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Digeo Cuts Staff, Retail Products

Kirkland, Wash. — Digeo disclosed Tuesday that it has discontinued plans for previously announced retail versions of its Moxi HD Digital Media Receivers (HD DMR) and will instead focus on the development of a next-generation model slated for introduction later in the year.

The company said the decision was made to allow its development team to focus on fewer platforms, and will result in a reduction of Digeo’s workforce by nearly one half, the company said.

Positions being eliminated will be those that “are not critical to development of the new products,” the company said.

Among the changes is the appointment of Greg Gudorf, current Digeo president and COO, as new CEO, replacing Mike Fidler, who will stay on temporarily to help implement the new strategy and “insure a smooth transition,” according to a statement.

“We believe we have a very strong team moving forward but in order to insure the vision and enhance the opportunities for success and grow business in the future we had to make these moves today,” Fidler told TWICE. “I will continue to work with Greg in building the new strategy out and make sure we keep the valuable partnerships we’ve established moving forward.”

The two executives have worked closely together at Digeo since late 2005, after having worked together for many years at Sony.

“With our revised product strategy, it made sense to realign our leadership team as well,” Fidler said it a statement. “I remain very enthusiastic about Digeo’s mission, its Moxi products, our partnerships and Greg’s leadership capabilities. While the new strategy is absolutely the right thing to do for Digeo’s business, Greg and I both profoundly regret the personal consequences of this action for our employees who will be affected.”

The company said it has discontinued plans for the release of “some retail DMR products it had previously announced, including the delayed Moxi Multi-Room HD DMR and the Moxi Home Cinema Edition DMR.”

Instead, Digeo will focus on its next-generation consumer DMR, which Digeo has been developing at the same time as the cancelled projects. Digeo said it will announce plans for the new retail product later in the year.

The Moxi TV for PC (XP version) product that is beta testing now will remain in beta as the company continues to work on various Windows versions including Vista, Gudorf said.

The company plans to go ahead with the release of its Moxi HD DVR for cable, which is currently in trials and is scheduled for release later this quarter, Gudorf said.

“What we are doing is continuing our focus on the cable area, narrowing our focus on retail so that we can get this Moxi experience that Mike and I really believe in and came up here to pursue to retail,” said Gudorf.

All of the company’s current content and development partnerships — including its product collaboration with Monster Cable; Yahoo’s Flickr photo-sharing site; a music discovery service provided by Finetune; casual games such as sudoku and poker from Accedo Broadband; home networking with 4Home Media and news, weather and sports information with CloverLeaf Digital — will remain intact, the company said.

Digeo said it will also restructure its development team as part of the new strategy to focus on fewer projects and to flatten the structure of the development organization. Three new engineering groups will now report directly into the office of the CEO to ensure greater accountability and transparency.

“Building the software and hardware for this category is a complex endeavor, with dynamic technical standards, regulatory issues and content considerations. Previously, we were spreading our energies across too many platforms,” said Gudorf. “This focused strategy promises to bring a set of advanced and compelling DMR features to consumers, at the right cost and at the right time. We remain committed to bringing the best television experience to our customers and we are confident that we’ll emerge even more successful as a result of this focusing effort.”

Digeo had planned to launch retail versions of its Moxi high-definition DVRs before the end of 2007, before meeting with delays.
The company, backed by Microsoft co-founded Paul Allen, supplies DVRs to eight cable operators, including Comcast, Time Warner Cable and Charter Communications.