Intel is backing away from its attempt to launch a bundled pay-TV service, a result of the company underestimating the huge investment needed to create such an offering and not understanding the intricacies of negotiating carriage agreements with established TV players, observers say. "They really believed they could differentiate on the hardware," said Bernstein Research semiconductor analyst Stacy Rasgon. "What they didn't understand when they started, because it is new, is it's about the content -- not about the hardware."

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