Apple, Philips look to CD-ROMs to fill telecoms gap

Philips Consumer Electronics and Apple are each moving ahead with Internet terminal plans, and adding in CD-ROM technology.

Philips Consumer Electronics and Apple are each moving ahead with their Internet terminal plans, and adding in CD-ROM technology.

Apple's Pippin architecture and Philip's CDi-Online project are designed to provide consumers with multimedia terminals at current modem speeds of 28.8kbit/s. By storing video, audio and animation on a CD-ROM drive and updating data interactively over the Internet, the companies hope to give the user the experience of using tomorrow's broadband networks but today's technology.

While the companies have been working separately, the solutions are similar, consisting of a box with a processor, a modem and a CD-ROM player and designed to work with standard television sets. Apple is emphasising that Pippin is an architecture, not a product, and last week licensed the technology to the Norwegian CD-ROM publisher, Katz Media AS.

Apple licensed the technology earlier this year to Bandai of Japan, which is planning to launch a Pippin-based terminal called Atmark in the US market in September.

Pippin will comply with network computer standards when an NC specification is frozen in the third quarter, according to company officials. It will be upgraded to work with forthcoming Digital Video Disk (DVD) drives when those products arrive on the market later this year.

Meanwhile, Philips recently began testing its CDi-Online product with Regio Eindhoven Digitaal (RED), the company managing the "smart city" project in Eindhoven, Netherlands. So far Dutch banks ABN and Rabo, food store chains Albert-Hein and Vaneerd, and the Eindhoven town hall have signed up to provide online shopping, services and information with the CDi-Online product.

Philips is providing managed Web servers, RED is providing the network connection, and the companies on the network are providing the finance to author CDs of their virtual malls.

"The idea is simple," says Henk Bodt, chairman and CEO of Philips Consumer Electronics. "We will store the data-intensive information on CD and update the text online. With the combination of the CDi and modem, you can cheat a full broadband network. For instance, customers will enter the bank online and virtual reality software on the CD will provide the look and feel of the site, and the network connection will provide the data."

For RED, CDi-Online provides a stopgap between the existing standard telephone network and full fibre-optic or broadband networks of tomorrow. "We intend to implement a three-phase smart network," says Kees Rovers, founder and general manager of RED. "First, we will provide users with CDi- Online, then we will migrate them to Digital Video Disk and finally to a fully broadband network."

Neither Philips or Apple expects that online CD-ROM will be here forever. "I believe that CDi Online has a product life cycle of five to 10 years," says Bodt.

Many believe that it will be some time before full broadband networks arrive in Europe, so these products along with others may well provide an interim solution. "It may be a decade before there is a pan-European broadband network," says Thomas Ramsey, a Brussels-based attorney, who specialises in European regulatory issues with Squire, Sanders & Dempsey. "The regulatory landscape is still a nightmare," he says.

Pricing and availability for CDi-Online are not yet available. Katz Media's terminals will be available in the third quarter of this year priced between US$600 and US$700.

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