January 8, 2004 3:34 PM PST

Intel's future: That's home entertainment

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LAS VEGAS--Intel wasn't kidding when it said it was interested in consumer electronics.

Intel president Paul Otellini fleshed out the company's strategy for the home at the Consumer Electronics Show on Thursday in Las Vegas--and it involves getting into a number of new markets and designing new products for manufacturers.

"There are over 350 million digital devices that will be sold into the home this year," he said. "The lines between the two industries (computers and consumer electronics) are blurring?Consumers are demanding change inside their homes. We all want to have multiple video streams."

One of the first products to come out of this effort will be the Entertainment PC, or EPC, a fully-fledged Windows XP Media Center PC that more closely resembles a VCR. There is no keyboard, and people operate it with a remote control. Instead of having its own screen, it sits on top of a television set. Ideally, consumers will use these as a vault for storing music, viewing pictures or video, or recording TV programs just as a TiVo box does.

Microsoft Chairman Bill Gates showed off a TV set-top box, called the Windows Media Center Extender, on Wednesday night at the conference, but the EPC is more elaborate. The Windows Media Center Extender has no hard drive and retrieves files from a PC. The EPC is a computer in its own right and can function as a wireless access hub for other devices.

The EPC will contain Intel's upcoming Prescott chip, running at more than 3GHz, and will cost about $799 when it debuts in the middle of the year, Otellini said in an interview. Intel designed the machine but is licensing it to PC makers. Last year, the company worked on the design of an all-in-one flat-panel TV that Gateway is now selling.

Toward the end of 2004, the first TVs using Cayley, a projection system for large-screen TVs, will come out, he said. China's TCL, among others, have committed to building televisions with Cayley, he said.

During the year, a number of companies will come out with stand-alone personal video recorders and portable video players that use Intel silicon, he added.

Then, in 2005, Intel expects to start selling more imaging chips for digital printers and to see its microprocessors get inserted into digital video cameras, he said. Digital video cameras at first will use Intel's Xscale chip, but will move toward using x86 processors--based on the architecture used in desktop Pentium chips.

"The beauty of it is the homogeneity," Otellini said. "All of the standards are being driven more and more into consumer electronics devices." Historically, the silicon chips in many of these devices are customized.

In many ways, the consumer electronics industry will follow the pattern set earlier by the PC market, according to Otellini. As standards become more broadly adopted, the time to bring products to market will shrink, and prices will come down. Typically, a consumer electronics device might take three to five years to develop. That time is shrinking to between nine months and two years.

"We in the PC industry have seen this move before," Otellini said.

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In the portable area, Otellini and Anand Chandrasekher, general manager of Intel's mobile division, showed off a prototype notebook named "Florence." The notebook contains a mouse that can also be used as a remote control and a keyboard with a portable Wi-Fi phone that slides out of its side.

Chandrasekher also announced Carbonado, a graphics chip for handhelds. Years ago, Intel manufactured graphics chips for PCs, but it left the market after dismal sales. It currently makes chipsets with graphics functionality--but not discrete chips. Dell plans to use Carbonado in its next Axim handheld.

Like any CES keynote, Otellini's presentation mixed in a comic video. In "Digital Eye for the Analog Guy," hip techies invaded a home of a middle-aged couple and gave it a makeover. The show used the same graphics and arch sensibilities as Bravo's "Queer Eye for the Straight Guy."

"You've heard of a metrosexual," Drew, one of the makeover artists in the video, tells his hapless charge. "We are going to turn you into a technosexual."

 

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