Chinese Internet giant Baidu Inc.’s (BIDU) independently operated subsidiary, iQIYI, recently entered into a strategic alliance with chipmaker Intel Corp. (INTC) in a bid to ramp up its online video platform.
iQiyi is an online video content provider, in which Baidu owns over 16% share. iQiyi was launched in 2010 with investments from both Baidu and Providence Equity Partners.
Per the collaboration, the companies will work toward enhancing iQIYI's video storage, trans-coding distribution, cloud computing and big data analysis.
Intel will help in the renovation of iQIYI's data center and content distribution network by providing its technologies, including the Intel Xeon processor, Intel PCIe/NVMe Solid State Drives (SSDs), and 10 Gigabit Ethernet Adapters. The hardware along with Intel's virtualization technology will enable iQIYI to boost its high-performance video platform with proficient and stable data storage and operation.
The alliance comes after iQIYI entered into a cooperative project in Sep 2014 with Dolby Laboratories (DLB) to perk up the viewing experience on iQIYI with the help of Dolby surround sound and other Dolby technology.
According to research firm iResearch, which focuses on China’s Internet industry, iQIYI intends to more than double original production in 2015, with at least 30 titles and 500 episodes in the pipeline compared with just 13 in 2014. Intel’s cutting edge technologies will enable iQIYI to achieve its target.
The emergence of iQIYI will extend Baidu’s presence in the online video market, which will thereby improve its competitive position in the space.
However, increasing competition on its own search platform from the likes of Qihoo 360 Technology and Sohu’s (SOHU) Sogou search engine remains a matter of concern.
While Baidu has a Zacks Rank #4 (Sell), Intel shares hold a Zacks Rank #2 (Buy).
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