NewTeeVee reports that Intel has shut down its its Digital Home Group, which was working on chips including Atom-based CE media processors for Internet-based set-top boxes, including Google TV and the Boxee Box. The Digital Home Group team has been reassigned to tablet development. Some work will continue on devices for cable and IPTV set-top boxes, such as the processor that Pace is using in the Xfinity set-top box that it developed for Comcast.
Intel was a partner in Google TV's development, and Intel's involvement was partially responsible for the failure of the first-generation product. The reason was that only Intel processors could be used in Google TV devices, and the cost of Intel's Atom processor made the price of products such as the Logitech Revue uncompetitive. The Revue was launched at $299, then dropped to $250 and now sells for $99. The price of Intel's processors wasn't the only problem, of course; poorly-designed software, inscrutable remote controls and a lack of support from content providers didn't help.
Now, processors based on ARM look like they have the upper hand in future Internet set-top box development. ARM-based processors are less expensive than Intel's Atom, and potential set-top box makers such as Samsung already manufacture them. Apple's A-series of processors is based on ARM. Now, it appears that both Google TV and Boxee will go with ARM for their next-generation products.