The full text below: Now ask yourself, can a P2 or 3 Get or send your email and surf or download some porn video for example while you're decoding MPEG2? Quite a chip if it can.
update Intel (INTC) will attack digital TV on a broad front, one of the next big markets for its products as the chip giant expands its technological horizons.
The company detailed plans today to build the core components for TV set-top computers and personal computers with digital TV capabilities.
Intel also demonstrated prototypes of a variety of products, including software such as browsers that would run on these products, and hinted at possible deals with companies such as NCI, an Oracle subsidiary that has developed software for set-top devices, and WebTV, a major supplier of set-top boxes.
The chipmaker is attempting to extend to the digital TV arena its remarkably successful business model in the PC industry, where it supplies the core hardware components to almost all PC vendors large and small worldwide.
"There could be as many 25 million [digital] set-top boxes in 1999. The way things are going, Intel could have most of that market," said Richard F. Doherty, director of The Envisioneering Group, a marketing research firm based in Seaford, New York.
"Intel has a major impact just because they're Intel and they're working to make sure they have an impact," said Larry Gerbrandt, a senior analyst at Paul Kagan Associates in Carmel, California. "It is staying at the locus of the convergence," he added, referring to the ongoing convergence of computer technology and consumer electronics technology into one hybrid device.
Gerbrandt agrees that the market potential is huge. "[A total of] 230 million TVs eventually have to be replaced. This a business targeting 100 percent of the homes [in the United States] vs. 40 percent of the homes [with personal computers]. Which would you choose?" he quipped.
"TV sets are nothing more than screens, really. The action is in the set-top box," added Gerbrandt.
A set-top box--or set-top computer as Intel defines it--hooks up to a TV and allows it take on computer features and applications such as email, basic word processing, data storage, and Web surfing. For end users, this means an enhanced interface on their TV that allows them to hop, for instance, from a Microsoft Windows "channel" to an electronic program guide, then to electronic mail, the Internet, and then back to TV viewing.
Intel showed a prototype set-top computer today with browser software from NCI. A sample interface consisted of an electronic channel guide taking up most of the screen, with an email option in a corner of the screen. A small box in another corner of the screen was running a TV program and there was a "floating" pull-down menu for options such as switching to the Internet. In some devices, a Windows channel brings you to a Windows 95-like interface.
Doherty said that a future version of the Pentium II processor would be cheap enough for a consumer device priced between $300 and $500, a price point that Intel executives also threw out today.
In 1998, because of the Pentium II, Intel will be able to offer enough processing power in these devices to allow support for both standard TV broadcasting, referred to as interlaced technology, and the progressive format that personal computers use, added Doherty. This had been bone of contention with the TV industry, which did not want to switch to the progressive format, but this apparently has been resolved.
Intel's most powerful processor architecture will also let set-top computers to process all the essential multimedia data streams. This includes full-motion video based on the MPEG-2 standard, decryption, and advanced audio, according to Mike Aymar, vice president and general manager of the consumer products group at Intel. With older, less powerful processors, additional hardware was needed, and that added to the cost.
Doherty noted that the Intel set-top computer is a way for people to get digital TV without spending thousands of dollars on a new, digital-ready set.
The profit margins for Intel on these set-top devices would be lower than those for PCs, which presents a challenge for Intel and the vendors that use its components. However, the volumes are expected to be high enough to justify the investment in the market, analysts said.
The lack of content is still a major sticking point and may be for some time as the digital TV transition takes place, but efforts are well under way. Directv, the largest satellite broadcaster in North America, has plans for high-definition (HD) digital broadcasts. Digital content is also planned by CNN and other broadcasters, according to Doherty. Intel also discussed projects with PBS and Nickelodeon.
There is a long list of potential customers for Intel ready-made products and components in this area, Doherty said. Compaq, Gateway 2000, and Dell Computer could offer set-top computers as a new product line, since two of these companies--Compaq and Gateway--already offer PC-TVs.
These PC-TVs are currently expensive at well over $3,000. Not surprisingly, they have not been a hit with consumers. "It's going to take longer for PC-TV to move into the living room. The set-top box will move more quickly," said Intel's Aymar.
Sony is also a likely candidate since it could offer other set-top computer products when the Windows CE operating system becomes available for this market, noted Doherty. The company already has a comfortable relationship with Intel in PCs, for which the chipmaker supplies components such as the main PC circuit board, he added. Other vendors offering products may include Sharp and Panasonic.
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