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For Intel Talk's Not Cheap

By Chet Dembeck
May 10, 1999 12:00 AM PT

Intel Corp. plans to talk its way into the booming e-commerce business -- but it's finding others have the same idea.

For Intel Talk's Not Cheap

On May 6, the giant Santa Clara, California-based computer-chip maker pumped a cool $30 million (US$) into a joint venture with Lemout & Hauspie Speech Products NV, Europe's largest speech-recognition software maker. The partnership's goal is to quickly develop products that let consumers use simple voice commands to buy and sell items over the Internet.

Intel now corners about 85 percent the microprocessor market, but it's been forcefully moving into the e-commerce arena over the last year. This deal, which gives Intel 51 percent ownership of the venture shows that Intel realizes the burgeoning e-commerce economy may never reach it's potential -- if e-commerce can't tap into the mass market.

Revenue from e-commerce is estimated to grow from about $6 billion in 1998 to as much as $271 billion in the U.S. and Europe by 2001, according to Forrester Research, Inc. Yet, some analysts say this is wishful thinking if two things don't happen first: The price of computers fall to about $200 and voice command software replace clumsy keyboards.

This venture gives Intel a 3 percent to 4 percent stake in L&H, but one U.S. company has already beaten Intel to the punch: Microsoft Corp. has invested a total of $60 million in L&H -- for a 7 percent stake.

While some voice recognition programs already exist, none-so-far have worked reliably enough with existing e-commerce technology. Until they do, industry experts say e-commerce will be a marketplace frequented only the educated and affluent.

Meanwhile, the race over which company will be first to develop reliable voice recognition for e-commerce just got tighter.

IBM, the computer making giant, and Philips, the huge consumer electronics manufacturer also announced last week that they're joining forces to quickly develop the same kind of voice command technology.

Formidable Competition for Intel

Philips, which co-invented the CD with Sony, has already developed several, successful voice recognition programs for PCs, while IBM is forming a different alliance every week to position itself firmly on the e-commerce playing field.

When the dust finally settles, only one thing seems certain: Average consumers will be ordering items from their favorite e-commerce Web sites by simply talking to their computers.

What do you think? Let's talk about it.

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