Intel Reaches Peaceful Answer To ‘Eyeball War’ Company’s Turnaround Will Speed Development Of New Breed Of TV

Suing for peace in the “war for eyeballs,” Intel Corp. officials said they will adapt computers to the next generation of TV broadcasts, rather than trying to force TV stations to adapt their broadcasts to computers.

The turnaround by the Santa Clara chip giant, which some analysts said was inevitable, should speed the development of a new breed of television that combines digital pictures with Internet-style information. This hybrid of TV and PC is already starting to appear through products like Microsoft’s Web TV and digital cable.

Intel’s goal, like that of Microsoft and the rest of the computer industry, is to sell more computer-like devices to consumers. To do so, however, the computer industry has to convince the broadcasters and cable companies that the public wants television to be more interactive or personalized - in other words, more like computers.

Its first pitch to the broadcasters - made last spring - was essentially an effort to dictate terms. Last week, Intel officials outlined a more conciliatory package, emphasizing their shared interest with broadcasters in promoting an enhanced version of television.

The company also has applied for a federal broadcasting license to conduct low-power tests of its digital TV products, using a rooftop antenna at its Santa Clara headquarters. The transmissions, done on a rotating series of vacant channels, will be in a format that conventional sets cannot receive.

Most television signals today are analog, meaning that the pictures and sound are transformed into electronic pulses and transmitted in waves. With digital technology, TV pictures and sounds are converted to the ones and zeros of computer data and transmitted in packets - a change that allows better reception, higher-fidelity sound and a host of accompanying features.

The Federal Communications Commission has ordered the broadcasters to convert to digital, with the first transmissions expected to begin in November 1998. The cable industry is starting to phase in digital technology, too, and the satellite industry has already made the leap.

One of the problems posed by the switch to digital is that today’s television sets cannot read a digital signal. Instead, those signals demand a costly digital monitor - the projected prices are $3,000 or more above a conventional large-screen television - or a converter box.

In April, Intel, Microsoft and Compaq Computer Corp. made an aggressive pitch to the broadcasters’ annual convention in favor of a computer-friendly approach to digital television. They argued that while digital TV sets will trickle into homes, millions of new computers could receive digital TV in 1998 - but only if the broadcasters used the “progressive scanning” format employed by computer monitors instead of the “interlaced scanning” format used by television sets.

Andy Grove, Intel’s chief executive, described the confrontation between the TV and computer industries as a “war for eyeballs.” And officials from Compaq and Microsoft warned the broadcasters that they’d lose a huge potential audience if they did not follow the computer industry’s lead.

The broadcasters were unmoved, however, and last Thursday, Intel officials conceded defeat - at least for the time being.