RealNetworks Finds Another Place to Play with Intel

RealNetworks Inc. Wednesday scored another endorsement of its seemingly
omnipresent RealPlayer as chipmaker Intel Corp. agreed to make it the player
of choice in its Web appliance.

Like most Web appliances, Intel’s Dot.Station is geared to allow consumers
to surf the Web or send e-mails without having to park in front of a largely
immobile PC. Dot.Station will be primarily sold through service providers.

RealNetworks, which boasts more than 190 million users of its RealPlayer,
said its multimedia tool is often the player of choice because consumer
device manufacturers can deliver VHS-quality video and CD-quality audio to
users at broadband rates.

“Consumer Web appliances represent a new market segment opportunity and we
are excited to be working with Intel,” Len Jordan, senior vice president,
Consumer devices, RealNetworks Inc. “This partnership gives people more ways
to experience their favorite Internet audio and video from nearly any room
in their home.”

Perhaps, but one ought not to turn a blind eye to the fact that Web
appliances aren’t doing all that hot for some companies. 3Com Corp. bailed on its Audrey product and Kerbango radio in March, and doomed
Netpliance coughed up its i-opener product months ago.

Still, Intel is optimistic and said that Dot.Station was created for people
who do not own PCs.

“Though new to the Internet, such novice users still want to see and hear
the rich media content the Web has to offer,” claimed Claude Leglise, vice
president, New Business Group and general manager of Intel’s Home Products

Success of such appliances remains to be seen, and research firm Cahners
In-Stat Group recently said the market will heat up over the next several
years with sales growing over 40 percent per year between 2000 and 2005.
Also, Cahners claims Intel has an advantage as a chipmaker because it
estimates sales of Net appliance microprocessors will jump from $18 million
in 2000 to $91 million in 2005.

RealNetworks is in a can’t lose situation by putting its player in
Dot.Station. Jupiter Media Metrix released a study Monday in which it found
standalone media players — the software that play digital audio or video —
increased 33.2 percent, from 31.3 million in January 2000 to 41.7 million in
January 2001.

The research firm said boosts in bandwidth are catalysts for this increase.

“While aggressive bundling campaigns have long since pushed ownership of
multimedia players to nearly 100 percent, usage over the past year has been
driven by the increasing quality of the user experience,” said Steve Coffey,
executive vice president and chief development officer, Media Metrix, a
Jupiter Media Metrix unit. “Greater connection speeds, more efficient
content delivery, as well as better and more content are among the key
factors that will continue to move this trend forward.”

Moreover, RealNetworks is still the media player market share leader over
rival players Microsoft (Windows Media Player) and Apple (Quicktime). The
research showed that RealNetworks widened its lead among home users through
RealPlayer, as well as its RealJukeBox audio-file player. In January 2001,
25.9 million U.S. Internet users at home used a RealNetworks player, up 47.6
percent from January 2000. Microsoft was next with 21.5 million users, a
31.2 percent increase.

RealNetworks and Intel are both fresh off of impacting the Net industry. The
digital distribution company Monday outlined a plan for a music subscription service, which has since been widely debated.
Intel Tuesday aired a philanthropic initiative to help search
for a cure for cancer using the wonders of supercomputing, or peer-to-peer
(P2P) technology, as the current buzz phrase goes today.

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