Reuters On TI’s New Competition

Texas Instruments was in Hollywood this week to show film industry executives, reporters and cinematographers a projection system it calls “DLP Cinema” that is based on a TI “2K” microchip.

The Dallas-based company’s presentation follows by one day a similar demonstration by Sony Electronics in which it showed a new Sony projector using its own “4K” chip it claims offers picture resolution and contrast superior to 2K technology.

Sony’s projectors are a new entry in the still-developing market for digital projection — also known as digital cinema — that has been dominated by Texas Instruments since its inception in the late 1990s.

“I don’t think it changes anything,” said Doug Darrow, business manager of DLP Cinema. “We have achieved a quality level that is significant for the deployment of digital cinema.”

Darrow said the projection of movies using digital systems based on TI’s 2K chip is now equal to the best film picture on the best projection system in theaters and better than an average film picture in an average cinema multiplex.

Moreover, DLP Cinema projection systems are already being produced by manufacturers such as privately held Christie Digital Systems Inc, and Belgium’s Barco NV (BARBt.BR: Quote, Profile, Research) and Japan’s NEC Corp . Darrow said the DLP systems have proven to be “reliable and robust” in real theaters.

Sony was showing a prototype projector that won’t be ready for production until January 2005, and as a result is untested in real world applications.

Still, the market for digital projection systems isn’t expected to begin seeing significant signs of growth until next year at the earliest because technical standards and a business model supported by theater owners has yet to materialize.

Digital projection holds the promise of better picture quality for moviegoers and lower distribution costs for Hollywood’s studios.

The market could be lucrative for manufacturers as the cost of one digital system is estimated at around $100,000 per theater screen, currently. There were more than 35,100 indoor theater screens in United States at the end of 2003, according to the National Association of Theater owners..

Source: Reuters