Samsung Adds PVR to `AOLTV'

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Samsung Electronics America Inc. is developing a set-top for the struggling
'AOLTV' service that could either work in conjunction with existing cable
set-tops or replace them.

The new set-top, which Samsung expects to hit retail this spring, will offer
personal-video-recording functions. It also will contain coaxial-cable
connections and let users connect it to a digital-subscriber-line modem, cable
modem or universal-serial-bus port on a PC, Samsung spokeswoman Serena Tesler
said.

Samsung director of marketing communications Richard Johnson said the company
sees other PVR manufacturers as its direct competition. He added that Samsung
hasn't settled on a price for the new set-top, but it will be 'competitively
priced.'

Time Warner Cable spokesman Mike Luftman declined to comment when asked if
the MSO would deploy the Samsung box to its cable subscribers. America
OnlineInc. spokeswoman Marta Grutka said no executives were
available to discuss the new AOLTV set-top.

Prior to Samsung's entrance, Philips Consumer Electronics Co. was the sole
manufacturer of the first-generation AOLTV box, which does not have PVR
capabilities.

The AOLTV box has been 'a major bleeder' for Philips so far, a source
familiar with the situation said earlier this month. An industry source said
only about 10,000 AOLTV boxes had been shipped as of about three months ago.
Philips spokesman Simon Poulter would not comment on shipment figures.

Forrester Research Inc. analyst Josh Bernhoff said AOLTV has sold poorly
because Microsoft WebTV Networks Inc., with 1.5 million subscribers, 'has
already sucked up the small number of people who want to have the Internet on
their TV set.'

By adding the PVR feature, AOL should be able to sell more of the set-tops,
Bernhoff said, adding, 'People are willing to pay for that.'

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