NEW YORK, Jan 7 (Reuters) - Attention couch potatoes: The maker of WebTV, the first to marry television and the Internet, is back with a device that lets you play music, television, video and other media in any room in your house from one box.
Ending months of speculation, Steve Perlman, who founded Rearden Steel Technologies, on Monday unveiled the Moxi Media Center, a set-top box that resembles a VCR or cable box.
The box can attach to a television and decode a cable and satellite signal. It would replace the need for a separate DVD player, CD player, personal video recorder and digital music system, and the stack of remote controls that go along with them, It can store music from hundreds of CDs.
"Instead of having all these devices that nobody can figure out how to hook up in different rooms around the house, you have just one box," Perlman told Reuters.
Perhaps as important as the box itself, Rearden, which is changing its name to Moxi Digital Inc., also announced a partnership with satellite TV provider EchoStar Communications Corp. (NasdaqNM:DISH - news). The deal is expected to bring the set-top boxes into customer homes by 2003. While details of the deal were not disclosed, EchoStar will buy the boxes from Moxie.
P.J. McNealy, research director at GartnerG2, said the Moxi system is a "generational jump" over the current installed base of boxes, adding the EchoStar partnership gives the new company a jump-start.
"We've seen other boxes, but this one is the first that is backed by a major player," he said. "If they are successful going after the potential EchoStar-DirecTV crowd, that has the disposable cash for entertainment services, that makes them pretty powerful."
Moxi Digital also plans to design hardware, software and networking products to streamline digital entertainment.
Analysts said the company, based in Palo Alto, California, will benefit both from Perlman's connections and from possible alliances with its high-profile backers.
They include Cisco Systems Inc. (NasdaqNM:CSCO - news), AOL Time Warner Inc. (NYSE:AOL - news), and Vulcan Ventures, the investment arm of Microsoft Corp. (NasdaqNM:MSFT - news) co-founder Paul Allen, whose Charter Communications Inc. (NasdaqNM:CHTR - news) is the nation's fourth-largest cable operator.
Perlman sold WebTV to Microsoft for $425 million in 1997.
FUTURE IN CABLE
"The combination of Perlman's experience and charisma is certainly going to be quite valuable, but in the end, it's the relationships with cable and satellite operators that will make all the difference," Forrester Group analyst John Burnham said.
"While it doesn't prove that this (Moxi) going to get deployed in Charter and Time Warner Cable, it certainly makes it likely," he added.
The Moxi system can be enhanced with Media Center Extensions, devices about the size of a hardcover novel that distribute the power to control entertainment options around the home.
Using either a wired or wireless system, the extensions provide the capability to offer a television or audio program playing in the main room in other rooms, Perlman said.
Home networking is a major theme expected this week at the consumer electronics show in Las Vegas. As more home are wired with faster Internet connections, electronics makers and programmers hope multimedia centers will allow consumers to buy, download and store movies and music with a touch of a remote control.
The box is expected to add more features in the future, letting people buy or rent movies or general merchandise directly through the boxes. Also, they could eventually play online games or make Internet-based phone calls.
Forrester Research estimates that these "entertainment gateways" will be in 14 million households by 2006. But PC-driven gateways and game-driven electronics, such as Microsoft's Xbox, may also score a sizable portion of the Home Network market.
Experts said the box is a first step for Moxi and its rivals, who will not sell them directly to the public. Instead, they are expected to be purchased by cable and satellite TV providers, which have slowly upgraded systems and offered technical enhancements to allow for more powerful set-top boxes to consumers.