Intel Will Beat Apple in the Living Room

NEW YORK ( TheStreet) -- When I first heard the rumor that Intel ( INTC) would become what amounts to a conventional cable television provider -- via Internet delivery -- I scoffed.

There was no way stodgy, old, we missed mobile worse than Facebook (FB) Intel could compete with living room frontrunner Microsoft ( MSFT) or we figured out the living room, but we would rather not provide meaningful details Apple ( AAPL). The more I hear about Intel's plans and, to a lesser extent, Apple's lack of plans, the more I think Intel has come to play and will win.

Intel intends to release a set-top box in time for the holidays. That much we know; however dig the details that have not been quite as widely publicized.

Intel's device will provide access to a suite of content choices so complete you will be able to drop your current cable or satellite provider and make Intel your lone source. The company's offering will be as much about the actual content it delivers as it's about how subscribers select, organize and interact with that content. And it will be social.

As Intel's core businesses continue to struggle, Intel Media -- for all intents and purposes, a standalone startup venture -- could end up digging the chipmaker out of its seemingly hopeless ditch. VP/GM Erik Huggers runs a ship that doesn't depend on long shots such as Microsoft for success. In many ways, Intel Media operates as the anti-Intel, but if Huggers' aggressive push into television goes well, the approach and culture could wind up a blueprint for the larger company.

Huggers has an edge over most newish other players in the living room, particularly Apple, because the cats who hold the cards -- huge content providers such as Time Warner ( TWX) and News Corp ( NWSA) -- know him and like him. When Huggers, a former BBC executive, enters a room to negotiate partnerships and deals with top executives at these companies -- and, yes, the discussions are taking place at the highest levels -- he doesn't bring the misguided arrogance that Apple does.

Huggers and his team at Intel Media recognize that big content owners have no reason to cut access deals to their content. They have seen how Apple operated (and continues to operate) with the music industry and how it dictated the terms of engagement to wireless carriers, two groups that need/needed Apple more than Apple needs them.

Big media doesn't need Apple. It's doing better than it ever has in its history. Have a look at the relative outperformance of the stocks in the sector. Plus, big media are not incredibly fond of the people Apple brings to negotiations.

Expect Intel to cut meaningful content deals. I would be surprised if more than a few are not already signed and sealed. Don't expect the same from Apple; we'll be lucky if we get more than an update to the existing Apple TV this year.

Simply put, Intel positions itself as a good partner. That's not the game Apple plays and, even if starts trying, it doesn't have respected names like Huggers . . . names New York and Hollywood greet with handshakes, not guarded skepticism.

The user experience Intel is working on for its set-top box could transform the living room experience. From what I ascertain, Tim Cook is lost. And few people in the industry believe Steve Ballmer will ever properly position Xbox to be a true contender.

Intel TV will organize content in the most intuitive way, while keep some of the features consumers have become comfortable with, such as grid-like program schedules, as options. It will evolve from its launch as its users get to know the services. These updates will take place in the background, possibly without prompts, and will not require new hardware. And, while it might not happen at launch, Intel TV will be more social than anything that has come before it.

For example, expect a feature to be known, tentatively, as Watch With. You have Intel service in New York. Your friend has it in Chicago. The Rangers are playing the Blackhawks. You want to simulate the experience of watching the game together. You will be able to open windows into one another's living rooms and view the game together. Less invasive social options will also be available.

I'm still not sure I have faith in what Intel is doing -- or not doing -- with its core businesses, however, come the end of this year and into next, I'm confident about two things: Intel's TV venture will be a company bright spot and it will make Apple's foray into the living room look even more behind schedule than it presently appears. And it will serve as another factor that leads to Tim Cook's departure as Apple CEO.

-- Written by Rocco Pendola in Santa Monica, Calif.
Rocco Pendola is TheStreet's Director of Social Media. Pendola's daily contributions to TheStreet frequently appear on CNBC and at various top online properties, such as Forbes.