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TI sees telephony driving Internet

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CIOL Bureau
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Ben Berkowitz



SAN FRANCISCO: Texas Instruments Inc. is betting that Internet telephony will be the next major application to drive broadband connections into peoples' homes, Chief Executive Rich Templeton said on Tuesday.



The world's largest maker of chips for cell phones believes the technology that allows people to make voice calls over the Internet, known as voice-over-Internet Protocol (VoIP), will grow rapidly from the relatively small user base it has today.



"I really believe voice-over-packet is going to be the second killer application after broadband Internet access," Templeton told a gathering of analysts and reporters.



Companies like Vonage have made steady inroads in the United States by offering competitive VoIP packages of local and long-distance calling, with advanced features like voice mail and caller ID, at low rates with existing phone hardware.



But what will make VoIP really take off, one of Templeton's colleagues said, is when the whole process becomes transparent and people do not realize they are specially making a call over the Internet.



"It's not about the pipe, if you will, or the silicon per se, it's about the application," said Bill Simmelink, general manager of TI's VoIP business, which makes chips for Internet telephony equipment. "We want to communicate freely, effortlessly and economically wherever we are."



Their comments came a day after the company trimmed its first-quarter profit forecast because customers were cutting back orders for television chips. TI backs a standard for high-definition, thin-and-light televisions called digital light processing, or DLP.



Templeton said it was just a hitch and stood by the potential of the television market, even as prices plunge for competing technologies like LCD screens.



"You will watch an inferior show to see a superior display," he said.



In a wide-ranging conversation, Templeton also touched on the developing WiMax standard, which promises high-speed Internet access spread over a distance of many miles. Some see WiMax as a threat to high-speed cellular networks, both for data and voice calling.



WiMax backer Intel Corp. recently said the size of the industry forum promoting WiMax had grown dramatically.



"I won't dispute forum size but I like to see operators say 'here's our multibillion-dollar spending plan,'" Templeton said. "I think you'll find the financial model of WiMax challenged even on a cost-per-bit basis."

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