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To: BillyG who wrote (46208)	10/18/1999 5:40:00 PM
From: John Rieman	Read Replies (1) \| Respond to of 50808

Intel, Nokia deal is about a powerful CPU................... multichannel.com Intel, Nokia Ink Open-Source Set-Top Deal By BILL MENEZES October 18, 1999 Intel Corp. has stepped up its expansion into the interactive digital set-top-box silicon market through a new development agreement with Finnish powerhouse Nokia Corp. Intel has already announced other set-top development deals under its Home Products Group's strategy for porting the multimedia and Internet-access capabilities of its semiconductor architecture to non-PC devices, ranging from televisions to automobile accessories. But the Nokia agreement marks Intel's biggest foray yet, due not only to the Finnish company's existing set-top footprint in Europe but also its ambitions for expanding into new markets --- including the U.S. -- for cable, satellite and terrestrial-broadcast business. "It's a global market, not just European," said Helmut Stein, chief technical officer for Nokia Multimedia Terminals. "There are discussions ongoing in the United States" with potential customers. Nokia, the world's largest wireless-phone maker, boasts a multimedia set-top business that has deployed about 4 million digital-cable, satellite and terrestrial-broadcasting boxes, largely in Europe. It plans to create a set-top -- available in the second half of next year -- built around Intel's powerful Celeron or Pentium processors and using software based on freely available "open-source" systems including the Linux operating system and Mozilla Web browser. Pentium-class chips running at clock speeds of 266 megahertz and higher pack a wallop that Nokia believes is necessary to support the applications its box will eventually allow operators to offer. These include Web browsing; interactive video; recording or time-shifting programming to digital hard drives; electronic mail; and interactive program guides. "The need for processing power and software is moving and growing all the time," Stein said. "For a terminal to access these open standards and applications we need a processor that's not far away from a laptop processor." Stein would not give specific possible configurations for such a box's memory requirements. But he indicated that the set-top would require flash memory and dynamic RAM "similar to a laptop," most of which now ship with 32 or more megabytes of RAM. The new box also will support content based on the Advanced Television Enhancement Forum, the consortium of electronics, broadcasting and computer companies led by Intel and supported by Nokia. ATVEF is a royalty-free specification based on open standards meant to enable developers to write content once for operation on multiple different platforms, a rival to TV platforms such as that of Microsoft Corp. Intel also is developing open source-based set-top and server solutions for Pacific Century Cyberworks' deployment of broadband-video and Internet services in Asia. In its other big set-top deal so far, Intel will build direct-broadcast-satellite receivers for Hughes Network Systems that support the planned online television service of DirecTV Inc. and America Online Inc., which will not be based on open-source software. While Intel said it is operating-system agnostic, some customers see the open-source model as more flexible and better at fostering innovation than vendor-driven, proprietary solutions. "Over time we want to standardize that in a standard product offering from Intel, which we hope to launch at a later date," said Marta Hassler, marketing director for the Home Products Group. Although the Nokia deal focuses on Europe, both companies say their use of open-source code for key elements such as the operating system will speed time to market in other lucrative regions, such as Asia and North America. "As it is built on global standards, it's a global product," Stein said. "If you have Java or HTML, you can write applications everywhere in the world." Another advantage could be cost. According to Paul Kagan Associates, AT&T Broadband & Internet Services Inc. agreed to pay Microsoft $12 per copy for the up to 10 million set-tops in which it will run the Windows CE operating system. AT&T also will pay $2 per subscriber annually for maintenance and another 75 cents per sub each month for "server-access fees," according to senior analyst Leslie Ellis. While Linux products are not "free" -- only its source code is available at no cost -- analysts say devices that run a Linux-based OS still could be significantly cheaper than those licensing proprietary systems such as WinCE. "In a consumer-priced arena, you can't afford to have that high a set-top component in a retail market," said Richard Doherty, analyst at market-research firm the Envisioneering Group. Stein said Nokia has demonstrated Linux-based terminals but would work with Intel to adapt the OS further for the television-oriented platform. Several other manufacturers already are using Linux in their multimedia appliances, including TiVo Inc. for its TV-recording device and NetGame SA for its European cable-TV set-top that also incorporates a standards-based cable modem for Internet access. Doherty said the Nokia venture is further indication that Intel believes it has strong solutions ready for the consumer set-top market, which should soon include set-top makers for the U.S. market. "That system doesn't freeze," Doherty said of the Linux OS. "Once it's been proven, there are others who can do it cheaper and faster. And there are already dozens of companies making sure that the Intel architecture works in a consumer environment." Nokia's choice of Linux for the set-top is a continuation of a strategy that has shunned Windows CE for "thin" computing devices. Nokia last week said it would use 3Com Corp.'s Palm Computing operating system interface and applications for smart phones and other products that will use the EPOC OS for handheld devices being developed by the Symbian joint venture.