News

Rearden Shows Its 'Moxi' With All-In-One Platform

1/06/2002 7:00 PM Eastern

It's been one of the cable industry's most closely guarded black-operations projects, but the wraps are finally coming off of Rearden Steel Technologies Inc.

The company, which is emerging from a two-year cocoon of stealth, is now called Moxi Digital Inc.

Armed with $67 million in funding from lead investor AOL Time Warner Inc., EchoStar Communications Corp., Cisco Systems Inc. and Vulcan Ventures Inc., Moxi will hit the market with a Linux-based, digital box design and middleware that it claims can end customer confusion over multiple entertainment devices.

Moxi will need all of its brand-name bravado to elbow into a digital market that has no shortage of entertainment, networking or set-top box competitors.

The brainchild of Apple Computer Inc. veteran and WebTV Networks Inc. founder Steve Perlman, Palo Alto, Calif.-based Moxi aims to create a system that can eliminate the maddening interconnection mire that most consumers face when trying to link up their VCR, DVD player, television set, phone, portable device and computer.

A second goal was to provide a better navigation guide to locate specific content among the myriad television program channels, Internet resources and computer hard drives they now can access.

"Our mission is to deliver a complete home-entertainment solution for the whole house, and obviously, we are trying to enhance the experience, but also to simplify the experience," Perlman said. "We worked really, really hard to pull all of this together because if you have it in individual components, it is just too complex. Nobody knows how to hook it up, no matter what you explain to them."

Rather than getting into the manufacturing game, Moxi will sell the middleware license to cable and satellite operators based on the number of homes in which it will be deployed. And it will virtually give away its hardware design.

The network operator will then sign with a manufacturer to produce the boxes.

Although the company may be looking at future revenue streams, the idea is to maintain the focus on its financial meat and potatoes — the middleware.

"Someday in the future, we will do applications and things like that, and those are all good things for when I present to investors and so on," Perlman said. "But we keep it simple. I really learned a lesson at WebTV and [Microsoft] TV, where there are so many complicated things that we ended up putting in there and it is too hard to explain.

"And I think MSOs are not used to working that way — they just want to pay one fee and be done with it," he added.

Available later this year, the Moxi Media Center can replace a digital cable or satellite set-top receiver. The box design includes digital video recording functions, DVD and CD functions, video-on-demand, instant messaging, chat, electronic mail, Internet access and a beefed-up navigation guide to ride herd over all of that content.

The cable box will come with a built-in cable modem. The satellite version will sport a 56K dial-up modem and an option for an external digital subscriber line modem or two-way broadband satellite connection.

The unit's forte is its many ports. In addition to universal serial bus (USB) and Ethernet connections, it will offer Institute of Electrical and Electronics Engineers IEEE-1394 "Fire Wire" ports to link to other home entertainment equipment.

It will come in either a two-tuner or four-tuner configuration, depending on how many TVs are in a given home. Smaller, less-expensive media center extension boxes would be attached to secondary television sets and linked back to the main box.

Because the extensions are more simple than the main box, Moxi's pitch is based on cost: For a two-TV-set home, the unit cost drops to $250. It falls to $200 for homes with four TV sets.

The system's aim is to become the center of a home network that uses wireless or wired Ethernet connections, or existing coaxial wiring. The main Moxi Media Center can supply firewall functions and act as a Dynamic Host Configuration Protocol (DHCP) server, handing out Internet-protocol addresses to various devices. Its minimum 80-gigabyte hard drive can handle video, audio and data-content storage.

"Most broadband installations done these days are to one computer, and it is very complex for people to figure out how to do the networking," Perlman said. "So this is it — you have a network in your house; you are done."

Second-generation Moxi middleware, targeted for a 2003 debut, will add the ability to hook camcorders and digital cameras up to the network, as well as the ability to copy media upstream to a network-hosted family Web page. It also will support IP telephony, video telephony and Palm Computing Inc. devices as peripherals.

Perlman even says the Moxi boxes, with their software-dominated architecture, will meet or beat rival systems on cost.

The standalone Moxi media center will cost $425 for cable and $350 for satellite, compared to $570 for a standard digital-cable box with PVR capabilities or $400 for a similarly equipped satellite box, Perlman said.

"Advanced digital boxes just haven't gone anywhere, and the most-often cited reason is they are just too darned expensive," he said. "The cable operators don't understand or are unwilling to take the risk that they are going to be able to get enough additional services and capability from these advanced boxes to justify their deployment. So we knew to be success as a company, we were going to have to drive the cost down or our system so we were about the same cost as the cheapest box they could deploy."

Perlman said the key to limiting costs lies in the fact that Moxi's hardware and software designs were developed simultaneously. Other manufacturers build boxes before they know what software will run on them, so they must use generic configurations.

"We hone the thing down, so certain functions that are in hardware in a [Motorola Inc. DCT] 8000-series box we do in software, combined with a small amount of hardware to help the software along, but not a full hardware implementation," Perlman said. "We've got a whole bunch of things like that that allow it to be as inexpensive as possible."

Despite the more tailored hardware-to-software relationship, Moxi won't be limited in gaining contracts in systems with other set-top boxes, Perlman insisted.

"If there was a hardware function that is in the 8000 that we do in software in our box, fine. We will use the hardware in the 8000. We don't care," Perlman said. "Our software and our hardware is very tuned."

On the other hand, "if someone wants to detune the software, if you will, to make it run on a more general box, we can do that."

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