Hewlett-Packard to Make Device for Interactive TV
In a deal that advances the development of a new type of TV service, Hewlett-Packard Co. said Wednesday that it would manufacture and market an “interactive television appliance” for use with the two-way television system being developed by TV Answer Inc.
The development also bolsters the re-entry of American companies into the consumer electronics business.
The HP device is expected to be about the size of a VCR and will plug into television sets. A remote control will allow TV Answer subscribers to participate in TV game shows, respond to surveys and order from shopping channels, among other activities.
Reston, Va.-based TV Answer is using advanced cellular radio technology and satellite communications to develop the nationwide “interactive” television system. The Federal Communications Commission last month moved to allocate crucial radio frequencies for the service, clearing the way for TV Answer to begin operations early next year.
Richard R. Miller, chief operating officer of TV Answer, said the company had already invested more than $50 million and would spend an additional $100 million by the time service begins.
The service will be operated by local franchises, which will relay radio signals from the HP devices in customers’ homes to the TV Answer data center, which will be connected to TV program producers and other service providers.
HP said its unit would initially cost about $700--considerably more than the $400 that TV Answer had previously expected its box to cost--but the price is expected to fall rapidly. HP has committed to producing at least 1.5 million of the units--essentially special-purpose personal computers--in the first year under the exclusive contract.
Miller said TV Answer was “very happy to have an American manufacturer.” HP was chosen, he said, because it was an innovative company that would not only build a good product but would also be able to develop new uses for the device and thus help establish the TV Answer network as important component in the nation’s communications infrastructure.
HP Chief Executive John Young said the TV Answer deal builds on the company’s experience in building calculators, hand-held computers and computer printers that are sold through consumer electronics channels.
This convergence of digital computer and communications technologies with consumer-oriented audio and video technologies has raised the hope that U.S. companies might be able to win back some of the ground lost to Japanese consumer electronics firms over the past two decades.
Apple Computer has also announced plans to enter the consumer electronics business with a new class of special-purpose digital products.
