AMSTERDAM -- Opera Software today challenged Microsoft in another business area: set-top boxes (STB). A STB running Microsoft's operating systems inside will cost over $300. By combining Opera and Linux, STBs at one-third of that price are now within reach for the residential market. Moving from Microsoft to Opera-enabled Linux STBs based on open standards will save the iTV industry's operators hundreds of millions of dollars, providing improvements and saved costs in all parts of the value chain. Opera's entry into this market is met with excitement from industry insiders.

In STBs Opera functions as more than just a Web browser. Opera's technology is used as a HTML presentation engine that executes the majority of navigational functions and renders content. Operators can now move away from Microsoft's offering that requires expensive middleware or is built on closed, proprietary standards. By enabling low-cost, standards-based STBs, Opera is paving the way for iTV finally becoming an attractive mass-market for operators. In a double-whammy, cost in the long-term is also reduced. Operators' content can be produced in HTML, significantly cheaper than using special proprietary standards.

"The high price of running Microsoft inside set-top boxes is stopping the iTV market from taking off. Microsoft has avoided the issue of the final product's price in their sales pitch," says Jon S. von Tetzchner, CEO, Opera Software ASA. "European and Asian operators are now realizing this, and looking for alternatives."

Analysts agree that lowering STB prices is vital for the industry to evolve.

"Previously we have said that for mass deployment of IP/DSL set top boxes to occur, prices need to be less than $200. Pricing below $100 is even better for operators' business case for launching video services," says Michelle Abraham, Senior Analyst, In-Stat/MDR. "By 2007 we expect shipments of 8 million IP/DSL set top boxes annually and price will definitely be a critical factor for this prediction to hold true."

The industry is ready to provide cheaper STBs. One of Germany's leading designers of IP-based STBs, LechValley, has recently won significant deals in Germany, Austria and India. LechValley's solution for the IP-TV market is based on the well known and proven embedded JNT (Java Network Technology) system, developed by the German powerhouse Infomatec since 1995.

"Given an order of significant volume for residential IP TV market, there is new silicon architectures out there that can achieve a sub $100 price point," says Joachim Kline, director of sales, LechValley. "But it is the combination of Linux and Opera that makes this all possible."

Opera's use of Linux and open standards has the community excited.

"Opera's Linux based solution provides an economical business model for both the short-and long-term," says Dennis Thompson, Chairman, TV Linux Alliance. "Using Linux-based alternatives together with open standards produces economical platforms, therefore delivering the benefits of open standards to everyone in the value chain."

Opera Software ASA