GTW Home PCs deliver Internet access at broadband speed
[This bodes well for AMD as GTW Home PCs use Athlon & Duron. This should fuel demand for multi-PCs at home and small biz]
CNBC Power Lunch 11/10/00
TYLER MATHISEN: Well, big high-tech companies are betting on the Internet to play a more active role in people’s lives, particularly in their homes.
Today Broadcom and Gateway announced a major deal under which the chip-maker will provide its networking chips into all new Gateway PCs to help deliver Internet access at broadband speed.
Broadcom says the move is a major step in transforming the PC from – I quote – computing island to a connected media appliance. We’re going to find out what that means.
Here’s a one-week look at Broadcom shares. And, as you see, they’re sliding down earlier this week. Right now down 38 cents at $162.13.
Joining me now Broadcom’s Chairman and CEO Henry Nicholas. Mr. Nicholas, good to see you, sir.
HENRY NICHOLAS (Broadcom, Chairman & CEO): Good afternoon. How’re you doing?
MATHISEN: All right, tell us about this new deal with Gateway, specifically, and some other players. What are you doing here? And what’s it going to mean to me in my home?
NICHOLAS: Well, it’s a very, very significant deal. What this means is every Gateway home PC is going to come with broadband home-networking conductivity.
MATHISEN: What does that mean?
NICHOLAS: Well, what is means is you just take your PC, take it home. One thing everyone does when they buy a PC, first they do is they take it home, plug it into the power connection, and they plug it into a phone jack. Except now when you plug it into a phone jack, what you’re going to be doing is provisioning a ten megabit-per-second multimedia network in the home.
So, what does that mean? That means if you’ve got Internet service provided via cable modem or a cable set-top or a DSL service provider, you’ll now connect up to that Internet connection at broadband speed. So that – that computer will instantly be connected to the Internet at ten megabits per second, but, more importantly, for consumer electronics devices.
We’re introducing an entire array of devices that allows this computer to connect to your telephone, to your television, to your stereo. So now you could have a library of movies that’s stored either on your PC or over the Internet. You could watch that on your regular TV that you’ve had—
MATHISEN: You’ve given me a ton to think about—
NICHOLAS: Yeah.
MATHISEN: --I want to interrupt but –
NICHOLAS: Sure.
MATHISEN: --and then sort of come back and piece it back together.
NICHOLAS: Okay.
MATHISEN: Are you saying now that with this device, with this chip, I am going to be able to come home and connect to the Internet at broadband speeds if I basically have a 56k modem and I’m working over basic copper wires?
NICHOLAS: What I’m saying is that if you have any broadband connection – so if you have a cable modem anywhere in your house or a cable set-top and that has a home-networking connection in it, which all the next-generation reference designs that our company develops are all going to have this home-networking technology imbedded in it—
MATHISEN: Or if I have a DSL capability.
NICHOLAS: Or DSL capability.
MATHISEN: But not a regular copper wire. If I’m just going the old-fashioned way, let’s say, this is – this isn’t going to affect that particular—
NICHOLAS: Well, no. There are absolutely no new wires—
MATHISEN: Right.
NICHOLAS: --no new infrastructure required for you to do this. So what you’ll have is you’ll take your PC that you had with a voiceband modem in it. You’ll plug it into the phone jack. It will automatically detect whether there’s a cable modem, whether there’s an [sounds like] ADSL transceiver, whether there’s any kind of broadband connection to the home – and if it’s there, it’ll exploit it. If it’s not, what it will do is provide a broadband connection to – to any of the other appliances in the home.
MATHISEN: All right, so how—
NICHOLAS: So although you may not—
MATHISEN: --any of the other appliances in the home – you’re talking here about my stereo, my television set.
NICHOLAS: Correct.
MATHISEN: Are you also talking about my refrigerator and my toaster and my – and ultimately my – my dishwasher and washer?
NICHOLAS: There’s that potential, absolutely. What we’ve developed is adapters that will connect your television, your stereo and your telephone to this broadband network that will be provisioned by this PC.
MATHISEN: So that ultimately I can – I can download connect and play it right through my television set.
NICHOLAS: Correct. Well, let’s say you’re not fortunate enough to have a cable modem or ADSL or a broadband connection to your home. You just have your slow 56k modem. What you could do is download a movie or a number of, you know, music titles overnight, have them on your hard disk. But now you can play those in real time over this home network.
Now this is – this home network is the same phone foam wiring you have in your house today. So, in other words—
MATHISEN: Right.
NICHOLAS: And the other thing is, this does not in any way interfere with your existing phone service.
MATHISEN: Right.
NICHOLAS: So your existing telephone will ring. Anything that you have plugged into it continues to work. The only thing that you have to do is plug your PC into the phone jack.
MATHISEN: Cool. That sounds really neat. Now, let’s – let’s drop that and move on to the sort of broader business. How is business? Are you seeing any signs of slowing?
NICHOLAS: We are seeing no signs of slowing. Business is – is looking great. We’re very comfortable with the analysts’ estimates for this quarter. And we continue to execute on our business plan. In fact, there’s – we – we just had an earnings conference call. And we just issued a press release. Nothing has happened between now and then—
MATHISEN: Sounds great.
NICHOLAS: --to in any way change – change our outlook—
MATHISEN: Henry, will you come to my house and install all this gear for me?
NICHOLAS: Well, the great thing is, you know, it’s – it’s plug-and-play installation. One of the great things is our partner, Gateway, 90% of America lives within a 20-minute commute to the Gateway Country Stores. You can go there, buy the computer. They can either help you install it—
MATHISEN: Right.
NICHOLAS: --but the best thing is there’s nothing new you have to do. You just take it home, plug it in, turn it on, and plug it into a phone jack, and you’ve now provisioned this multimedia network.
MATHISEN: You’re tempting me.
NICHOLAS: It has to be that –
MATHISEN: You’re tempting me.
NICHOLAS: -- it has to be that simple.
MATHISEN: I’m going to go do it. I’m going to see if it works.
NICHOLAS: Okay.
MATHISEN: All right, Henry, thanks very much.
NICHOLAS: Okay.
MATHISEN: Henry Nicholas, the chairman and CEO of Broadcom.
All right, let’s take a look at what Broadcom shares are doing as well as the other partners in this deal. And you see Broadcom selling off just ever so slightly. Gateway is lower right now as are American Online and TransMeta. |
