Intel Backs Down on Digital TV Formats
It’s not often that Intel Corp. has to bow to anybody, but the company did so with unmistakable contrition this week when it dropped its opposition to digital television formats favored by the broadcast industry.
The gesture marked a retreat from the company’s position last April, when Intel, Compaq Computer Corp. and Microsoft Corp. urged broadcasters to adopt personal computer transmission formats or risk defeat in what Intel Chief Executive Andy Grove described as the “war for eyeballs.”
The move could heal a rift between two industries jostling for a dominant position in the nation’s living rooms. Late next year, television broadcasters begin making their biggest technological leap in decades, converting from analog to digital signals that promise not only sharper pictures and sound but a new breed of content that mixes traditional video with computer-style interactivity.
Acknowledging that last April’s effort to dictate terms was “a smashing failure,” Ron Whittier, general manager of Intel’s content group, outlined a more conciliatory approach at the company’s Santa Clara, Calif., headquarters.
Intel demonstrated an array of products from high-end PC theaters to low-end set-top boxes. All are based on the company’s microprocessors and are capable of handling new digital television signals due next year, no matter the source--airwaves, cable or satellite--and no matter the format.
Analysts applauded Intel’s compromise and said the company is poised to capture a large share of the market for new appliances consumers will need to process and display digital television signals.
“Intel was chastened, and you might even apply the word sobered,” said analyst Richard Doherty, director of the New York-based Envisioneering Group. “But instead of stubbornly sticking to their guns, they realized there is a way to do both.”
The dispute centered on incompatibilities in the way video is delivered and processed. Computers use a so-called “progressive” scheme that paints an image on a monitor in sequential horizontal lines.
TV broadcasters have long used and still favor a format known as “interlaced,” which skips every other line, then fills in the missing lines on a second pass-through.
Intel’s technology for handling both formats--and numerous variations of each--depends on software developed by Hitachi America Ltd. and, of course, the increasing power of Intel microprocessors.
In fact, the company hopes consumers will soon be compelled to buy new devices for their living rooms as often as they have to buy new PCs. That pace of obsolescence may not go over well with consumers, who typically expect their television systems to last a decade or more.
Simpler devices, such as a set-top box, will likely cost about $300, Intel officials said. But more complex systems could cost thousands of dollars. Intel will supply chips and specifications for the devices but will not manufacture them, executives said.
Intel is spending more than $100 million to help leading networks and cable channels--including MTV, PBS and Nickelodeon--develop interactive channels, online catalogs and other types of digital programming. Intel also demonstrated the ability of digital broadcasting to deliver in seconds enormous files such as complete music recordings and computer games that would choke ordinary phone lines.
