July 16, 2002 11:15 AM PDT

Moxi moves into cable boxes

Scientific-Atlanta, one of the leading manufacturers of set-top boxes for cable TV providers, announced an agreement Tuesday to incorporate Moxi home entertainment functions in an upcoming product.

The Explorer Media Center will combine standard cable receiver functions with digital video recording, MP3 playback and other tasks handled by Moxi's service.

Charter Communications, one of the leading U.S. cable operators, said it will begin offering the Explorer to subscribers next year.

Moxi Digital, launched two years ago by WebTV founder Steve Perlman, made a splashy debut early this year with its design for an all-in-one digital entertainment appliance that would combine video recording functions with digital music and DVD playback and Internet functions such as e-mail and Web browsing.

The company recently merged with Kirkland, Wash.-based Digeo, a better-funded start-up focusing on interactive TV software and services.

The Digeo/Moxi combination quickly became one of the leading contenders for merging television with digital entertainment, thanks to a number of agreements with cable providers. Besides Charter, Digeo backers include media giant AOL Time Warner and satellite TV provider EchoStar Communications.

Competitors include Microsoft, which will soon expand its push into digital entertainment with an add-on to the Windows XP operating system, and companies such as TiVo selling digital video recorders and programming guides.

Analyst Jon Peddie of Jon Peddie Research said Scientific Atlanta's support has been critical for Moxi because of the manufacturer's widespread alliances with major cable operators. Instead of having to forge its own alliances, Diego/Moxi can tap in Scientific Atlanta's existing customer base.

"This is a very, very big deal for them," Peddie said.


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