The company is said to be talking to content providers and intends to offer the service by the end of the year.
Intel has been looking for non-PC markets for its chips for years and this is another attempt to do that.
In 2009 it had to write off $1bn of its investment in Wimax operator Clearwire. Intel hoped that the Clearwire investment would get Intel chips into Wimax wireless equipment. It was the wrong bet - the world went for LTE.
Wimax was one of a string of Intel's would-be diversifications which went wrong. CLECs was another (Competitive Local Exchange Carriers); consumer electronics was a particularly short-lived new venture; its first-ever attempt at diversifying was into electronic watches which cost Intel $15m in the 70s.
Intel co-founder Gordon Moore wore the Intel watch, called a Microma, for many years ands was still wearing it in 1997 when he told me: "It reminds me, if I ever find myself thinking of getting into other consumer products, of the trouble we'd be getting into."
With Google, Apple and Microsoft all engaged in IPTV, Intel's chances of success are seen as slim.