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Technology Stocks : LSI Corporation

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To: Duane L. Olson who wrote (8843)1/6/1998 10:35:00 PM
From: Sean White  Read Replies (1) of 25814
 
ALL: Just found this one on Digital Cable from today

Digital Cable: Concept Proved, Suitors Line Up
By Peter Lambert
January 6, 1998 12:15pm
Inter@ctive Week

zdii.com

Digital TV

If the new cable industry's high-speed ISP pretensions look promising to computer and telecommunications industry investors, so do its broadband digital television prospects.

"Everywhere I go, computer companies are looking at TV," says Brian Roberts, chairman of Comcast. "It's on seven hours a day, and the over-arching vision in Silicon Valley is the need for more hours of use of its technology and services per day. The PC is not for everybody; the TV is."

Or as TCI's Hindery puts it: "Silicon Valley is living in a world of 30 million homes with PCs. Our world of 250 million TV sets is so much larger that they want to play in it."

To let the computer industry play, cable operators have put their OpenCable standards definition project on a "fast track." Indeed, other operators can "piggyback" on a new TCI effort to negotiate a multiple-operator purchase of 5 million to 10 million OpenCable-compliant terminals.

TCI expects responses from a dozen or so computer and consumer electronics companies before year's end, and anticipates choosing one or two vendors, Malone says.

"We need to assure the consumer electronics community of at least one very large purchase order so they can justify very daunting, expensive silicon engineering," he says.

The set-top terminal purchase would represent the operators' willingness "to engage in some subsidization to help drive consumer electronics development, and that's big bait for those guys," Malone says.

He insists the unit volumes are not arbitrary. An order of 5 million boxes would represent about 30 percent of cable subscribers directly controlled by TCI. An order of 10 million boxes would translate to 25 percent of subscribers indirectly controlled by TCI and its Headend in the Sky digital TV service. The 25 percent to 30 percent range is comparable to pay channel subscriptions now.

Malone says TCI's own 140-page specification request complies with OpenCable and pushes toward a "Cadillac" version, including a 200-MIPS (million instructions per second) central processor -- fast enough to accommodate Microsoft's "rather hefty WebTV-slash-Windows CE" software.

Microsoft "would bring tremendous support of applications development, [so the] design cannot be about blocking Microsoft's participation," Malone says. At the same time, he adds, TCI, like OpenCable, will insist on support of multiple operating systems.

"There are big advantages to a single operating system, and OpenCable may evolve to something de facto, but I don't want to be in a world where any one vendor has an unfair proprietary hook. That's not an anti-Microsoft position; it's enlightened self-interest," he says.

Source: Inter@ctive Week
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