Consumers to pay for hardware

Jun 18, 2001  •  Post A Comment

Weighed down by burgeoning debts and unrelenting losses of subscribers to direct broadcast satellite operators, cable industry attendees at the National Cable & Telecommunications Association show last week in Chicago acknowledged that they will soon be forced to try to pass some of the cost of their expensive home-entertainment hardware onto consumers.
Set-top manufacturer Motorola made an unexpected retail play at the show when it announced it will begin selling in stores by the first quarter of next year a DCP500 series home theater unit replete with a digital cable receiver, the ability to decode Dolby digital sound, and DVD and CD players. For Motorola, launching the new product marks a bold effort to show consumers an appliance that looks flashier than direct broadcast satellite purveyors’ modest receivers.
“You could say DBS has set the retail price for a [television] box at $99,” said Dwight Sakuma, director of market development for digital network systems in Motorola’s broadband communications sector. The system, which carries a suggested retail price of $849, will target well-heeled consumers. “We want to show a product that has distinct advantages over DBS with its Dolby sound and its DVD and CD player,” Mr. Sakuma said.
One industry analyst believes shifting the cost burden of home-entertainment units to consumers is becoming a trend. “Eventually, consumers are going to be stuck with the bill for the set-top box,” predicted Sean Badding, Carmel Group senior analyst and vice president of business development.
The new home-theater system is one of several innovative products that Motorola exhibited at the show. The company also displayed a wireless Internet contraption (known as a “Web pad”) that is billed as being able to communicate with set-top hardware via infrared technologies. Motorola expects to make the device’s launch official during the second quarter of next year.
“We’re soliciting feedback from the [multiple system operators],” said Barry Falvo, a senior systems engineer in Motorola’s broadband communications sector.
Cable operators will be given a choice of a wireless Web appliance that complies with the HomeRF networking standard and one that conforms to the Institute of Electrical and Electronic Engineers’ 802.11 protocol, Mr. Falvo noted.