Compaq, Thomson join on PC/TV introduction

Electronic News, May 5, 1997 by Sarah Cohen

Gateway's PC/TV system has been reported to have less than stellar sales (EN, Aug. 26, 1996) since its introduction, leaving some skeptics, such as Gary Shapiro, president of the Consumer Electronics Manufacturers Association (CEMA), to say that "television is not an interactive experience" and "the only convergence product that really sold (well) was the Swiss army knife." Other skeptics have questioned the general public's willingness to purchase a $3,000 to $5,000 television set.

Last August, lagging direct-order sales for the Destination PC/TV led to Gateway's decision to market the product through retailers CompUSA and Nobody Beats the Wiz. Neither retailer still carries the product. Although representatives from CompUSA and Nobody Beats the Wiz would not say who made the decision to pull the Destination PC/TV off the shelves, Stacy Hand, Gateway's product marketing manager for Destination, told Electronic News, "We sold retail for eight months as a way to quickly establish the market for the product. Now we've decided the most effective way to market the product is through direct sales."

However, if sales are lagging for this sort of product, and others like it, such as ELLi Corp.'s ELLiVision Gamma and NetTV, Inc.'s NetTV Worldvision '97, why did giants of the computing and television industries Compaq and Thomson join forces to produce a PC/TV themselves?

Patrick Griffin, manager of marketing development for Compaq's consumer products, said he thinks Compaq will have an edge in this market due to the strength of the Compaq and RCA brands, Compaq and Thomson's relationship with resellers and the design of the PC Theatre product. "Our design is fundamentally different than Gateway's Big Screen PC. Ours is truly first and foremost a television with a picture quality that equals or surpasses the average TV. Gateway's picture quality does not meet our standards." Mr. Griffin also said that Compaq and Thomson expect 1997 to be a learning experience rather than a year of high PC Theatre sales.

The PC Theatre integrates a 36-inch, diagonal, big-screen display from the RCA brand with a Compaq multimedia PC. The PC Theatre is powered by a 200-megahertz Pentium processor with MMX technology and includes 40-megabytes of EDO RAM, a 3.8-gigabyte hard drive, 16x Max CD-ROM drive and a 33.6-kilobits-per-second modem. It also incorporates Tseng Labs' ET6000 graphics and multimedia engine, as well as Tseng's VPR6000 video processor.

Compaq and Thomson say the PC Theatre includes an "instant-on" feature to enable the PC Theatre to boot up as quickly as a television set. Gateway also makes this claim regarding the Destination. Both products are said to be a push-button away from converting from the television to the Windows environment. The Destination differs from PC Theatre in that Destination includes a Dolby Surround-Sound subsytem and separate stereo speakers and a sub-woofer--the PC Theatre does not. The PC Theatre is priced at $4,999, about $700 to $2,000 more than the Destination, and will be jointly marketed with both the RCA and Compaq brand names on the product. It will be available in mid-May at Circuit City and CompUSA in San Francisco/San Jose, Seattle, Denver, Dallas/Fort Worth, Houston and Washington, D.C. National distribution is planned for the fall.

An amount of controversy has surrounded PC Theatre and similar emerging systems because PC Theatre makers, television makers and broadcasters disagree on the image scanning protocol. PC makers such as Compaq prefer the progressive scanning method, which lends still graphics a clearer image. Broadcasters and television makers, including Thomson, prefer an interlaced scanning method, which has been in use by broadcasters and TV manufacturers for the past 50 years, and therefore includes no conversion costs. A formal image scanning standard has yet to be ratified.

Keith Wehmeyer, product planning manager of multimedia products and services for Thomson, said the PC Theatre converts interlaced scanned material but runs on progressive scanning; however, follow-up products will offer manufacturers the option of choosing progressive scan circuitry or interlaced. "We're not in the content authoring business," commented Mr. Wehmeyer. "I believe the computer makers have been trying to ram progressive scanning down the broadcasters' throats. Thomson's perspective is we'll support any format that's defined as part of the standard."

A month ago, Intel and Compaq announced the PC Theatre industry initiative to establish open interoperability standards to address the interconnection scheme between the CPU and monitor, standards around user input devices and an interface for attaching existing consumer electronics to the monitor (EN, March 31, 1997). Others involved in the initiative are Thomson, Hitachi, Mitsubishi Electric, NEC Technologies, Philips Electronics (marketer of Magnavox) and Toshiba.