NLV -- order a pizza from your settop box. Technology for advanced living......................
biz.yahoo.com
Wednesday December 17, 8:53 pm Eastern Time
NextLevel to build new generation of set-top boxes
By Nigel Hunt
CHICAGO, Dec 17 (Reuters) - NextLevel Systems Inc. (NYSE:NLV - news) said Wednesday it
signed an agreement worth at least $4.5 billion to supply a new generation of set-top boxes to cable
television operators, including industry giant Tele-Communications Inc [Nasdaq:LBTYA -
news].(Nasdaq:TCOMA - news)
Chicago-based NextLevel said the agreement was to supply nine cable system operators with at
least 15 million advanced digital set-top devices over the next three to five years.
TCI spokeswoman LaRae Marsik said users would be able to take advantage of functions like
electronic mail via their television and conduct push-button commercial transactions.
''If you see a commercial for Pizza Hut, maybe you push a button on your remote control that lets
you order a pizza,'' Marsik said.
Negotiations on who will supply the components which will be placed in the boxes are already under
way. Intel Corp. (Nasdaq:INTC - news) confirmed this week that it was talking to TCI about at
least providing its microprocessors.
''Silicon Valley will now play a critical role in the development of what we used to call the cable
industry,'' Time Warner Inc. (NYSE:TWX - news) Chairman Gerald Levin told reporters
Wednesday prior to a Chicago speaking engagement.
NextLevel also said it was changing its name to General Instrument Corp. NextLevel was one of
three companies that emerged from the strategic reorganization of the original General Instrument.
''No matter who wins the technology wars, that box on top of the set is going to be General
Instrument's (NextLevel's),'' said Louis Ehrenkrantz, president of New York brokerage Ehrenkrantz
King Nussbaum.
Engelwood, Colo.-based TCI and affiliated companies will buy 6.5 million to 11.9 million devices
over the next three to five years, TCI said. TCI alone has 14.3 million customers.
As part of the deal, cable operators are to receive warrants to purchase about 16 percent of
NextLevel at a price of about $15 per share. The warrants will vest only as set-top orders are
actually shipped in 1998 to 2000.
NextLevel also announced it plans to acquire the digital transport and authorization functions of
TCI's Headend in the Sky group in exchange for about 10 percent of NextLevel's equity. The group
is a package of digital cable channels.
NextLevel said it will handle authorizing distribution of the package to cable systems.
NextLevel shares rose on the news, reaching a peak of $18.19, a climb of more than 20 percent
from Tuesday's close of 15. It closed Wednesday at $17.69, up $2.69. |
