November 17, 2010 / 12:39 AM / 7 years ago

Intel buys Canadian startup and eyes embedded market

HUNTINGTON BEACH, California (Reuters) - Chipmaker Intel Corp bought a Canadian digital signage start-up and said it could make other nimble acquisitions and investments to bolster its embedded chip business.

Toronto-based CognoVision uses small camera sensors and computers in signs to detect faces and track how people watch ads as they move through a store and can adapt advertising in real time.

Intel expects the "smart sign" market to expand quickly over the next several years and wants its Atom chips to handle the computing behind those displays.

As well as signs, Intel sees Web-connected car entertainment systems as ideal places to embed its microprocessors.

"It's an area where for not a lot of money you can really pick up some of the leading companies that turbo charge you into this segment," Intel Chief Executive Paul Otellini said at the 11th annual Intel Capital CEO Summit in Huntington Beach, California on Tuesday.

"Home energy management would be another one, and that's where we're bringing people portfolio investments and selective acquisitions," he said.

At the event, which gathers CEOs, corporate technology decision makers and thought leaders from around the world, Intel also unveiled $77 million worth of investments in start-ups whose focuses include cloud computing and Web-enabled television.

Intel Capital, charged with backing business models that complement its Santa Clara, California parent's long-term strategy, said it has taken new equity stakes in 18 companies.

"One of the most exciting areas that is emerging is TV being connected to the Internet," Intel Capital President Arvind Sodhani told reporters.

NEW CHIPS

In September, Intel launched new chips aimed at in-car computers and web-television.

"One of places they have made very little effort has been the embedded world, sticking chips everywhere -- pressure sensors in your tires, digital signage. They see that as a great opportunity to start putting their silicon in places it hasn't been before," said Real World Technologies analyst David Kanter.

Intel declined to say what it paid for CognoVision but said the deal closed in September. Intel processors have powered CognoVision's software applications since at least July 2009.

When a shopper turns to watch a digital display or lingers over a specific sign, for example, CognoVision detects and compiles this information and can even prompt the sign to change its message depending on the age or gender of the viewer.

One of Intel Capital's new investments is in Malaysian start-up Select-TV, which sells to hotels Web-enabled set-top boxes that use Intel's Atom processors, which dominate the netbook niche.

Other investments by Intel Capital were geared toward social media and mobile devices.

Intel Capital is also investing in, and will manufacture silicon wafers on behalf of Lilliputian Systems, a Wilmington, Massachusetts-based firm that plans to make portable butane-powered fuel cells for recharging smartphones and other portable devices.

Reporting by Alex Dobuzinskis; Editing by Andre Grenon and Richard Chang

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