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To: Delite who wrote (4185)	1/12/1998 9:13:00 PM
From: Urlman	Read Replies (1) \| Respond to of 8581

It will be erased by tommorow... I'll repost it here... Technology News Mon, 12 Jan 1998, 8:08pm EST <Picture> BN 1/12 TCI Seen Spreading Set-Top Box Chip Business Among Many Firms TCI Seen Spreading Set-Top Box Chip Business Among Many Firms Englewood, Colorado, Jan. 12 (Bloomberg) -- Tele- Communications Inc. probably will tap several different semiconductor companies, probably including Intel Corp. and Motorola Inc. to make chips for its cable television boxes. The nation's largest cable company last week said Microsoft Corp. and Sun Microsystems Inc. will provide software for the devices. Analysts suspect that TCI Chairman John Malone chose both to avoid letting Microsoft take control of the fledgling market for advanced set-top boxes. Malone probably will follow the same strategy on the chips for the devices, tapping Intel and Motorola, and maybe LSI Logic and VLSI Technology Inc., to foster competition. ''My guess is that there will be a variety of suppliers for the chips,'' said Jonathan Cassell, a senior analyst who follows the industry at Dataquest Inc. in San Jose, California. ''Everyone out there is vying for a piece of this business.'' That's because the market for advanced set-top boxes is so large. About 65 million U.S. homes have cable right now. The race to provide the hardware and software for the boxes heated up last month when TCI and eight other cable companies ordered 15 million boxes from NextLevel Systems Inc. for $4.5 billion. Some analysts predict that the boxes will be in 25 million households in the next five years. TCI has been quiet about its selection of a chip manufacturer for the boxes, which are designed to let people watch hundreds of channels, surf the Internet, access their bank accounts and shop, all using their television sets. Intel's Sure Shot Intel, the world's largest chip maker, has submitted a proposal to TCI to provide the chips. Analysts say Intel is a strong contender because it is eager to get into the market and has a track record that will impress Malone. ''I think it's a given that Intel will get the bulk of it,'' said Stephen Dube, an analyst at Wasserstein Perella Securities in New York. Sun Microsystems Inc. and perhaps Motorola will be among the other suppliers, Dube predicted. Marge Breya, director of marketing and business development for Sun Microelectronics, said the company is ''absolutely'' pitching its chips for TCI's set-top boxes. Sun Microelectronics is the chip unit of Sun Microsystems. Analysts became more convinced that TCI would chose several different chip producers after the company chose Sun's Java programming language to let cable customers surf the Internet. Java is designed to work on almost any chip. Microsoft's CE operating system, the one chosen to run TCI's set-top boxes, also runs on a number of different chips. Motorola's Inroads Another strong contender along with Intel is Motorola, analysts said. Motorola Inc. already makes chips for NextLevel, the company that is making the set-top boxes for TCI, Cassell at Dataquest said. Motorola and NextLevel both declined to say if they were working together on the boxes. Motorola makes a variety of specialty chips and has broad experience with semiconductors used in communications. Clues about which companies are interested in supplying TCI can be found in the list of companies that responded to a request for information from a cable consortium on how to build advanced set-top boxes. The OpenCable consortium, which includes TCI, got 23 responses from Intel, Microsoft, Scientific-Atlanta Group, Oracle Corp., International Business Machines Corp. and others. Intel submitted two responses, one on its own, and another prepared along with Cisco Systems Inc., Netscape Communications Corp., Network Computer Inc., Oracle Corp. and Thomson CSF. Analysts say Intel may have an advantage as set-top boxes become more sophisticated, requiring more computing power. Intel is already the largest provider of chips for powerful PCs. ''Eventually, you may have a cable box that costs $1,000,'' as more and more features are added, said Intel spokesman Tom Waldrop. Those products would need the ''high-performance microprocessors,'' that are Intel's specialty, he said. --Anthony Effinger in the San Francisco newsroom (415) 912-2994 with reporting by Mylene Mangalindan/pkc ------------------------------------------------------------------------