Sony's year 2000 box has a cable modem???????????????
"We have certain technologies, including what we call a home network architecture, that we'll be talking to NextLevel about possibly incorporating into future digital cable TV devices," Clancy said. This home network would be "the kind of operating software that would enable all of the components in the home to communicate effectively and easily with one another," he added.
GI Goes Retail With Sony Corp.
By Jim Barthold
General Instrument Corp. took a big step toward an eventual retail presence last week when it announced it would form a "strategic alliance" with Sony Corp. that could bring DVD and game station technology to new digital set-tops.
As a major ingredient of the long-rumored agreement, Sony plans to buy 7.5 million new shares of GI common stock, about 5% of the company, at $25 per share, which translates to $188 million. GI already plans to sell 20% of the company to Tele-Communications Inc. and its partner companies, and another 6% to other industry MSOs in exchange for a 15-million digital box order a month ago.
"We made a commitment to the industry, and especially in that last go-around when we got all the digital orders, that we would get a name consumer electronics partner. It wasn't a contractual agreement, but we made a gentlemen's agreement with the industry that we would have a player like this involved and here it is," said Ed Breen, GI's chairman-CEO.
The partnership and Sony's move into the cable industry is part of the consumer electronic giant's overall digital strategy, a company spokesman said.
"Sony has a broad view of both technology convergence of audio, video, computing and communications and also the whole digital television issue," said spokesman Rick Clancy. "The dominant delivery system for television in American households is cable."
Clancy said Sony's interests are simple: use as many of its consumer electronics components as possible in the cable network.
"We have certain technologies, including what we call a home network architecture, that we'll be talking to NextLevel about possibly incorporating into future digital cable TV devices," Clancy said. This home network would be "the kind of operating software that would enable all of the components in the home to communicate effectively and easily with one another," he added.
Operating system
Sony's operating system won't preclude GI from using other software in its boxes, Breen said.
"The door is open for any kind of discussion. I will say we picked our consumer electronics partner, but that doesn't mean we don't have other software, PC-type partners," he said, alluding to Microsoft Corp.'s well-known desire to have its operating system included in future digital set-tops.
"The operating system is going to be contingent on what the different cable industry players want to use and we will download it into the box," he said. "I'm independent of that. As far as an operating system, my commitment to the industry is to be able to have a flexible platform that's downloadable for anybody's operating system."
Overall, Breen said, Sony brings "the number one retail name in the world" to GI, with a portfolio of products that ranges from DVD [digital versatile disk] players to movies to video games via its PlayStation technology.
"We have a lot of capability with a player like that to integrate additional features and functionality into the next generation of set-tops," Breen continued.
Industry reaction was generally lukewarm, perhaps because the GI-Sony deal was rumored for weeks.
Robert Van Orden, director of digital video systems for Scientific-Atlanta Inc., called the partnership "almost a me-too announcement."
"It's something we did about a year ago," he said. "We have partnerships with Pioneer and Toshiba."
Van Orden said that although those relationships initially will follow traditional cable channels of selling to operators then leasing to consumers, "the future is to be ready for retail when that becomes important in the market." The three companies have a 1-million set-top unit commitment from Time Warner Cable for digital set-tops and should start delivering product early this year, Van Orden pointed out.
Hal Krisbergh, chairman-CEO of WorldGate Communications Inc., was upbeat about the announcement, despite the fact that Sony builds boxes for WebTV, a potential WorldGate competitor in the retail market. Krisbergh said he didn't see the Sony investment infringing on his relationship with GI which has, in turn, an investment in WorldGate.
"One needs to see 5% as 5%," he pointed out. "This is not a controlling interest. In effect, it's a guy who wants to be in the box seats and understand what's going to happen here, and, if he wants to do retail, at least he knows the players."
Neither GI nor Sony could specify a time when the details of the partnership would be completed.
(January 12, 1998) |
