HP, IBM, Intel: Scouting Strange Sectors

From makeup counters to farms, these tech giants are seeking new revenue in unusual places.
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NEW YORK (

TheStreet

) --

Intel

(INTC) - Get Report

chips in cars,

IBM

(IBM) - Get Report

technology powering makeup counters, and

HP

(HPQ) - Get Report

building cattle tracking systems. Silicon Valley is seeking new revenue in some strange places.

For companies of these behemoth sizes, finding unprecedented uses for technology is par for the course. IBM, for example, spent about 6.3% of its revenue -- $1.5 billion -- on R&D during its recent second quarter, an increase of 3% on the same period last year. As Steve Mills, IBM's software chief, recently told

TheStreet

, the company's

sheer size lets it solve problems that other firms cannot.

There is also the possibility that new solutions will evolve from niche markets, just as joysticks came out of NASA's space research.

"When you're so large and so vast, you have to go out and do a lot of research about where you can add a lot of value with your R&D and work out what problems can be solved," explained Brian Babineau, senior consulting analyst at the Enterprise Strategy Group.

Read on to find out how the three heavyweights are working in some of the less-known corners of the tech sector.

Intel

Long synonymous with PCs and servers, Intel is placing its Atom chips in the world of in-car infotainment. Situated in a dashboard or in a passenger headrest, infotainment systems combine digital media, location and even messaging services.

Intel has already announced infotainment design wins with

BMW

,

Daimler

and Chinese carmaker

HawTai

. An Intel spokeswoman told

TheStreet

that the company is also working on other deals, which are not yet public. "In addition, we work with companies that supply direct to car manufacturers, including

Blue Star

and

Hazens

and

Harman

," she said.

"Imagine all the features that you have on your smartphone, on your tablet, your game console, and your set-top box, all in your car," Jim McGregor, chief technologist at research firm In-Stat, told

TheStreet

. "You could transfer a conference call from your house to a VOIP system in your car -- that's where we're going."

Analyst firm iSuppli estimates that the infotainment hardware market is worth around $30.8 billion, a figure which is set to rise to $37 billion in 2016. "A lot of people are looking at this market as an opportunity, because it's another area that consumers are in," added McGregor. "There's huge potential there."

It could be some time, though, before Intel-powered systems are widely deployed in cars. BMW and Daimler's efforts are expected to appear in 2012 and later, while Intel's Hawtai deal was only announced a few months ago.

Intel has not yet attached a dollar amount to infotainment, although the in-car entertainment effort sits within one of the chipmaker's most crucial divisions. "Their embedded group is more than a $2 billion entity -- it's one of their key groups," explained In-Stat's McGregor. "It reports directly to

CEO Paul Otellini."

IBM

A makeup counter and a grocery store may not be the types of place where you would expect to see the latest IBM gear, but at the company's Industry Solutions Lab in Hawthorne, N.Y., eclectic projects are percolating.

IBM's

virtual mirror

allows consumers to test makeup at department store counters without applying it.

Developed with Israeli company

Ezface

, the mirror takes a snapshot of the shopper's face. Consumers can then swipe cosmetics via a bar-code scanner located on the device and the makeup is applied on-screen. An IBM spokesman told

TheStreet

that the virtual mirror is being piloted by a major French cosmetics company, and will soon be arriving in stores.

Less sexy but equally unusual, IBM has also developed a high-tech grocery cart, complete with touchscreen and laser scanner. By scanning products as they are placed in the cart, shoppers receive a running total, and can also use the touchscreen to locate specific items within the store.

The Shopping Buddy, which was developed with Quincy, Mass.-based company

Cuesol

, lets customers scan their loyalty cards when they arrive at a store. Wirelessly connected to the stores' IT systems, the cart then downloads shoppers' previous shopping lists. The cart also sends special offers, including coupons, to the shopper, when he or she approaches certain items or aisles.

Touted by IBM as a sort of personalized shopping assistant, the Shopping Buddy is already being used by northeastern supermarket chain

Stop & Shop.

IBM has not said how much revenue these technologies will bring in, although at least one analyst says that the projects are a key part of IBM's ongoing strategy. "You can always have a faster processor, or bigger disk drives," explained Babineau. "But sometimes you have to go to the far outreaches of industry to find new opportunities and new use cases for your technology."

IBM also uses these technologies as a foot in the door for new ventures and clients. The Shopping Buddy, for example, uses IBM's Store Integration Framework software, and there is plenty of money in this space. Retail solution sales helped push IBM's second-quarter system and technology revenue up 3% to $4 billion.

HP

Like IBM, HP is also playing in some strange places, from

specialized technology services for the funeral industry

to agriculture.

HP is working with the Belgian government on a major project to track cattle. Designed to prevent contaminated meat from reaching the market,

the web-based tracking system

provides vets and government officials with the animals' histories, tracking their way from barnyard to slaughterhouse.

Built by HP's Application Development Services and the company's EDS division, the system uses information scanned from "cow passports" to quickly collate data on animals, their birthplace and their movements. This data is crucial in the battle to combat epidemics such as foot-and-mouth disease.

HP may need to implement more of these types of systems. The company's application services revenue dipped 2% during the second quarter to $1.5 billion, although HP's overall services revenue increased 2% to $8.7 billion. Services also contributed 40% of HP's total second-quarter operating profit.

Enterprise Strategy Group analyst Babineau believes that we will be seeing more and more weird and wonderful tech projects. "Everybody knows that technology is going to be a part of their lives, so it will be more about these specific-use cases."

-- Reported by James Rogers in New York

Follow James Rogers on

Twitter.