Boca soars on Philips set-top box deal

Boca Research Inc. (Nasdaq: BOCI) shares caught the AOL TV jet stream on Tuesday, rising 28 percent to 7 7/8. Boca's design was chosen by Philips Electronics NV (NYSE: PHG) to be used to fill America Online Inc.'s (NYSE: AOL) $300 million order for set-top boxes.

AOL unveiled its designs to attack the television market, by buying $300 million worth of set-top boxes from Philips and forming partnerships with DirecTV and Hughes Electronics to develop its own Web TV product.

Philips will pay royalties to Boca Research to license its reference design for set-top boxes. Both Philips and Boca are working to modify the design to AOL's needs

The design uses National Semiconductor Inc.'s (NYSE: NSM) MediaGX chip and Web browser software from Network Computer Inc.

The metrics for Web use down the road look healthy. As many as 18 million people are expected to be using TV sets to reach the Internet by 2003, according to Internet Strategies Group. Internet use is seen growing to about 319 million users by 2002, up from 95 million last year, according to IDC and Forrester Research studies.

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