TV SET MAKER WILL BUILD BOXES, TOO

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If Thomson Consumer Electronics has its way, consumers in the future will have their pick of interactive-ready TV sets-and they'll pick a Thomson brand.

Thomson, the leading TV set marketer in the U.S., made a move into the interactive arena last week through a joint venture with Sun Microsystems, the world's top seller of computer workstations.

Beginning in September, the partners will develop video servers, set-top boxes and related technology allowing telecommunications and cable TV companies to deliver interactive TV, home shopping and online services.

The new venture joins a crowded field in an unproven market. Digital Equipment Corp., for example, said last week it will develop servers working with set-top boxes from General Instrument Corp., a leading cable TV equipment supplier.

Others with products or joint ventures planned for interactive TV devices include Apple Computer, AT&T, Hewlett-Packard Co., IBM Corp., Microsoft Corp., Oracle Corp. and Silicon Graphics from the computer industry.

Philips Consumer Electronics Co. and Zenith Electronics Corp., the No. 2 and No. 3 U.S. TV marketers; and Scientific-Atlanta, another major cable equipment maker, also are vying for a piece of the business.

To be determined is whether consumers will rent set-top interactive decoder boxes from the TV service provider, as is common now with cable TV, or buy the equipment much as they today buy telephones.

But the strategy for Paris-based Thomson and its U.S. arm, also known as Thomson Consumer Electronics, is to work with Sun on a standardized set-top box, license the technology and create a competitive market for sales of the devices.

"We really learned going back to color TV that a single manufacturer cannot really launch an important new business," a Thomson spokesman said. "The consumer needs to be reassured that this product is not going to be an orphan. Betamax fell victim to that."

Thomson, with its RCA and General Electric brands, is the leader in the competitive color TV and VCR businesses, where it relies on technology, brand names and vast distribution to stay on top. That's the same three-pronged strategy it will follow in interactive.

Sun and Thomson will use the new RCA Digital Satellite System-the same hardware consumers use to access the new DirecTv service-as the basis for interactive set-top boxes. Over time, Sony Corp. and others are expected to license the DSS standard in what could be a first step toward introducing their own branded set-top boxes.

At some point down the road, Thomson expects the set-top box to disappear inside the TV-an RCA model, it hopes.

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