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Friday, January 09, 2004
Intel Moves Into Consumer Electronics
http://www.bizreport.com/article.php?art_id=5931
by Ben Berkowitz and Daniel Sorid

Intel Corp. , the world's largest microchip maker, on Thursday said it plans an aggressive push beyond the PC into consumer electronics with new chips for big-screen high-definition televisions and an all-in-one home entertainment PC.

The new vision was unveiled in a speech by Intel President Paul Otellini at the Consumer Electronics Show in Las Vegas, a forum being used by the computer industry this year to showcase bold moves into consumer devices like TVs and media centers.

"The lines between these two industries are blurring, but they are blurring at an increasing rate," Otellini said.

The world's largest microchip maker said it intends to give consumer electronics the same level of attention it gave last year to wireless technology, which was highlighted in a $300 million marketing campaign for its laptop computer chips.

Earlier this week, Intel said it would invest $200 million in companies that are building "digital home" technologies intended to allow media to freely flow between devices around the home.

While Intel dominates the market for PC microprocessors, its latest initiatives target a new set of competitors: consumer electronics leaders such as the Netherlands' Philips Electronics

, which are unlikely to accept the chip giant's entry without a fight.

Some details of the speech had leaked out beforehand, and anticipation was so high that some CES attendees skipped a keynote by the president of Panasonic to line up an hour ahead of time for the presentation.

Otellini's new era is one the company envisions being powered by its chips. Liquid Crystal on Silicon, or LCoS, chips promise to make 50-inch high-definition TVs cost less than $1,800 by next year, he said, while powerful 3 gigahertz processors will run the PC centers.

EVERYTHING BUT THE KITCHEN SINK

So-called Entertainment PCs, Otellini said, will come on the market later this year, priced around $799 or less. They are intended as a complete replacement for home entertainment centers, offering live TV tuning, video recording, DVD and music playback, photo display and even video gaming.

"It's not created for the creation of content, it's created for the consumption of content," he said.

The PCs, which also offer surround sound and built-in wireless access points, will use what the executive called "10-foot interfaces" that let consumers sit back when watching PC media as opposed to leaning in close.

Otellini told reporters after his speech that the company has been able to win over skittish Hollywood partners to the idea of networked digital home media.

"We showed them that we're not out to drive rampant piracy and that we can develop a standard that will allow consumers the flexibility they expect and allow them the protection they require," he said.

TVs LATER THIS YEAR

Intel's television chips use a novel technology that combines liquid crystals, a mirror-like surface and a silicon chip. Display manufacturers in China, Taiwan and the United States are now working with Intel prototypes, the company said.

The advantage of LCoS, Otellini said, is high resolution from small spaces between the pixels that compose a picture, as well as the lack of "burn-in" problems that face some plasma televisions.

Texas Instruments Inc. already supplies a chip using a rival technology, called digital light processing, which uses more than a million microscopic mirrors to reflect a high-definition image onto a big-screen television. Big-screen sets based on DLP are produced by Korea's Samsung Electronics <005930.K>, France's Thomson , and others.


© 2004 Reuters