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Technology Stocks : C-Cube -- Ignore unavailable to you. Want to Upgrade?

To: Black-Scholes who wrote (42647)	7/7/1999 6:00:00 PM
From: BillyG	Read Replies (1) \| Respond to of 50808

Intel's STB Dreams Come True (A 166MHz Pentium MMX cannot do MPEG-2 decoding. The STB must use an outboard decoder chip to decode MPEG-2 data streams.) From Electronic News--July 5, 1999 By Peter Brown San Jose--Intel Corp. last week signed an agreement with Hughes Network Systems Inc. (HNS) to develop a wide range of digital set-top boxes (STBs) based on Intel architecture microprocessors. The move is one of the first realizations in the market that Intel's PC-oriented microprocessors will be used in lucrative new digital consumer products. Intel will use its Pentium 166MHz MMX processors along with Hughes' DirecTV satellite television service as the standard platform for the STBs. The first product as a result of the collaboration will be an America Online (AOL) TV box that will bring interactivity and 200 plus channels of digital satellite television through DirecTV to satellite subscribers. This is not the same broadband STB by AOL that will include National Semiconductor's MediaGX processor, but it will offer the same AOL service. Intel said it would be selling the Pentium 166MHz devices for $50 in 1,000s, well above the price for 32-bit microprocessors in other satellite set-top boxes. However, according to an Intel spokeswoman, the company plans to reduce the price in the next few months as well as to move to higher performance processors. But in the meantime, it will be hard for Intel to compete and hard for HNS to deliver STBs that will be at a good consumer price point. Intel will try to hit consumer price points by 200, the spokeswoman said. "This signals that Intel may be willing to make some price concessions to get into the STB market," said Gerry Kaufhold, principal analyst at Cahners In-Stat Group, Scottsdale, Ariz. This answers one of the big questions regarding Intel's entry into the STB market, Kaufhold said, namely would the semiconductor giant be willing to drive the processors down to a low-price point where consumers would actually consider buying the box? Kaufhold noted that Intel's real goal in the consumer market is to penetrate those households that don't have a PC. "This is Intel's Trojan Horse," he said. "I'm sure there will be an 'Intel Inside' label on the set-top and that will give Intel a brand name that they hope will translate to consumers buying PCs who don't already have one." In order to assist its move to STBs, Intel has also taken equity stakes in two companies with technologies that may work with the AOL TV box when it hits the market. InfoGear Technology Corp., Redwood City, Calif., is making devices that will allow other applications to connect to the Internet. Intel has invested $12 million in the small company. SkyStream Corp., Mountain View, Calif., which is making devices to enable digital data content and Internet data to be sent together in a broadcast signal to be viewed on TVs, also received money from Intel but those terms were undisclosed. In related news, Advanced Micro Devices Inc. (AMD), Sunnyvale, Calif., today is unveiling its embedded K6-2E processor with 3Dnow! technology, superscalar MMX, and 100MHz frontside bus support. AMD plans to use the x86 embedded processors for information appliances, single-board computers, and networking equipment. Whether the embedded K6-E2 will be used for digital STBs or other digital television applications is unknown. AMD's 300-, 266-, and 233MHz K6-2E processors are priced at $59, $56 and $55 in 1,000 unit quantities.