to filter down to the mainstream, it’s unlikely that consumers will be willing to spend the extra for a fancy remote that gives them keyboard functionality.
• Again though, this isn’t a problem that’s limited to Yahoo’s widgets. Recently I was shown some BD Live applications, like live blogging while watching a Blu-ray movie, and once again you’re expected to input text via a remote control – far from ideal. To be fair, Intel said that it wasn’t really expecting the usage model to include much in the way of text input, instead seeing the widget environment as a way to view online content rather than post it. The important message though, is that Intel and Yahoo have created a cohesive amalgamation of TV and Internet that doesn’t need external boxes or a Media Center PC. This could be the start of something very good.

And a take from EETimes which digs a little deeper into the technological capabilities:

• The new chip sports a 3,000 Dhrystone MIPS x86 core, three DDR2 memory channels and a graphics block from Imagination Technologies capable of spitting out 13 million polygons a second in a chip dissipating less than 10W. And that’s using 90nm process technology and a three-year-old notebook PC core.
• The chip comes with a full software stack and reference design for use in Blu-Ray players as well as set-tops and TVs for both the U.S. Tru2Way cable spec and Europe’s DVB standard. Samsung and Toshiba have said they will design systems with Canmore and other giants including Sony have expressed some level of interest.
• Next up is Sodaville where Intel swaps in its 2W Atom x86 core and leverages its 45nm process technology. The 2009-generation chip will be part of a family of devices customized for various consumer systems.
• “This is a really different chip for the consumer guys,” said Steven Wilson, principal analyst for consumer video technologies at ABI Research (Oyster Bay, NY). “It has a of graphics capability and raw performance you don’t usually see in traditional CE gear.”
• Intel has not announced pricing for the chip which will be in production in a few weeks, making it hard to gauge exactly where it might fit. Wilson said it could at the very least be a good platform for high-end Blu-Ray drives looking to add fancy user interface features and is well timed for cable operators looking for powerful but low-cost systems to run upcoming interactive services.
• “Two or three years down the road this could be a very inexpensive platform covering a range of products,” said Wilson. Beyond the graphics and CPU performance, Intel is touting its x86 as the native silicon for the Web—the next big thing for today’s digital TVs.
• “The TV is at an early stage of delivering connectivity, so we think it is a good time to get this going,” said Eric Kim, general manager of Intel’s digital home group who announced Canmore at the Intel Developer Forum Wednesday (Aug. 20).
• Kim launched the chip along with a software framework developed in partnership with Yahoo! for delivering Internet services on a TV via software widgets. About a dozen companies including U.S. cable TV giant Comcast and set-top maker Motorola have agreed to help define and manage the software environment which Intel calls the Widget Channel.
• “After flat panels and high definition, people want to bring the Internet to the TV,” said Patrick Barry, vice president of connected TV services at Yahoo!
• Mark Francisco, a Comcast fellow, said the cable operator sees the Widget Channel as a complement to the Tru2Way services it and other U.S. cable companies are starting to deploy. Tru2Way represents a set of stable applications and services in a managed end-to-end cable environment, while the Widget Channel could be an avenue for short-lived applets customized by users and related to time-sensitive events such as the Beijing Olympics.
• “Intel’s schedule for the chip and software is critical because the cable operators are trying to roll out Tru2Way services this fall,” said Rick Doherty, principal of Envisioneering (Seaford, NY). As for Blu-Ray, Intel’s timing is perfect. If Intel makes gains in this space, it will largely be at the expense of Sigma Designs whose processor is used in most Blu-Ray drives today.
• With the format war just settled, drive makers are focusing on how to roll out a range of high-end to low cost drives. “Canmore has the potential to grow the population of Blu-Ray players greatly because we are still in an early adopter phase,” said Andy Parsons, senior vice president of advanced product development at Pioneer and marketing chair of the Blu-Ray Association.
• About six million Blu-Ray drives have shipped in the U.S. to date, most of them built into Sony Playstation 3 consoles. With the format war settled, there are now some 900 Blu-Ray titles, more than double the number just six months ago.
• So-called Blu-Ray Live players that can link to the Net are just hitting the market with first products out from Samsung and Sony. Blu-Ray players range from less than $300 to more than $800 today.
• “They are doing exactly the right thing, pushing the x86 everywhere,” said Fred Weber, former chief technology officer of archrival Advanced Micro Devices who now heads a memory chip startup. “This is the sort of thing I have been preaching for years,” said Weber on hand for one IDF session.
• The Canmore designers got most of the IP blocks and tools they needed from various Intel divisions, including the new SoC group, said Suri Medapati, principal engineer and architect in Intel’s digital home group who led the design effort.
• Most of the IP on Canmore comes from Intel’s chip set and mobile groups. The processor is the 800 MHz Dothan core from Centrino notebooks, and the graphics is an Imagination Technologies core supporting OpenGL ES 2.0 also used by the mobile group. The chip set group provided cores for 2.5 GHz PCI Express, serial ATA 2.0, USB 2.0 and a gigabit Ethernet MAC.
• A decode block started with technology acquired about three years ago with Israeli startup O-Plus. Intel upgraded that core for a previous part and enhanced it again for Canmore. It now handles MPEG2 and H.264 decode for up to two simultaneous 1080i streams at 60 frames/second. A dual 300 MHz audio DSPs came from Tensilica.
• Two other blocks were homegrown by the Canmore team–a display processor for scaling and interlacing and a security processor. The latter block handles conditional access keys for cable-TV card security and accelerates AES, 3DES, RSA and other algorithms.
• The chip also includes three 800 MHz DDR2 controllers, six 10-bit video DACs and support for HDMI 1.3a.
• The Canmore group created its own 90nm EDA chip design flow using a combination of tools it designed itself, ones from other Intel groups and third party tools. It uses some parts of a standard SoC flow created by the corporate team under Singer.
• The digital home team has already finished a 45nm design flow for its next-generation parts which are well along in design. It has also helped the corporate SoC group in an effort to define an Intel standard SoC bus yet to be announced.
• Intel hired Jim Crammond, a senior designer with a background at set-top companies including Digeo and Moxie to help define the software stack for the chip. The company partnered with VividLogic to port its Tru2Way software to Canmore as part of a set-top reference design.
• Blu-Ray software comes from Alticast, and DVB software comes from Futarque along with software from other software and silicon partners on the reference designs including Texas Instruments and Microtune.
• The software stack is based on a standard Linux 2.6 kernel with Yahoo! providing the widget engine to enable thirds-party applications. Interestingly the middleware supports Microsoft Windows DRM, though Windows has no other role in the platform.
• Clearly consumers want Internet TV. Intel researcher Genevieve Bell notes that 43 percent of people who watched SuperBowl 2008 had simultaneous links to the Web on their home computers, and the latest American Idol episode had 97.5 million viewers vote on their favorites via cellphones and PCs.
• People want internet TV in part because television is inherently a social phenomena, said Bell. Now that TV makers are delivering a broad range of 1080p HDTV sets, adding connectivity is a logical step for vendors as well.
• Whether Intel can deliver the platform for Web TV is unclear. Its latest initiative clearly has a strong foothold with solid silicon, software and partners. If the 90nm chip doesn’t make a splash at the next CES, the 45nm follow on will likely get some significant attention at CES in 2010.

Competitive implications for Sigma Design:

• Head on competition from Intel’s media processor, although Sigma’s HDTV segment is only 3.4% of 2008 estimated revenue [Investor Presentation July 08]
• It’s head on competition for Sigma’s blue-ray chips
• It could offer a cheaper alternative to full IPTV, a threat that is not unsubstantial if these chips get build into cheaper set-top boxes, or even HDTV’s themselves or blue-ray players
• The capabilities of these widgets still seems somewhat limited to us. For instance, it says that it can play HDTV trailers (if there is enough bandwidth to stream 1080p, which is a big if). The question is, can it play the full movie?
• So it’s not likely to be head-on competition with IPTV, but if it gets traction, it might reduce demand for it, and that’s bad enough.