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Technology Stocks : Gemstar Intl (GMST) -- Ignore unavailable to you. Want to Upgrade?

To: drew_m who wrote (4330)	11/27/2000 8:56:59 AM
From: NY Stew	Read Replies (2) \| Respond to of 6516

November 27, 2000 The Struggles Over E-Books Abound By DAVID D. KIRKPATRICK nytimes.com Henry Yuen, founder and chairman of Gemstar, has a different plan. Unlike his rivals, his company holds patents on the technology to read digital books on specialized hand-held devices. Mr. Yuen is betting that these devices, easily portable with lower prices and high-quality screens, will appeal to consumers more than expensive personal computers or small personal digital assistants. But Gemstar's devices are not cheap yet. The latest generation, built under the RCA brand by Thomson Multimedia, is appearing in electronics stores this week at the lofty price of about $300. Mr. Yuen's pitch to publishers preys on their fears about Internet hackers. "The reality of the matter is that you cannot put things on the Internet — I don't care how strong the encryption scheme, it is going to be broken one way or the other," he said. Gemstar's system avoids both personal computers and the Internet all together. Online bookstores sell electronic books for Gemstar's format, but to download the digital texts consumers need to plug their hand- held devices into phone lines and dial directly into Gemstar's central computer servers. As exclusive distributor of electronic books for its format, Gemstar will collect a hefty 15 to 20 percent fee on each sale. Gemstar's system also means that users of the devices will store and retrieve all their books on Gemstar's computer server. Mr. Yuen hopes to sell advertising they will see while they are there, and Gemstar may sell them electronic books directly, too. He plans to enable them to shop through his devices by downloading catalogs, making a commission on each sale. Eventually, Mr. Yuen envisions devices built with Gemstar's electronic book reading patents to blossom into personal organizers, wireless pagers and phones and generalized portable entertainment devices for text, video and sound. "I would like this particular well-documented habit — reading — to be my entry into the consumer mobile-device arena," Mr. Yuen said.