"Web TVs" look to be the technology gift of choice this holiday season, as several recent surveys reveal a strong consumer interest in accessing the Internet through the television set. Many leading electronics firms are gearing up for the demand with a variety of products and announcements.

"Retailers are already reporting strong sales, and they predict our units will be moving off shelves even faster as we approach Christmas," said Ed Volkwein, senior vice president for marketing at Philips Consumer Electronics Co. (Knoxville, Tenn.), of the company's Web-surfing set-top box.

A recent Yankelovich Partners survey found that 52 percent of Internet users would prefer to access the network by TV rather than PC. "Consumer receptivity to TV Internet access is surprisingly strong," said Hal Quinley, a partner at the research firm, here.

A related study by Frost & Sullivan (Mountain View, Calif.) predicts that what it terms "interactive television" service and advertising revenues will be a $12.87 billion market by the end of 2002. "The merger of television and the Internet is under way," said the survey.

Accordingly, the holiday season will see many major companies playing Santa in this convergence arena, rolling out products that defy categorization, from hybrid PC/TVs to Net-connected game players and set-top boxes that work with existing TVs.

The latter, from companies like Philips and Sony Electronics Inc. (Park Ridge, N.J.), is expected to be the market star, at least initially. Most observers believe the combo PC/TVs are still too expensive -- models from Gateway 2000 run $3,000 to $4,500 -- while gaming add-ons are largely pitched to a narrow market of young teenagers. Such products include Sega Enterprises Ltd.'s $199 Sega Saturn Net Link cartridge, which includes a modem, and Apple Computer Inc.'s Pippin game player, which was built by Japan's Bandai.

Despite all the activity, the Net's invasion of the consumer market is not a sure thing, sources said, and even the major players fret that Web content will fail to dazzle TV viewers. "Most people are going to be disappointed when they plug in their TV browsers," said John Aronsohn, senior analyst with the Yankee Group research firm in Boston. "For the most part, Web content is best suited to be viewed on a PC."

Indeed, "if you just cut and paste the Internet on TV, viewers will be fascinated with it for about four weeks," said Alan McKeon, president of ViewCall America Inc., the Norcross, Ga., developer of the On-TV Internet service. The com-pany recently announced an agreement with Mitsubishi Consumer Electronics America Inc., also based in Norcross, to bundle On-TV with 1 million of Mitsubishi's Internet-ready DiamondWeb TVs. Other consumer-electronics companies, such as Samsung and Zenith, also plan to market Internet-ready sets over the next few months.

But Volkwein at Philips called the new method of accessing the Internet the "start of a new American tradition. Imagine," he enthused, "a family gathered around the television on Christmas morning using the new terminal to send holiday e-mail greetings to friends around the world."

The devices that appear poised to generate the most demand are set-top boxes from the likes of Sony and Philips. Both are marketing Web-cruising boxes developed by startup WebTV Networks Inc. (Palo Alto), which provides a new network designed for unlimited access to the Internet via the television set.

List prices of $329 for Philips's Magnavox unit and $349 for the Sony Internet Terminal suggest to some industry watchers that the cost of getting on the Net could quickly drop below $300 if the products prove successful.

Indeed, Thomson Consumer Electronics (Indianapolis) plans to introduce a $300 set-top Internet-access product in the spring of 1997. As co-developer of the RCA Digital Satellite System, which is expected to rack up unit sales of 3 million systems by the end of the year, Thomson is in position to take advantage of satellite Internet access.

The new breed of Net-ready set-top boxes plugs directly into a telephone line on one end and a TV or VCR on the other. Internet services from both WebTV and ViewCall run $19.95 a month for unlimited access. ViewCall predicts the company will see 2.5 million subscribers by the end of 1997.

Source: Electronic Engineering Times