Comcast Corporation (CMCSA), the largest cable MSO (multi-service operator) in the U.S, recently entered into an agreement with Intel Corporation (INTC). As per the agreement, Comcast will use Intel’s chipsets in its set-top boxes.
The usage of Intel’s microprocessors in Comcast’s Xfinity TV devices, which supports television service anywhere and anytime, will enable the company to provide better services to its customers such as better navigations, photo/video sharing, social networking, finding movies on a local cable TV channel or on a satellite TV channel.
With the growing popularity of Smart TV (combination of the internet and Web 2.0 features into modern television sets and set-top boxes) and tablets, the demands for regular PCs are declining day by day. So, Intel Corporation, the world’s largest chipset maker for the PC market is planning to enter the consumer electronics market. Hence, the agreement with Comcast is a huge step toward achieving its goal.
Comcast boasts a huge subscriber base in the U.S and the recent agreement will enable Intel to get a strong foothold in the consumer electronic market. Moreover, with increased roll out of 3G /LTE services the demand for IPTV services will increase, which in turn will boost the demand for such hybrid television or set-top boxes.
In order to provide such next generation television services to its clients, Comcast has also teamed up with Pace plc, a developer of hybrid television or set-top boxes. Recently, Comcast also teamed up with iControl Networks, to provide home security services to its clients. Moreover, the company has also formed a strategic partnership with Skype Ltd. to offer its subscribers high-definition (HD) video chat from their TV sets.
Comcast has emerged as the largest integrated content development and distribution company in the U.S.after completing the acquisition of NBC Universal. We also remain very much optimistic regarding the company’s diversification, network upgrade and innovative product offering strategies.
Comcast is facing severe competition from both telecom and satellite service providers that started offering subscription TV services at a lower price. Comcast has to undertake such an innovative approach to boost profitability and gain a competitive edge over its peers.
We, thus, maintain our long-term Neutral recommendation for Comcast. Currently, Comcast has a Zacks#3 Rank, implying a short-term Hold rating on the stock.
COMCAST CORP A (CMCSA): Free Stock Analysis Report
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