Funai Makes Tru2way Play

Funai Electric Co. Ltd. (OTC: FUAIY), the company behind brands such as Sylvania, Magnavox, Philco, Symphonic, and Emerson, plans to launch a tru2way dual-tuner combined DVR/set-top box that will be distributed through retail outlets and its MSO partners.

But the Japanese electronics firm, which signed the tru2way “memorandum of understanding” in the summer of 2008, will wait to see how consumers react to the introduction of tru2way technology before it makes any attempt to integrate tru2way into its flat-panel hi-def TV sets.

Although one goal of tru2way is to develop digital TVs that can handle video-on-demand and other interactive cable applications, Funai is entering the sector with a high-definition DVR box that uses a tru2way middleware stack from Vividlogic . (See LG, Funai Sign tru2way MOU and Revealed: The Tru2way MOU.)

Funai will show off the combined DVR/set-top box in Las Vegas at next month's Consumer Electronics Show (CES). The company plans to start mass production during the third quarter of 2009, a timeframe that hinges on Funai’s ability to get the product certified at CableLabs , notes Dwight Sakuma, the company's senior consultant for new business development.

Once Funai gains certification on that initial product, it might look to complement it with an HD-based model without an on-board DVR, or possibly develop a tru2way box with an integrated Blu-ray player. However, a tru2way box with integrated HD-DVR support “is the sweet spot” for Funai’s cable product strategy, Sakuma says.

In terms of distribution, Funai will seek to sell boxes directly to MSOs as well as target consumers directly. “We’ll be going after both simultaneously… [but] we see retail as, eventually, the way a lot of tru2way products will be sold,” says Sakuma, who was at Motorola Inc. (NYSE: MOT) when that company developed the DCP501, a retail-focused cable set-top/home theater system.

He says Funai’s discussions with U.S. cable operators are still in the preliminary stages.

Which brand will grace Funai’s tru2way boxes will be determined by geographic location and sales channel. Funai, for example, uses the Sylvania brand in products it sells through Sears, and uses the Emerson label on gear it distributes through Wal-Mart. Funai might also look to co-brand with incumbent cable operators.

While companies like EchoStar Corp. LLC (Nasdaq: SATS) plan to incorporate “place-shifting” features from Sling Media Inc. to develop product differentiation in the tru2way market, Funai will attempt to stand out by delivering low-cost products with “better pricing structure” for MSOs and consumers, Sakuma says. (See EchoStar Blazing Way to Tru2way .)

Funai hasn’t released any pricing on its first tru2way product, but some of those details could be revealed at CES.

Tru2way TVs? Not yet
The timing of Funai's potential entry into the tru2way TV market will be based on consumer appetite. For now, there’s little data to turn to, as Comcast Corp. (Nasdaq: CMCSA, CMCSK) and Panasonic have only just launched their tru2way TV offerings, and in only two markets. (See Denver, Chicago First to Get Tru2way TVs and Tru2way TVs Hit Denver.)

“As we start to see market demand for tru2way-enabled HDTVs, Funai will then [decide] when we will incorporate tru2way into our various HDTV lines. We would like to be more cautious,” Sakuma says. “From a time-to-market perspective, we thought a set-top configuration would be more desirable."

— Jeff Baumgartner, Site Editor, Cable Digital News