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Technology Stocks : C-Cube
CUBE 35.87-1.2%3:59 PM EST

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To: J Fieb who wrote (37565)12/2/1998 9:29:00 AM
From: BillyG  Read Replies (1) of 50808
 
Set-top giants eye home networking
news.com

By Brooke Crothers and Stephanie Miles
Staff Writers, CNET News.com
December 2, 1998, 4:00 a.m. PT

Two of the TV set-top computer industry's biggest companies are trying to lay the
groundwork for their technologies to rest at the center of future digital living.

At the Western Cable Show today, General Instrument (GI) and Scientific-Atlanta (SA), the
two leading cable TV set-top box suppliers, announced they are developing devices
capable of becoming the hubs that will connect a variety of forthcoming digital home
devices.

Such "home networking" is expected to become a hotbed of product development in the
next few years, as consumer electronics products go digital and become capable of talking
to other household devices, including personal computers. The market is also being
targeted by computer makers such as IBM and Compaq.

Sony too is keen on gaining an early foothold in this market, as evidenced by yesterday's
announcement that it is taking a larger equity stake in General Instrument, purchasing 7.5
million new shares for $187.5 million.

As part of the agreement, GI will license Sony's home networking software (including its
Aperios operating system) for use in GI's DCT 5000+ digital set-top boxes, which GI will
offer to cable operators. GI said it will also promote Sony's home networking software as a
way to implement a "plug and play" connection scheme for digital devices referred to as
1394.

Sony already sells devices such as digital cameras and its Vaio personal computers with
1394 connectors. Compaq too has begun to sell consumer PCs with a 1394 connector.
1394 technology, which Sony calls i.LINK, could enable a TV set-top computer to
exchange data with ("talk to") digital camcorders, PCs, DVD players, and other digital
devices.

Advanced digital set-top boxes will further provide high-speed cable-based connections to
the Internet, interactive TV, and PC-like features such as advanced graphics chips which
allow for more sophisticated interfaces.

Though a large market for home digital device-based networks is by no means guaranteed,
analysts see potential. In a recent report, Forrester Research envisioned a central home
device emerging.

"Surf the Net or watch TV? With [interactive TV], consumers can do both. Build a camera
into the cable box and the TV becomes a videophone link as well, drawing time away from
telephones. As PC usage fragments among multiple computing devices...the interactive TV
will reassert itself as the central entertainment, communications, and information appliance
in consumers' homes," according to the report.

Separately at the Western Cable Show, SA and Avio Digital detailed plans for SA's
Explorer 2000 digital set-top box, which hooks up to Avio's MediaWire home network.

The Explorer 2000 is one of the first digital set-top boxes
designed to offer two-way communications with interactive
applications, Internet support, video-on-demand, home
shopping, and IP technology. SA distributes the set-top
through 14 cable service providers in the United States and
Canada, including Time-Warner and TCI.

Using Avio Digital's MediaWire, the Explorer 2000 set-top
box will act as an interface for connected home theater
components, PC networks, home security devices, and
consumer electronics via existing copper telephone wiring at
up to 88 million bits per second, according to the companies.

"It is becoming evident in the industry that within a few years,
we will have in-home networks linking all manner of digital devices in the home," said Dr.
Allen Ecker, president of Scientific-Atlanta's subscriber network sector, in a statement
from the show.

"Digital interactive set-tops are the ideal focal point to allow in-home networks to connect
to the outside world via the cable system," he added.
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