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Thomson Bows Lyra, New DTV Line

Thomson Consumer Electronics entered the Internet-based music business with the RCA Lyra handheld personal player and outlined aggressive pricing on its DTV-ready monitors to over 400 dealers in Las Vegas last week. The presentations featured a dramatic new look and approach to the company’s global business strategy, which includes expanded initiatives to deliver products tied to the Internet to offer interactive entertainment experiences.

Thomson chairman Thierry Breton discussed the company’s return to profitability one year ahead of schedule, then ran through a blueprint for the company’s future direction:

• Thomson will more aggressively pursue the evolving digital audio business with an Internet-based music solution, in the form of the RCA Lyra handheld personal player that uses both MP3 and Real Networks music audio formats. Lyra is also designed to take software downloads to make it forward compatible with new emerging platforms and music file formats.

• Thomson will offer aggressive pricing in new DTV-ready “high-resolution monitors” this fall to make possible packages of DTV-ready monitors and set-top decoders starting at less than $3,000. New monitors all have standard 4:3 aspect ratios but will display scan formats for HDTV 1080i signals.

In addition, Thomson equity investor and DBS marketing partner DirecTv formally announced it will offer local network broadcast TV services into local markets comprising some 50 million households.

Concerning the RCA Lyra, Thomson said it is designed to play MP3 music-format files, RealNetworks music files and can be upgraded through software platform downloads to play other formats that may emerge. It will offer headphones like today’s portable audio products but will be considerably smaller and lighter than tape or optical disc-based devices.

The first version of the player will ship in the third quarter and will include a 32MB CompactFlash removable flash memory card and MusicManager software. The latter integrates RealNetwork’s RealJukebox technology and is designed to help users easily download and archive collected music-file formats on PCs and transfer stored song files to the portable Lyra player. Music files are collected by users from the Internet in the 12:1 compression ratio (CD quality) and can be played back without the risk of the skipping that results when CD or MiniDisc players are jarred or shaken in playback.

The first configuration will carry a $199 expected retail price. A second version with a 64MB card “will likely” follow shortly thereafter at $249. Additionally, CompactFlash cards in a variety of memory capacities can be used with Lyra players.

Initially, players are designed to link to PCs via parallel port connections. Al Arras, Thomson audio and communications executive VP, said Thomson holds over 50% of the patents on MP3 technology and pointed out that the company recently took a 20% equity stake in Music Match, which is one of the leading Internet services for MP3 audio platform software and content. The decision to include RealNetworks compatibility was made due to that service’s large user base.

In digital television, Thomson unveiled seven new RCA and ProScan multiscan DTV-ready rear-projection and direct-view sets, which the company now calls digital high-resolution monitors. All offer 4:3 aspect ratio screens but are capable of displaying scan rates for ATSC 1080i HDTV and 480p SDTV formats, in addition to normal analog NTSC. The sets are designed to connect to RCA and ProScan set-top decoders for off-air ATSC and DirecTv standard and HD broadcasts.

Digital high-resolution monitors under the RCA brand include two rear-projection sets – the 52″ MM52100HR ($2,999 suggested retail) and the 61″ MM61100HR ($3,399) – and two direct-view models – the 27″ MM27100HR ($1,599) and the 36″ MM36100HR ($2,599). New ProScan versions will include one rear-projection set, the 61″ PS61800HR ($3,499), and two direct-view models, the 32″ PS32800HR ($2,299) and the 36″ PS36800 ($2,799).

Gil Ravelette, Thomson TV product management VP, said the high-resolution monitor series will give his company some of the most affordable solutions to HDTV ownership this year. Thomson set-top decoders under the RCA and ProScan brands will start at $649. Ravelette said Thomson opted to go with the conventional 4:3 aspect ratio to reduce cost, further rationalizing that most programming will continue to be offered in 4:3. The set-top boxes will be able to display full 16:9 format pictures in letterbox fashion.

To underscore the cost incentive, Thomson said it will run a promotion offering a free DirecTv HDTV dish, and it will credit dealers for a system installation when a customer purchases both a Thomson high-resolution monitor and a Thomson DTV decoder together. The sets, which come with inputs for multiscan (Y-Pb-Pr) component video as well as Thomson’s RGB via SVGA connection, and set-top decoders will start to ship in August, when DirecTv is to have its HDTV services available.

Due in part to the need to ramp up production of the new high-resolution monitor line, Thomson said it has dropped the RCA 55W” fully integrated HDTV rear projection set from its 1999 plans.

Meanwhile, DirecTv president Eddy Hartenstein told Thomson’s dealers it plans for the satellite service to become “the first” provider to deliver local-into-local network TV signals “using one dish.” The plan is conditional on DirecTv acquiring the necessary Federal Communications Commission approval to transfer ownership of Primestar’s 11 high-power DBS frequencies at the 119-degree west longitude orbital slot from Tempo. It is also dependent upon Congress passing pending legislation that would empower DBS satellite providers to retransmit local signals into local markets.

Hartenstein said the plan is to cover about 50 million homes, or about half of all U.S. households. A majority of those services will be transmitted from the 119-degree orbital slot, meaning current DirecTv system owners would have to purchase a new receiver and larger dish (18″ by 22″) to receive the local network feeds from two different orbital slots.