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Technology Stocks : The New QLogic (ANCR) -- Ignore unavailable to you. Want to Upgrade?

To: George Dawson who wrote (13029)	12/9/1997 10:46:00 PM
From: J Fieb	Read Replies (1) \| Respond to of 29386

George, Here is a peice about how Tektronix is moving up their digital conversion. With all the FC info on their site, we know that they'll want a good one. Grass Valley Joins Digital TV World By Peter Brown Beaverton, Ore.--TektronixOs Grass Valley product group is transitioning--moving its product development completely away from analog technologies and primarily focusing on digital video broadcast technologies, including a move into digital television (DTV). Last week, Tektronix, a $1.94 billion company last year, said it would begin investing heavily in the group, spending multiple millions of dollars on engineering resources and the retrofit of Grass ValleyOs manufacturing facility. In addition, Grass Valley will discontinue a majority of its older analog product lines to make way for these new digital video products. In 1996, during a Breakfast in the Valley interview, Tektronix president and CEO Jerry Meyer said the company had started the post-production on analog to digital conversion, however, he felt the digital revolution would take approximately 15 years before there was a total convergence (EN, Sept. 2, 1996). Mr. Meyer blamed this long period on resistance from the broadcast community to change its routers and switchers from traditional analog technology. Clearly he has changed his mind now. "There are a few reasons for the change. One of the biggest is the changing market conditions from analog to digital technology. Also our analog products continue to decline slowly in sales which suggests the need for a change to digital," said Larry Neitling, VP and GM of the Grass Valley group. "In the past, Grass Valley products have been looked at as the gold standard of the industry for whatOs happening thatOs new in the industry. We need to make sure that continues and we are out defining products in the industry rather than following products." Areas To Focus On ------------------------------------------------------------------------ One of the main areas that Tektronix will be focusing on is the digital television and high definition television (HDTV) arena--a new market for the company. DTV has started to create interest in the consumer electronics market and some industry observers already feel it might be too late for a new arrival in the market. Not so, says Mr. Neitling. He argues that the competitiveness of HDTV and DTV applications has been mostly limited to chip companies thus far. "In the broadcast area, there are only a few products that meet the needs for switchers, masters and routers for HDTV," he said. "Yes there are some products out there now but we need to advance these product offerings to meet the needs of our customersANCR you are tslking to these guys aren't you?. The market where we are targeting is very open and not as competitive as you might think. So I believe we are making the correct transition at the right time." Tektronix is also looking at other aspects of the digital video marketplace for investment, perhaps even developing products for the emerging DVD and satellite set-top box (STB) market. Grass Valley will not develop any of its own chips for any of its digital video broadcast products including DTV. The company wonOt say whose chips it will use for its digital products or who it might be in discussion with for digital devices. Included in the Grass Valley reorganization is the discontinuation of older analog products including the companyOs 110 production switcher and M21 master control. The company has issued an end-of-life program including last time buys for these analog products through December until the end of January with final shipments to run through February of 1998. Effective immediately, Tektronix is increasing the number of engineers at Grass Valley by 20 and combined with 6 positions already available, the company is expanding in the right areas, Mr. Neitling commented. This amounts to somewhere in the range of $5 to $10 million being spent on engineering resources alone, he added. In addition, Tektronix will spend similar kinds of money on redesigning and refitting Grass ValleyOs manufacturing facility. "We are essentially starting over in the same building with new equipment and a new product focus," said Mr. Neitling. "We are going into this making the assumption that we have never built one of these digital facilities before and we have to find out the best way to do it that is cost effective. It is going to be a whole new approach for the company and how we build our products, so it should be interesting for everyone." Schedule Mapped Out ------------------------------------------------------------------------ Grass Valley is scheduled to have all of its changes complete by end of the fiscal year in May 1998. "We have a staged time line, including moving out the old products and bringing in the new ones before the end of May," said Mr. Neitling. "We should have some interesting product introductions during the 1998 National Association of Broadcasters (NAB) show and be in full production with most of those products shortly thereafter." TektronixOs strategy for migration to digital systems and HDTV will be announced at NAB also. TektronixOs digital broadcast offerings will be designed for backward-compatibility with current equipment, as well as forward-compatibility with future product offerings to maximize productivity while ensuring a seamless transition. Formerly a subsidiary, Grass Valley was absorbed into the Tektronix collective less than two years ago as part of the Video Networking division (EN, Feb. 12, 1996). At that time, Grass Valley reportedly lost some of its personnel as part of a re-deployment program to move TekOs resources to where the work was. Since its merger with Tek, Grass Valley had been quiet in its digital transition until now.