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Technology Stocks : C-Cube
CUBE 36.96-2.0%Nov 6 3:59 PM EST

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To: Tim Michaels who started this subject1/8/2001 1:11:28 PM
From: DiViT  Read Replies (1) of 50808
 
Do-it-all home entertainment box offers hope to cluttered living rooms
Benny Evangelista
Chronicle Staff Writer
01/08/2001 The San Francisco Chronicle
(Copyright 2001)


The growing number of home entertainment devices available these days is creating indoor skyscrapers.
That's because a modern home might have a digital cable TV box stacked on top of a DVD player atop a personal video recorder atop a VCR atop the television. And in the next stack would be the stereo receiver atop the CD changer and the cassette player.

But at this year's Consumer Electronics Show, the talk is about how to prevent the Manhattanization of the living room. New products and devices being unveiled promise to reduce the stacks into one do- it-all, Web-connected, home entertainment and information network box.
Like central heating, "it will be a central media server," said Umesh Padval, president and chief executive of C-Cube Microsystems Inc.

On Saturday, C-Cube introduced the DoMiNo chip, which the Milpitas chipmaker calls a revolutionary new microprocessor designed to be the brains of that all-powerful video-audio-Internet entertainment center.

Naturally, C-Cube would like to see a "DoMiNo effect" that is more than just an obvious marketing slogan. After all, the company has spent $150 million in seven years developing the chip.

The DoMiNo, short for "Digital Media Networks," is designed to process all formats of digital video and audio in use today. Thus, it can process multiple streams of different signals used for DVD, MP3, HDTV, satellite TV, data streams and home wireless networks.

In the short term, that should help bring down the cost of new products such as recordable DVDs, Padval said, noting that C-Cube's current list of customers includes consumer electronics-makers Panasonic, Philips, Samsung, Nokia and Pioneer.

Further down the road, he envisions a day when the chip is the central brain of an entertainment gateway device connecting the home with high-speed Internet access.

Movies and songs would come into the home through the gateway, be processed and sent out to several video screens. Moreover, the device would be able to store and record programs on a hard drive, handle video-on-demand movies, video games and digital satellite programming and link to phones and other home appliances.

And the consumer can surf through several channels of this entertainment at once while downloading songs from whatever form of Napster appears in the future.

"We believe our DoMiNo will be at the heart of this broadband gateway," Padval said. "This will change the world over the next five to 10 years."

Of course, only time will tell if the DoMiNo has any effect at all. Analyst Larry Gerbrandt isn't ready to call the DoMiNo the "Rosetta stone" of technology, but said C-Cube may be on the right path.

"I don't know if it's the Rosetta chip, but it's definitely a step in the right direction, at least in terms of making devices smaller and more efficient and less costly," said Gerbrandt, senior analyst with Paul Kagan Associates Inc., a Carmel media research and consulting firm.

The chip could lop $50 to $100 off the price of digital set-top boxes, he said, which could mean the difference between a new device moving from niche product to mass market item.

The idea of an entertainment server isn't far off, he said. The popularity of Napster has helped demonstrate the concept of storing music collections more efficiently -- in digital form, rather than on plastic CDs or albums -- Gerbrandt said.

Now, companies such as Blockbuster and Enron are experimenting with beaming movies, or video on demand, online to consumers, bypassing traditional retailers, he said.

"By the end of 2001, we'll start to see a lot of momentum toward entertainment server devices, although it's probably three years off from it being a mass market item," Gerbrandt said.

C-Cube's vision of the future is correct and very compelling, said Jay Srivatsa, a consumer electronics analyst for Gartner Dataquest.

Yet C-Cube has jumped out in front of a market that will still take several years to become profitable, Srivatsa said. In the meantime, C-Cube competitors such as ST Microelectronics and LSI Logic "are not going to be sitting still."

"When the market takes off, they will be there also," Srivatsa said.

Meanwhile, Mountain View's TeraLogic Inc. demonstrated its Cougar chip set, which will be used in a new set-top box made by Samsung Electronics that can tune in digital TV signals for standard analog TV sets.

"The conversion of broadcast networks from analog to digital, that's what's causing excitement, with people saying, 'Aha, there's a real revolution happening here,' " said Jon Castor, chief executive officer of TeraLogic, a maker of integrated circuits and software for digital TV.

The Cougar bridges the gap between the 1.4 billion analog TVs in the world today and digital TV, a higher resolution format that still requires sets that are priced out of the range of most consumers.

But Castor said the device is part of the overall march to that digital entertainment box.

"Everybody's got the same target, which is, 'Let's build this fully functional media server.' Everybody's marching in the same direction, but everybody's coming from a different point," Castor said. "There's this plethora of handheld and mobile products that are going to plug somehow into a home media gateway."

Another example is TV4Me, made by Keen Personal Media Inc., a subsidiary of hard-drive-maker Western Digital Corp. of Lake Forest (Orange County).

TV4Me is a personal video recorder that, like TiVo and ReplayTV, records TV programs in digital form on an internal hard disk for later viewing. Keen has an agreement with set-top boxmaker Scientific- Atlanta to combine TV4Me with digital cable TV boxes.

"In several years, it's possible to have a terabyte server in your closet," said Greg Kalso, Keen PM's marketing director. "I have racks and racks of analog VHS tapes, DVD and CD. I'd like to migrate them over to a home server right now."
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