Thomson, Seagate Team Up on Digital Storage

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Thomson Multimedia and Seagate Technology Inc. last week said they have formed a joint venture to develop digital storage devices for consumer-electronics manufacturers.

Thomson and Seagate each own one-half of the new company, CacheVision, which will be headquartered in San Jose, Calif.

CacheVision president Richard Johnson, who had been vice president of Seagate's Consumer Solutions Group, said initial storage applications will likely be hard drives for television set-top boxes, such as personal-video recorders. Other consumer devices could include digital-music jukeboxes or movie jukeboxes.

"One day you'll see [electronic] storage on the refrigerator," he said, adding, "Leave it to companies like Seagate" to determine the applications for such a product.

CacheVision plans to introduce its first products in the fourth quarter of this year, and expects its original-equipment-manufacturer customers to show prototypes of CacheVision-enabled products at next January's Consumer Electronics Show.

Quantum Corp. director of strategic marketing Bentley Nelson said the consumer-electronics industry represents a new opportunity for hard-disk manufacturers, and he predicted that the market for TV-based disk drives has twice the potential of the PC market.

Nelson said Quantum was instrumental in developing personal-video-recording technology for TiVo Inc. and ReplayTV Inc. Quantum has also started to focus on the game-console market. He predicted that video games would shift from a packaged-media model to a service-provider model.

"We've got a history of putting a seed out there and watching the market grow," he added.

Thomson's perspective as a consumer-electronics manufacturer will help CacheVision to more quickly address problems the industry faces in integrating hard drives with their set-top boxes and other products, Johnson said, which is "no trivial task."

For example, hard drives used in a television environment need to be quieter than those used in a typical PC.

"In the PC, the noisiest element is the fan," Johnson said, adding that as long as the hard drive is less noisy than the fan, it wouldn't pose a problem. But consumer-electronics companies don't want to add fans because they add cost.

Hard drives used in home-entertainment products need to be more rugged than ones used for PCs. "Consumers tend to be a lot more brutal with consumer-electronics equipment than with a PC," Johnson said. Issues such as these "force consumer-electronics manufacturers and drive manufacturers to be a lot more creative," he added.

In addition to consumer-electronics companies like Thomson-which sells televisions and other products, primarily under the RCA brand in the U.S.-CacheVision also plans to partner with service providers, such as cable operators and direct-broadcast satellite providers.

"We've seen that the use of storage has been adopted very aggressively by the satellite operators," Johnson said, pointing to DirecTV Inc.'s plans to introduce an integrated TiVo DBS set-top box and to EchoStar Communications Corp.'s current "DISHPlayer" receiver with a built-in hard drive. "They did this as a way to compete more aggressively with cable."

The cable industry has been reluctant to add hard drives in its set-top boxes because of the greater cost associated with swapping out legacy hardware in a mature market, Johnson said.

Some cable operators may introduce set-top boxes with a minimum amount of storage and the ability to expand that storage through external hard drives. The consumer can then make a decision about when and how much storage to add and buy such external devices at a local consumer-electronics store.

"It's my feeling that service providers will create the demand" for new television-based products that include hard-drive storage, Johnson said. "They'll be the organizations that create the business model and that already have ongoing contact with the consumer."

The first significant buying period for storage-enabled televisions and set-top boxes will be the fourth-quarter holiday season of 2001, Johnson predicted. The industry still needs to find the right business model for getting the boxes into consumers'homes, and costs need to come down on the hard drives, as well as on encoding and encryption technology, he added.

CacheVision's digital disk drives will be capable of recording high- and standard-definition digital-television signals, as well as analog video, which will first be converted to digital for storage. Encoding one hour of HDTV programming, however would require about nine times the storage capacity of one hour of SDTV, Johnson estimated.

The storage devices would use the "5C" copy-protection standard that will also be used for future-generation digital televisions.

Initially, CacheVision plans to sell its hard drives on an OEM basis. Down the road, the company may take the Intel Corp. approach and brand its products, "CacheVision Inside," Johnson said, but that decision has not yet been made.

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