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July 27, 1994

SUN LOOKS TO THOMSON CONSUMER ELECTRONICS TO TAKE IT TO THE MULTIMDEDIA VIDEO-ON-DEMAND BALL

By CBR Staff Writer

Sun Microsystems Inc has found itself a somewhat unexpected partner for the multimedia unit it is planning to set up in September, in the shape of the Indianapolis-based Thomson Consumer Electronics arm of Thomson SA, Paris (CI No 2,455). The planned new unit will be jointly funded and will target telephone company networks, cable television systems and other large-scale public digital networks. Eventually it hopes to be able to sell television set-top decoder units on a retail basis. Sun will contribute technological expertise, Asynchronous Transfer Mode networking, network management and systems management software, and Thomson, which takes in the old RCA Corp and ProScam consumer electronics business, will bring in consumer product expertise, compression technology, digital decoder experience and retail distribution capabilities. Thomson, which is number one in US television and video casette recorder sales and last week began high street sales of its set-top Digital Satellite System, points out that all the fun-and-games offerings encompassed by the term multimedia will be ‘consumer-centric’. Operational details are vague. The as-yet leaderless and nameless unit will have its headquarters on the West Coast of the US, either at Sun’s Mountain View, California site, or at one of Thomson’s facilities. The number of employees it will have depends upon the tasks required by the bids and contracts it is able to win, but it is likely to start with between 50 and 100 staff drawn mainly from the two companies. Initial recruits will work from wherever they are currently based. Sales and marketing will be separate from development and integration units. Technical teams are now putting together the firms’ respective technologies and trying to figure out what is missing; for those pieces, they will either find new partners or develop themselves. Sun and Thomson have been in discussions for more than a year and on this particular venture since January. Sun says negotiations with prospective customers are already under way and that it expects to have something concrete by the first quarter of next year; the two will say more about the venture around the end of September. Existing contracts the firms have won’t move across to the unit. Thomson’s existing set-tops are based on a Thomson SGS Microelectronics NV processor that is not powerful enough for the kind of unit envisaged. It may use Sun’s Sparc RISC, although that has not been decided yet, Thomson says. A blend of Thomson software and the object-oriented set-top operating system under development at Sun’s First Person unit are likely be employed to run the thing. Sun says most of the problems encountered so far on interactive trials fall mainly into the category of the traditional computing tasks that its good at, such as bandwidth, integration and performance.

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