Intel may have a firm grasp on the desktop and laptop processor markets, but the company has continuously struggled to secure a slice of other segments and reduce its dependence on PCs. In addition to trying to make inroads alongside ARM in the mobile space, the chipmaker has dabbled in the entertainment realm with processors inside televisions and related electronics. Unfortunately, Intel's living room endeavors have been unsuccessful.

In an announcement today, Intel said that it would disband (or at least seriously restructure, depending on the source) its Digital Home Group (DHG), the unit that produces Atom-based system-on-a-chips for consumer electronics. Based on the statements we've seen, it sounds like the DHG will be assimilated into Intel's tablet-oriented group and the company won't entirely exit the consumer electronics scene – just the embedded TV portion.

The company won't push to get its chips inside TVs anymore, but it'll still supply components to set-top partners. Intel undoubtedly faced fierce opposition in the market considering many of the major TV manufacturers, such as Samsung and Panasonic, produce their own chips. Meanwhile, like the mobile market, Intel has had to compete against the endless sea of power-efficient ARM processors that are available for media hub devices.

Even without its DHG, some of Intel's upcoming mobile platforms would probably suffice for set-top boxes, considering they're specifically tailored to compete with ARM. In other words, the move is more like a natural consolidation of two groups that had overlapping roles: producing low-powered consumer electronics SoCs. "There is a ton of synergy between tablets and TVs (both are mainly content consumption, viewing devices)," Intel said.

Inte's Atom CE4100 SoC has appeared in a handful of entertainment boxes, including D-Link's Boxee Box and Google TV products by Logitech and Sony. None have been particularly prosperous. Following weak sales, Logitech cut the price on its Revue ( 69 ) from $300 to $200 in May, some seven months after launching, and then by another $100 in August. Speaking to Gigaom, Google said it would still work with Intel on Smart TV products.