MUST READ INFORMATION - COMMENTS BY V.P. OF PUBLIC AFFAIRS
Dow Jones News Service - May 3, 1996
Zenith Electronics Corp. (ZE), a company perhaps best known for televisions, has entered the on-line business with TWO new cable modem systems that will enable cable operators to offer their subscribers
access to the Internet.
''The cable community is our customer and we are always looking at new revenue opportunities for it,'' said Albin Moschner, Zenith's president and chief executive. ''Cable companies can now provide things like America Online on their infrastructure as opposed to giving that revenue to the phone companies.''
''Wall Street is enamored with companies that are in the Internet,'' said James Magid, a senior adviser at Needham & Co. ''And this company has been reclassified in the minds of investors as an INTERNET COMPANY RATHER THAN A COLOR TELEVISION COMPANY."
Zenith, however, views its foray into the Internet not as a shift in its business strategy, but as a natural expansion of its core consumer electronics operations.
''Television is still the major focus of our overall business,'' Moschner said, ''Cable-based modems are compatible with our core business. ... I WOULD EXPECT MODEMS TO END UP IN THE TV SETS OF THE FUTURE."
Zenith in fact pioneered cable modems six years ago, Moschner noted, but the business ''hadn't caught on until recently with the growth of the Internet.''
On Monday, Zenith and U.S. Robotics Corp. (USRX) unveiled a new cable modem system that will enable ONE-WAY cable operators to provide high-speed data transmission services, including Internet access.
According to Magid, cable modems enable computers to communicate with the Internet much more quickly than standard telephone modems because cable lines have considerably more bandwidth than phone lines.
Cable modems can therefore handle ''certain data types which cannot run over the phone line because the phone line can't transmit quickly enough,'' Magid said. Such data include photos, sound and moving pictures.
Zenith's cable modems (ONE-WAY) can deliver 4 megabits of data per second and operate up to 400 times faster than phone modems, said John Taylor, Zenith's vice president of public affairs and communications.
Zenith plans to ship the ''telco return cable modem,'' which is based on its HomeWorks Universal cable modems and U.S. Robotics' Total Control Enterprise Network Hub, within 90 days.
One key to Zenith's new telco return system is that it will allow one-way cable operators - that is, operators that transmit signals to set-top boxes inside homes but cannot receive data from subscribers -
to provide Internet access without upgrading to two-way technology.
The modems will enable cable operators to deliver on-line data to customers, who will in turn use a telephone modem to send data back to the Internet.
Zenith, however, is also looking to do business with two-way cable providers.
Two-way cable, which is currently in less than 10% of homes with cable in the country, enables set-top boxes to send signals back to the operator's end to participate in interactive services such as viewer
polling.
Zenith's telco return cable modems can be upgraded to two-way capability. And the company on Tuesday unveiled an even-faster end-to-end platform that will enable two-way cable operators to
provide ultrahigh-speed, two-way data delivery. (I HAVE THIS READY TO GO!!!)
The system, based on Zenith's ultrahigh-speed cable modems, will be able to deliver up to 40 megabits of data per second and operate as much as 1,500 times faster than telephone-based modems, Zenith's
Taylor said.
Such two-way modem technology has applications ranging from home shopping to real-time, world-wide video conferencing, said Stuart Bockler, president of International Market Call in Morganville, N.J.
''This is a platform for a real global dissemination of information,'' he added. ''We are now in the age of the Jetsons.''
Zenith Chief Executive Moschner in fact envisions a day when television sets, like computers that are on-line, will have their own unique address and offer customers personalized services.
And, he stressed, cable modems will make this interactivity possible.
''We see interactivity becoming more video-based and this will require considerably more bandwidth,'' Moschner said. ''The phone lines are a constraint.''
Zenith's cable modem platform will combine the public networks software based on Microsoft Corp.'s (MSFT) Windows NT server network operating system and Cisco Systems Inc.'s (CSCO) internetworking software, switching equipment and routers.
Zenith plans to begin testing the platform later in the year, Taylor said. |
