May 17, 1999 4:50 PM PDT

New clues to TV box of the future

A new chip from LSI Logic and a deal between Spyglass and Korean consumer electronics giant LG Electronics are shedding more light on how the TV set-top box market, and the device itself, might develop.

LSI Logic announced a See related story: The new world order new chip, called the SC2000, that could spur further deployment in Europe and Asia of digital television set-top boxes that offer interactive services such as Web browsing, electronic program guides, and video games.

Also today, Spyglass said it has inked a deal with LG Electronics to provide software that lets a digital TV set-top box browse the Web and fetch movies on demand, among other services. LG Electronics even has plans to integrate the technology directly into TV sets, which is an indication that LG expects the market to develop rapidly enough so that set-top functions are built into a TV.

LG isn't the only company looking at what's beyond the digital box; Thompson Consumer Electronics, which makes the RCA brand of TVs, is also looking at integrating Web browsing technology into the TV set.

The announcements provide more evidence that the set-top box is a focal point for convergence in the computer and television arenas, and how development of next-generation products is accelerating. Microsoft, among others, is going after a big stake in this market. The predominant supplier of operating systems for PCs is dying to get its software into cable set-top boxes, and recently invested $5 billion in AT&T to further ensure its place in next-generation devices due out later this year. LSI Logic sees the trend, too.

"Manufacturers building [set-top] boxes that will be sold in the next 12 to 15 months will have to address those issues" of building interactive services into their devices, said Elie Antoun, executive vice president of LSI Logic's consumer products division. "In terms of mass market adoption, we see [interactive services as] two to three years away [but] our chips have to be ready for that," he noted.

"Some sort of browser capability is going to be one of the standard features of interactivity. Beyond that, [what manufacturers will include] is sort of up in air," with multiple technology providers vying to offer their wares, said Mark Snowden, an analyst with market research firm Inteco, which was recently acquired by another research firm, GartnerGroup.

Snowden envisions that developments in the set-top market will come in such rapid fashion that people will buy TVs that are essentially monitors, with set-tops being the location for most of the electronic brains. That will allow people to easily change boxes without replacing the expensive picture tube at the same time.

Antoun said that initially, he sees a market where service operators are marketing these digital set-tops as high-end devices that will be priced higher than less-capable devices. LSI Logic's new chip combines the functions of an MPEG-2 playback "engine," technology for decrypting and translating a variety of broadcast formats, a 2D graphics chip, an audio chip, and 108-MHz MIPS-based processor onto a single piece of silicon.

Integrating more features onto a single piece of silicon helps lower the See special report: When worlds collide cost while making the manufacturing process simpler, said Antoun. As the chip design is further refined, Antoun said a set-top box maker will only have to use one LSI chip in boxes that can be sold in a variety of countries, many of which use incompatible broadcast formats, and thus currently require different chipsets.

Also, with one chip, a manufacturer could make a standard design for a variety of uses, whether they be satellite, cable, or digital television receivers. That will help spur deployment of interactive services in Europe and Asia, Antoun thinks.

While a flurry of deals in the U.S. market revolving around interactive services and television has attracted the most attention, Europe and Asian markets are also moving rapidly to deploy video on demand, email, e-commerce capabilities, and more to set-top boxes.

Research firm Strategy Analytics predicts that 49 percent of European households and 63 percent of U.S. households will own digital TV set-top boxes by 2005.

LSI Logic said samples of the SC2000 are currently available, with volume shipments slated to start in the third quarter of this year at an expected price of under $20. LG Electronics did not announce any specific product plans.

 

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