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SEPTEMBER 8, 2005
By Arik Hesseldahl TI Heads for Gadgetland The chipmaker is announcing a product line geared to work well in varied consumer electronics. At stake: A rapidly growing market Chipmaker Texas Instruments will launch a major offensive to sell its chips into the burgeoning market for portable digital video players, as part of a larger push into new consumer-electronics products. In twin events Sept. 8, in New York and San Francsico, TI (TXN ) will announce a new branding effort called DaVinci, under which it will package several existing chip technologies into a unified line of products geared toward video-ready consumer gadgets. The package will include a series of chips, and new software and development tools that TI says will make it easier for manufacturers of consumer electronics to build products that talk to each other and which will share data -- especially video -- easily. EASY CONTENT SHARING? The effort matches rival Intel (INTC ), which at its Developer Forum last month announced its own media-centric chip platform called VIIV (pronounced like "five"). Intel's approach places the personal computer at the center of the consumer digital-media experience, surrounded by new generations of digital video and audio products. In addition to PC chips, Intel also supplies a line of chips used in many handheld devices. TI is taking a different approach. The PC isn't necessarily required, says Greg Delagi, a TI vice-resident leading the effort. "There will be an increasing number of devices that won't require you to be tethered to a PC," he says. "We don't believe the PC is going away. But we do think that the balance of power is shifting away from the PC being the center of the universe." The news is sure to give TI something to crow about on the day that it's set to give its mid-quarter update (see BW Online, 9/8/05, "Chipmakers Face a Chilly Fall"). TI plans to market DaVinci to consumer-electronics manufacturers looking for simple ways to develop new products like media players that play music and video, and which connect easily to scores of other products like cameras, TV set-top boxes, and wireless phones. The idea: Enable the products to interoperate easily with one another, sharing content easily, whether its placing recorded TV shows on a portable device, or putting clips of video home movies on a wireless phone. BIG BUCKS. TI has at least one powerful supporter. Microsoft (MSFT ) is making friendly comments about the DaVinci effort. Erik Huggers, a director of Microsoft's Digital Media Division, says the technology will "change the way video is consumed today." That's interesting, particularly in light of Intel's VIIV platform, which many see as a direct challenge to Microsoft's Media Center PC line of products that combine a TV, video recorder, and jukebox all into a Windows-based PC. Other partners include longtime TI customer Eastman Kodak (EK ), which has used TI's digital-signal processor chips in its digital cameras, and Humax, a Chinese manufacturer of TV set-top boxes. Humax also happens to make the digital video recorders sold under the TiVo (TIVO ) name. TI is making its move at a time when the market for chips going into consumer gadgets is on the cusp of a huge growth spurt. Market research outfit IDC expects consumer-electronics chips to account for $30 billion in global sales by 2009, vs. $14 billion this year. "And video is where most of that money is going to be," says IDC analyst IdaRose Sylvester. "SHOT ACROSS THEIR BOW." TI competes not only with Intel for a share of this market but with chipmakers such as Broadcom (BRCM ) in the set-top box business, and LSI Logic (LSI ) and Sigmatel (SGTL ) in the MP3-player business. Another competitor is PortalPlayer (PLAY ), the supplier of chips for Apple Computers' (AAPL ) iPod. "Anyone who wants to own the digital home will see this as a shot across their bow," Sylvester says. "TI is coming at this market saying the PC may or may not be involved in the digital home at all. But they understand probably better than anyone how cameras and set-top box and all these little devices may need to talk to each other." TI expects to start shipping chips under the DaVinci name before yearend. Several products using it are already in the pipeline, including digital cameras, automotive entertainment products, portable media players, set-top boxes, and video security systems, says TI, though it declined to disclose the manufacturers.  Hesseldahl is a reporter for BusinessWeek Online in New York
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