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Marvell Technology Group Inc. (MRVL) is replacing Intel Corp. (INTC) as Google Inc.'s (GOOG) lead chip provider for TVs as the Internet giant seeks to bring down the cost of the devices to raise their popularity.
The first generation of Google TV, which allows users to search and access the full Web via TV sets and set-top boxes, struggled to gain traction with consumers and faced resistance from major networks. The device's high price point and complicated interface failed to appeal to users, who instead turned to offerings from companies such as Apple Inc. (AAPL) and Silicon Valley startup Roku Inc.
But Google hopes the collaboration with Marvell will enable powerful products at attractive price points and help it grow its ecosystem of manufacturers and devices. For Marvell, the partnership marks a push into a new market and closer relationship with Google.
"The way consumers are operating their work and their life is very different," Marvell co-founder Weili Dai said in an interview. "What we're doing here is revolutionizing today's so-called dummy TV and dummy set-top box at home to be dynamically smart."
Much like Google's partnership with smartphone and tablet chip makers, its TV agreement with Marvell isn't exclusive. Other semiconductor companies will also be able to provide processors for the products, though Marvell said it has a lead over its rivals.
Marvell--best known for its hard-disk drive chips and processors for mobile devices--plans to demonstrate Google TV running on its processor at the Consumer Electronics Show in Las Vegas next week.
Google originally unveiled its Google TV software to much fanfare at its developers conference in 2010 and rolled out its first products with chip partner Intel and hardware makers Sony Corp. (SNE) and Logitech International SA (LOGI) later that year. Google TV was part of the company's broader push to become a force in the distribution of television shows, movies and other media content. But its partners have reported lackluster sales, reviews have been tepid, and not all Internet content has been available on the devices, including the popular Hulu video-streaming site.
Logitech International, which made the Revue set-top box and special keyboard built on Google's technology, in November called its effort to make a set-top box for Google TV "a mistake of implementation of a gigantic nature." At that time it said it had no plans to make future Google TV products. And Intel recently scrapped plans to push its chips for TVs, instead focusing on smartphones, tablets and PCs.
To address some of the issues, Google in October updated the software for Google TV, simplifying the product and improving the way people can simultaneously search for content on their live TV listings, Google's YouTube video site as well as on-demand shows available on Amazon.com Inc. (AMAZ) and Netflix.com Inc. (NFLX). It also struck new deals with device makers and TV makers such as Vizio Inc. to bring to market new Google TV-powered devices in 2012.
"There was a big improvement with the updated software, giving a much more graphically rich version of the user interface," Parks Associates analyst Kurt Scherf said. He noted the prior version of Google TV was heavily reliant on a physical keyboard and disappointed many users who were looking for something radically different.
Marvell's Dai said the second generation of Google TVs should be more successful than the prior iteration, with the company's chip, dubbed the Armada 1500, allowing more mainstream pricing for the products. The semiconductor integrates various functionalities on one chip, which lowers the cost.
"The key is just like the smartphones of the world, you have to make [Google TV pricing] mainstream," she said. "At the end of the day, you need all the features and capabilities you want, but the price point has to be right."
Google TVs should hit the market in the first half of the year, Marvell said. The company declined to name TV manufacturer partners.
-By Shara Tibken, Dow Jones Newswires; 212-416-2189; email@example.com