Intel, Microsoft team on TV-in-PC

Intel (INTC) and Microsoft (MSFT) have joined together in an attempt to promote what the two companies say will be the next ?killer application,? software that combines TV broadcast reception on PCs with Web-based e-commerce.

Intel's Intercast software will be integrated into the WebTV for Windows feature of Microsoft?s Windows 98 operating system, a blend that will allow PCs equipped with a TV tuner card to receive not only TV programming but also HTML data supporting the broadcast, the two companies said today.

The capability will become available when Windows 98 arrives in June, but both hardware support for TV reception on a PC and content the accompanies the programming are problematic. At the moment, Web content taking advantage of Intercast is in particularly short supply.

The combination of Intercast and WebTV for Windows will transform TV from an ad-driven to a sales-driven medium because users will be able to click on accompanying Web data and make their purchases on the spot, said Ron Whittier, senior vice president and general manager of Intel?s content group.

?That is turning out to be the killer application, and will rapidly change the demand for integrating [TV reception] into PCs,? he said. At the same time, ?It moves [TV] from an advertising world to a selling world,? Whittier said.

?It will expand the market for PCs in the home,? added Microsoft?s Craig Mundie, senior vice president of the company?s consumer products division.

The initial focus will be on analog broadcasts, expanding to digital broadcasting as the digital infrastructure develops, the two companies said. Comparatively few broadcasters now provide content using Intel?s Intercast technology, however. Intercast was most prominently used during the 1996 Summer Olympic Games in Atlanta.

Receiving TV broadcasts on a PC also requires systems equipped with a TV tuner card. Cards for translating analog signals would add about $30 to the the manufacturer?s cost of production, Mundie estimated. PC makers have been hesitant to add such features to PCs at a time when declining retail prices have been squeezing margins.

However, Windows 98 simplifies the implemetation of TV tuner cards, Mundie said. Previously, software that harmonized the card with the rest of the computer was not standardized.

The software will run on PCs using a dial-up modem, a cable modem, ADSL modem, or an office ethernet connection, Mundie said.

On the hardware side, while Pentium II-based systems would able to handle any digital format, lower-power processors might not be able to run anything higher than the 480 progressive (or 480p) digital signal, Whittier said.

The news follows yesterday?s announcement that Intel has begun to work more closely with Microsoft on pairing its chips with the Windows CE operating system that the software maker is aggressively pushing in the market for small consumer and business devices.