01:01 WS WSJ: General Instrument Expected To Select Motorola
By Leslie Cauley
Staff Reporter of The Wall Street Journal
General Instrument Corp. plans to announce Wednesday that it has selected
Motorola Inc. and Quantum Effect Design Inc. to supply microprocessors for its
new advanced digital set-top TV devices, knocking Intel Corp. out of the
running for now.
A third chip maker, Broadcom Corp., which has announced plans to go public
soon, has been picked to supply silicon components that would be used to
transmit movies, Internet and even Internet telephony, said David Robinson,
vice president of General Instrument's digital-network systems unit.
The cable-television industry, led by cable giant Tele-Communications Inc.,
recently announced plans to order as many as 15 million of the new set-top
boxes from General Instrument. To make new digital services available to
consumers on a widescale basis, TCI and others have consistently said that the
boxes themselves must be relatively cheap, $300 or less. To meet that price
point, General Instrument had to drive a hard bargain with suppliers.
Under its arrangement with Motorola and QED, General Instrument will wind up
paying about $10 for each microprocessor, "give or take $5" depending on
functionality, Mr. Robinson said.
He said that price was a major sticking point with Intel. Even so, Mr.
Robinson didn't rule out the possibility that Intel could come back later with
a more modestly priced offering. "They've got a generation's worth of work to
do," Mr. Robinson said. "They tried real hard, but they just weren't in the
league with the other companies."
Intel couldn't be reached for comment last night.
Under the agreement, Motorola will provide the "bread and butter"
microprocessors that control basic functions of the new advanced boxes. QED,
Santa Clara, Calif., will provide the souped-up chips capable of handling more
sophisticated fare, such as Internet telephony and 3-D modeling.
Broadcom, Irvine, Calif., will provide custom chips that facilitate easy
communication between cable modems, set tops and other broadband devices
consumers might use. Broadcom's chips would be the most expensive, about $20
to $40 apiece depending on functionality, Mr. Robinson said.
The first advanced boxes should be available later this year.
(END) DOW JONES NEWS 03-25-98
01:01 AM
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