Samsung, AOL to build new set-top boxes

AOL Time Warner and electronics manufacturer Samsung Electronics agreed on Tuesday to jointly develop and market the media company's next-generation set-top box and other consumer electronic products.

In a multi-year agreement, AOL Time Warner and Samsung plan to develop a more advanced version of AOLTV -- a Web-based, interactive television platform that allows users to browse the Internet as well as send e-mail and instant messages. AOL also said it will include in future versions of its service digital video recording (DVR) technology from TiVo Inc., a hard-drive that performs VCR-like functions on live television.

AOL Time Warner owns a stake in TiVo but has yet to use its DVR technology in its interactive television service. The company has hinted that it plans to integrate TiVo's technology -- as well as access to satellite programming from Hughes Electronics Corp.'s DirecTV -- into the AOLTV service since first investing in TiVo in 1999. The company added another US$200 million to that investment a year later noting that it would add the TiVo technology sometime this year.

The current version of AOL Time Warner's set-top box is manufactured by Dutch Philips Electronics NV.

In May, TiVo won a series of patents for its technology, setting the company up well against its competitors such as Microsoft, with its Ultimate TV platform, and ReplayTV, which quit making hardware to focus on licensing its DVR platform to cable operators and other set-top box makers.

But the market for more advanced interactive TV devices has been slow to reach consumers. Cable providers such as AT&T Corp. have significantly pared down the functions they plan to offer viewers in the near future. AT&T scaled down its interactive television deal with Microsoft last month, noting that consumers were not yet ready for advanced set-top boxes.

In addition to set-top boxes, the two companies have agreed to research and develop a range of future consumer electronics products such as Web terminals and e-mail printers. AOL Time Warner also said it would promote Samsung across its media service in print, online and broadcast advertisements.

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