January 26, 2001, 3:35 PM — (REUTERS) -- Internet media software company RealNetworks Inc. said on Sunday that Texas Instruments Inc. , the top maker of chips for mobile phones and devices, will license its technology for playing audio and video on such gadgets.
The deal marks another step by Seattle-based Real into the fast-growing market for mobile devices, which some analysts forecast will eclipse personal computers as the main onramps to the Internet within a few years.
Under the deal, TI will build Real's technology into its chips, known as digital signal processors, or DSPs, that are being fitted in everything from cell phones to portable digital music players.
"It is very important step to us because TI is the leader in providing DSP technology for mobile phones, mobile music devices," Len Jordan, Real's senior vice president for consumer appliances, said in an interview.
"The advantage of the relationship is that we can be basically pre-installed in these devices ... so as they start distributing their DSPs, we benefit," Jordan said.
Real makes the popular RealPlayer software that enables a computer to play audio and video transmitted, or "streamed" over the Internet or that is stored on that machine.
Building that capability directly into a chip can help cut energy consumption -- a big concern for mobile devices that run on batteries, Jordan said.
Jordan did not provide forecasts of how many Real-equipped chips TI expected to sell, but noted that last week, the Dallas-based company said it had shipped 2 million audio DSPs by late November.
Within three to four years, mobile devices with Internet connections are expected to number around 500 million, Jordan said, citing analyst forecasts. That compares with about 300 million computers with Web connections today, he said.
"We enjoy a very high market share on PCs today," Jordan said. "The opportunity in mobile devices is even broader. We're in very good shape to lead in the mobile and phone space."
Shares in Real shed 13/16, or 10 percent, to close at $7-1/32 on the Nasdaq on Friday. The stock is off its year high of $96, battered by slowing PC sales and a slumping online advertising market.
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