Microsoft, digital cable, etc.........................
199.97.239.52
Microsoft's Cable Play: PC And TV, Too?
Received: June 20, 1997 06:23am EDT From: Inter@ctive Week
From Inter@ctive Week for June 16, 1997 by Peter Lambert
Microsoft Corp.'s $1 billion investment in Comcast Corp. last week gives
it more than an 11.5 percent stake in the nation's fourth-largest cable
company, experts said.
Among the advantages are a chance to boost personal computer sales by
accelerating the broadband services race between the cable and telephone
industries, and a better position from which to dominate a re-emerging
market for interactive television software.
Indeed, digital cable TV set-top terminal operating system provider
PowerTV Inc. (www.powertv.com) may now be in Microsoft's sights, as a
result of the Comcast deal.
Time Warner Cable purchased 1 million Pioneer New Media Technologies,
Scientific-Atlanta Inc. and Toshiba America Corp. set-top boxes
featuring PowerTV's interactive services operating system. Comcast
signed a letter of intent for 300,000 units of the same
Scientific-Atlanta (www.sciatl.com) terminal, but without a firm
contract, the operating system selection remains in play.
The terminal's design emphasizes Internet Protocol, or IP, and HyperText
Markup Language, or HTML, as the common denominators across PC and TV
applications. But set-top boxes may now be in for an operating system
showdown, initially between PowerTV and Microsoft's downsized Windows CE
system aimed at consumer electronics devices. Microsoft intends to adapt
CE for WebTV Networks Inc., which Microsoft has agreed to acquire.
"In a very standards-based and cost-sensitive market, you probably don't
have the luxury of multiple operating systems," said PowerTV Chief
Operating Officer Bowman Rodgers. "Microsoft's investment says there's a
business opportunity here. I'll have to be faster, cheaper and better
than Windows to hold my own. It remains to be seen how effective the
Windows operating system is for consumer electronics."
Microsoft executives could not be reached for comment at the
International Television Symposium in Geneva, but according to
information supplied by the Compaq Computer Corp., Intel Corp. and
Microsoft digital TV alliance (www.dtv.org), manufacturers will bring
appliances such as set-tops "to market using a variety of
microprocessors and software environments. But certainly, we hope these
devices will utilize Intel processors, Microsoft software and Compaq
computer technology."
News of the Microsoft investment in Comcast pushed cable stocks higher,
including shares of Comcast (www.comcast.com), Cox Communications Inc.
and Time Warner Inc. Time Warner shares hit an all-time high of more
than $50 per share June 11.
The upshot, according to analysts: If Microsoft (www.microsoft.com)
thinks broadband is a good investment, so again may Wall Street.
Even regional phone companies see promise in the deal.
"All the things going on in the telephone, cable and satellite
industries point toward broadband as the fastest emerging need on the
part of users," said Barry Nalls, assistant vice president of business
product development at GTE Corp. "It's not a want or a desire, but an
absolute need."
Broadcaster-cablecaster NBC, a Microsoft partner in the $400 million
MSNBC cable TV and online venture, echoed the views of many, citing
"Microsoft's commitment to cable television and to the convergence of
the television and the PC."
On the telco front, Microsoft continues to develop applications for
Asymmetric Digital Subscriber Line, or ADSL, data-over-phone-line
technology with GTE in a 1,200-user Redmond, Wash., trial.
"Microsoft has consistently looked at multiple technologies, and there's
absolutely no slap in the face to GTE in the Comcast deal," Nalls said. |
