Software and hardware will be announced over the next few months..................................
usatoday.com
12/18/97- Updated 10:17 AM ET
Cable industry steps up tech push
NEW YORK - The cable industry took a giant step Wednesday toward providing subscribers with a dazzling array of interactive services for TV, personal computers and phones.
Tele-Communications Inc. led a consortium of cable operators representing about half of the industry in a deal to buy about 15 million digital set-top boxes over the next five years from General Instrument.
The $4.5 billion order is for boxes that - at $300 apiece - will include computer processors and memory. That will enable them to handle a variety of video and audio services, including high-speed Internet access, phone calls, e-mail, games, sophisticated on-screen programming guides, electronic shopping and banking.
But talks continue over how much power the boxes will have and what companies will provide hardware and software. Intel, Oracle and Microsoft are known to be talking with TCI and others. "We can anticipate a series of announcements in the upcoming months as those specific relationships are established," TCI chief John Malone said.
The deal fundamentally changes GI, which has restored the moniker it abandoned this year when it was renamed NextLevel Systems.
The company agreed to grant warrants to the cable box buyers - including Comcast, Cox, Time Warner and InterMedia Partners - enabling them to acquire 16% of GI. TCI will swap part of a digital programming transmission service, called Headend in the Sky (HITS), to GI for an extra 10%. Shares of GI/NextLevel rose 2 11/16 to $17 11/16.
While the deal solidifies GI's dominance in the cable box manufacturing business, it could also help rivals - such as Scientific-Atlanta - as demand grows. The new boxes will be built around open standards to work on any cable system.
"We still don't know how this will be financed, but we're seeing an active drive to put intelligence in the TV," says analyst Kenneth Goldman of EnterMedia Growth Partners. "The industry believes there's a large market for these services."
By David Lieberman, USA TODAY |
