Pace Micro Gets Big Win With Comcast Box Order

Author:
Updated:
Original:

U.K. set-top maker Pace Micro Technology plc won another big U.S. deal last week, announcing a three-year contract with Comcast Corp.'s cable unit to supply 350,000 digital set-tops.

The value of the deal was not disclosed.

Last November, Pace inked an agreement with Time Warner Cable for at least 750,000 digital set-tops-its first consummated U.S. deal.

The Comcast deal will help to fuel the MSO's furious digital-TV-rollout schedule. In a May announcement, Comcast president Brian Roberts said the company expects to end the year with 1.25 million digital subscribers, up from previous estimates of 1 million. On Jan. 31, Comcast said it had topped the half-million mark.

In Pace's latest U.S. win, it agreed to deliver to Comcast 300,000 set-tops with Motorola Broadband Communications Sector's "DigiCipher II" conditional-access technology, an integrated cable modem and hard drive functionality designed to support personal-video-recording services.

Pace licensed DigiCipher technology from General Instrument Corp. (now Motorola BCS) in January 1997.

According to Pace Americas president Neil Gaydon, the hard drive, if Comcast opts for it, will store a minimum of 40 gigabytes of video.

According to Gaydon, Pace worked on developing a PVR user interface with Comcast, representing a separate technology from the TiVo Inc. and ReplayTV Inc. PVR services now in vogue.

Gaydon wouldn't discuss this box's tuning and processing chip set, citing competitive concerns, although he said the tuner is American Television Systems Committee-compliant.

In a news release, Pace said the box's processor is capable of 300 million instructions per second.

Pace said the box will support Microsoft Corp.'s "Microsoft TV" and Liberate Technologies' interactive-TV platforms. The box will include support for high-definition television and the Institute for Electrical and Electronics Engineers' "1394" interface.

This box represents a new configuration for Pace, and is designed for Comcast systems that use Motorola's headend and conditional-access technologies.

It is intended to "bring a fresh look to the DigiCipher world," Gaydon said. With the deal, Pace will become Comcast's second source, after Motorola BCS, for these systems.

The remaining 50,000 set-tops will be Pace's "Di5101" "Pegasus-compliant" box with "PowerKEY" conditional access; the PowerTV Inc. operating system; and either Scientific-Atlanta Inc.'s "Resident Application" or Pioneer New Media Technologies Inc.'s "Passport" interactive program guides.

The Di5101 is the same box earmarked for Time Warner.

The box will include Broadcom Corp.'s "BCM7100" chip, and the first volumes will be produced this year, with full-volume productions due early next year.

The new DigiCipher-based box will be produced in the United Kingdom and, later, in Mexico by Flextronics International Ltd.

While Gaydon wouldn't reveal the prices of each box, he equated the DigiCipher box with Motorola BCS'"DCT-5000-level" box and the Di5101 with the S-A "2010," although he added, "We think the performance of [Pace's] box is considerably better."

With the Comcast order, Pace is demonstrating its ability to supply set-tops for both S-A- and Motorola BCS-based networks. "We'll be able to supply both technologies to the market," he said.

Longer term, Gaydon said, Pace hopes to work with Comcast in developing a home-gateway set-top to support home-networking technologies.

Beyond the financial reward of the Comcast Digi-Cipher-based set-top order is a significant victory for Pace because, as Paul Kagan Associates Inc. senior analyst Leslie Ellis explained, the company both licensed Digi-Cipher and opened a Denver office in 1996 to seek an order from Tele-Communications Inc. (now AT & T Broadband).

But Ellis added that the exercise "was little more than TCI using Pace as a fulcrum to get a better price from GI. Pace turned out to be just a pawn in the game."

Pace's Comcast win could bode well for the company, as "there's a total shortage [of digital set-tops] at this time," Ellis said.

She quoted one unnamed set-top-box maker as saying that market conditions for digital set-tops are "hand-to-mouth," with manufacturers cranking out boxes as quickly as possible to meet the escalating demand of MSOs racing to sign up digital subscribers.

Related