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To: VidiVici who wrote (39101)	3/2/1999 2:48:00 PM
From: BillyG	Respond to of 50808

Neomagic aiming for recordable DVD........ electronicnews.com Enabling Portable Consumer Products NeoMagic tosses its hat into new areas of interest By Peter Brown Santa Clara, Calif.--Notebook PC graphics leader NeoMagic Corp. is moving into the portable consumer electronics market, using its technology in 2-D/3-D graphics and embedded DRAM combined with intellectual property the company has gathered in the past week. NeoMagic said it initially is focusing on digital cameras and recordable DVD. The company affirmed its dedication to the consumer market, which it abruptly entered in June of last year, last week by acquiring ACL, a consumer company focused on digital cameras, and Mitel Semiconductor Inc.'s optical drive development group. The acquisitions enable NeoMagic to complete its portable product portfolio for consumer electronics applications, while positioning the company to deliver these products in the very near future. "The company is moving beyond just doing portable graphics and into the consumer realm," said Amnon Fisher, senior vice president and general manager of the consumer products division of NeoMagic, based here. "We will be playing to our strengths in embedded DRAM and building affordable portable chips that will be far different and better than current offerings out on the market today." NeoMagic believes with these two acquisitions that the company has shored-up its consumer electronics capabilities. allowing it to move forward with its multifaceted plan to penetrate the highly competitive portable consumer electronics market. However, NeoMagic cannot enter the market and expect to be profitable immediately. The company will have to offer something compelling that consumers will prefer to the dozen other companies focusing on the same portable consumer segment. NeoMagic's success or failure in this area will hinge on the company's primary technology differentiation: graphics and embedded DRAM. Acquisitions Among Us The acquisition of the optical drive group of Mitel was intended to gain the company's optical storage read-channel product line and the experience in mixed-signal analog design of the group, Fisher said. NeoMagic has been working on both the controller and servo portions of a DVD product and "we needed the third piece to complete our offering and that is where Mitel came in," Fisher said. The company has already begun sampling both the servo and the controller parts and will soon be sampling the third piece from Mitel. NeoMagic also gains the company's 16 engineers who will stay in Manchester, England. The acquisition of ACL, based in Tel Aviv, Israel, is Internet related, said Fisher. The goal of acquiring the 10 employees and intellectual properties related to array-based processing architectures is to develop "Internet-friendly" digital cameras that hook up directly to the Internet without having a PC. "In order to view images on the Web as the bandwidth increases you will need some sort of graphics capability married with whatever consumer or PC application that is out on the market," said Fisher. Fisher noted NeoMagic has that graphics capability and now the consumer technology to enable such an Internet-based camera that does not necessarily have to use a PC. The company is also looking into portable recordable DVD players when a standard is agreed upon. Graphics Expanding NeoMagic's strategic plan to move into the consumer electronics market is not much of a surprise given the move by IC graphics leader ATI Technologies Inc., Toronto, Canada, to go full boar into the consumer market, targeting set-top boxes and other areas. ATI recently received a key design win from General Instruments Corp. who will use the companies Rage consumer chip in future set-tops for the cable market. ATI is not the only company pursuing this strategy. Last month, Santa Clara, Calif.-based S3 Inc. said it would be moving into the set-top and other consumer appliances market with future generations of its Savage4 3-D graphics processor. Matrox Graphics Inc., based in Montreal, Canada, may be the next company to follow suit. Struggling Cirrus Logic Inc., Fremont, Calif., recently exited the graphics market entirely to focus on consumer and mass storage related applications. The company had already been forced out of the graphics market due to missing a design cycle and focusing on too many products at once. Now the company is looking at more integrated offerings to pull itself back to profitability.