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TCE Recaptures RCA’s Luster As Digital Future Is Forged

Once upon a time there was a consumer electronics company uniquely positioned to take not justa leadership position in our industry, butthe leadership position.

What provided that capability was its vast expertise in a variety of industry-related sectors. If this company wanted to build and market FM radios, well, it had a vast network of AM broadcasters that could expand and add FM. To bolster the sale of stereo phonographs it had a record company and a stable of musicians to guarantee software availability. Color TV? No problem, it had a network of TV stations, too.

To ensure that its products were on the leading edge of the technology curve, it had a world-class research and development lab that produced highly advanced electronics for the military, which in turn resulted in higher-performance parts and circuitry for consumer goods.

The company was, of course, RCA, the diversified powerhouse that GE gobbled up in 1986, then dismembered and sold or discarded piece by piece, retaining only NBC and some government business.

The RCA brand, and the RCA leadership spirit, was reborn after GE traded its consumer electronics business to Thomson of France. Thomson Consumer Electronics (TCE), as the U.S. operation was named, stumbled somewhat as it attempted to regain the RCA brand’s footing in the market here. But under the leadership of an RCA veteran, Joe Clayton, TCE adopted a “take no prisoners” marketing approach that, over a period of years, put the company back firmly on solid ground in terms of both market share and financial performance.

All this, it should be noted, was achieved with the full support of the French parent, now Thomson Multimedia, which had its own problems. TMM, owned by the French government, was swimming in a sea of debt, struggling with inefficient factories and a soft European market, and trying to stave off being acquired by Korea’s Daewoo. But one by one, TMM’s internal problems were solved, and a new management, one dedicated to growth in the emerging age of digital, was put into place.

At the same time, the corporate view was that it was time for a new kind of management at TCE, as well. While there was no question that the Clayton approach put TCE on its feet, it is under senior executive VP Jim Meyer that the company has all but completed its transformation into a business with wide-ranging interests in digital products and technology. And in doing so, it has again assumed an industry leadership mantle.

While TCE lacks the kind of in-house support that made RCA Consumer Electronics what it was, it has accomplished much the same kind of backing through outside partnerships. Working with DirecTv, for example, TCE led the digital satellite parade and parlayed that experience into becoming the leading supplier of digital set-top boxes and cable decoders.

Similarly, its ties with Microsoft will turn TCE into a major provider of key parts for video game consoles and give it more experience in the interactive video arena. Working with hard-drive maker Seagate, along with DirecTv and Microsoft, TCE is preparing for advanced interactive satellite video products with enhanced program recording and playback capabilities.

What’s more, a longstanding alliance with Gemstar has made TCE the leader in onscreen TV program guides, a capability that is making it a know-how provider to other manufacturers, as well as to multimedia content providers, which is generating important ongoing revenue streams. In addition, as part of that alliance, TCE has become the leading provider of dedicated electronic books, a still-experimental product area that others have entered and failed.

With all that on the front burner, TCE hasn’t forgotten its traditional role as an A/V product leader. It’s still No. 1 in conventional color TV; it is continuing to emerge as an important leader in audio, including digital MP3 equipment; and through its venture with Alcatel, a powerhouse in consumer communication equipment, its bases are covered in that category as well.

TCE’s role in digital video peripherals has already been noted. But even more important, it is leading the way in bringing affordable widescreen high-definition TV to market. Without minimizing the value of the efforts of such other leaders as Mitsubishi, Panasonic and Sony, TCE has priced its direct-view HDTVs at near breakthrough points, and in doing so, is forcing second-tier competitors to come in even lower.

TCE will further drive the market as it builds up its 16:9 aspect ratio picture tube production and begins offering them to other manufacturers.

The TCE dinghy has more R & D oars in the water than an ancient Roman war galley, and it has them out there fully aware that, as Meyer recently told an audience of journalists, “Obviously, not all of our services will be a hit. But you’ve got to swing at the ball to hit a home run.”

Just as I was finishing this column, the Oct. 23 issue of TWICE arrived with Steve Smith’s report on a meeting in Japan with Matsushita DVD honcho Sakon Nagasaki. In it Nagasaki expresses regret that there is no longer an old-line RCA to push and promote HDTV.

Itis regrettable that there no longer is a single company with the monolithic capabilities and clout of the old RCA. But at least TCE has picked up the leadership torch, along with the brand, and is doing its best to keep the industry moving forward.

Bob Gerson, TWICE editor-at-large, has covered the CE industry for more than 30 years. He is the founding editor of the publication and its longtime editor-in-chief. In recognition of his work, Gerson was presented with one of the first Consumer Electronics Association Lifetime Achievement Awards at CES this year.