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Pushed lastly into unprofitability in its conventional market by ever stiffer competitors from overseas, harmed relatively than helped by a decade of economizing cutbacks in analysis and growth, Zenith Electronics Corp.—the only real surviving U.S. producer of tv receivers—reportedly plans to name it quits within the enterprise it helped to create and nourish via some 40 years of innovation.
Certainly, nothing so neatly displays the corporate’s current state of affairs as its newest and arguably its second biggest innovation: a flat shadow masks for a flat-faced cathode ray tube hailed all over the place as a significant breakthrough. Introduced in 1986, the
Flat Pressure Masks, as it’s referred to as, will increase the brightness of the cathode ray tube by as much as 80 p.c, its distinction ratio by as much as 70 p.c, and its decision by as much as 15 p.c over present tube designs, which use a curved face plate and curved shadow masks. The flat masks is stretched so tight that it may preserve colour high quality even when heated erratically by excessive concentrations of electrons in shiny areas of the image.
This text was first revealed as “The longest survivor loses its grip.” It appeared within the August 1988 situation of IEEE Spectrum. A PDF model is out there on IEEE Xplore. The images appeared within the unique print model.
Such a product exemplifies Zenith’s pursuit of top quality, even when that has meant sticking to the excessive finish of the market. Its tube plant in Melrose Park, Sick., is among the most worthwhile components of its enterprise, bearing witness to the corporate’s manufacturing abilities. However at about $1000, the flat tube just isn’t a client product and as a substitute is benefiting Zenith’s newest focus of interest-its comparatively new and extremely worthwhile private laptop enterprise.
The TV period ends
The tv market was fairly totally different again in 1960. Then, the Glenview, Sick., firm tussled for the No. 1 spot with RCA Corp., of New York Metropolis, every holding over 20 p.c of the home market. Twenty-five different firms, reminiscent of Admiral, GTE Sylvania, and Magnavox, shared the remainder of the enterprise. However one after the other, these firms both folded their tv divisions or bought them to non-U.S. rivals till, by the top of 1987, solely Zenith remained.
The corporate’s main considerations final 12 months have been summarized in its annual report: “Lengthy-anticipated trade value stability didn’t materialize in 1987 due to continued dumping by Far Jap suppliers, ineffective dumping legislation administration by our authorities, and the failure of Korea and different newly industrialized Far East international locations to revalue their currencies.” These difficulties within the client space led to a company pretax lack of $28.9 million, regardless of an working revenue that analysts estimate at $70 million from its profitable laptop enterprise.
Zenith has not formally confirmed that its tv enterprise is on the public sale block, confining itself merely to the assertion that it’s analyzing “all choices to revive company profitability to a passable stage.” However Lazard Freres & Co., of New York Metropolis, is reportedly accepting bids on behalf of the corporate for all the client electronics division.
The Evolution of Zenith (and the TV Trade)
1918
Chicago Radio Laboratory established; later adopts as its commerce title Z-Nth, the identification of an novice radio station.
1924
Zenith produces the world’s first transportable radio, which incorporates massive batteries, vacuum tubes, and a horn speaker; an early mannequin is right here being held by Admiral Donald B. McMillan.
1926
Zenith manufactures the primary business hi fi to function on ac.
1940-41
A prototype of the Trans Oceanic receiver undergoes profitable area testing within the Arctic.
1945
The Tv Broadcasters Affiliation experiences TV units bought in america earlier than World Conflict II totaled 10,000.
1947
Almost 200 000 TV units bought, together with greater than 115,000 desk fashions, 37,000 consoles, 12,000 projection varieties and 25,000 consoles with radio/phonograph. 9 U.S. producers exhibit new fashions on the 1947 Chicago Furnishings Mart.
1948
Zenith enters the TV receiver enterprise, shopping for Rauland of Chicago, an image tube producer. All informed, 31 U.S. TV makers promote 103 fashions.
1953
Zenith and 12 different TV producers show NTSC-based colour TV receivers to the FCC.
1955
Zenith develops prototype colour TV with distant management.
1956
Zenith patents first distant management for a TV set, the ultrasonic Area Command.
1957
Zenith patents fringe-lock expertise, a treatment for lack of image synchronization.
1959
6,300,500 units promote this 12 months, down from 1955’s peak of seven,700,000 and from 1950’s 7,300,100.
1960
(27 U.S. TV producers recorded—the countdown begins.)
1964
Zenith patents Chromacolor, or “black matrix” expertise, however doesn’t introduce it till 1969.
1968
(18 U.S. TV makers stay after Westinghouse Electrical, Capehart, Conrac, Dumont, Hoffman, Mattison, Olympic, Symphonica, and TraVler drop out of TV enterprise.)
1969
(Admiral buys Cortron, leaving 17 U.S. TV makers.)
1970-74
(12 U.S. TV makers left alter departure of Emerson, Arvin, Satchel-Carlson, TMA, and Teledyne Packard Bell.)
1971
Zenith opens its first non-U.S. manufacturing amenities, in Matamoros, Mexico, and in Taiwan, and patents surface-wave intermediate-frequency filter.
1973
Zenith introduces Energy Sentry, the primary client use of a saturable-core transformer to manage voltage.
1974
(9 U.S. TV makers left after North American Philips buys Magnavox Client Electronics, Matsushita Electrical Industrial of Japan buys Motorola’s tv enterprise plus its Quasar model title, and GTE Sylvania buys Philco trademark.)
1975
Zenith introduces first one-chip colour demodulator and TV units with Zoom characteristic.
1976
Zenith improve pretax income by $27 million over 1975 complete of $978 million.
1976
(Sanyo Electrical of Japan buys TV enterprise from Warwick Electronics; Andrea Radia, a small New York-area family-owned firm, fades from the market.)
1977
Zenith halves R&D employees, shedding about 200 engineers.
1978
Zenith opens manufacturing plant in Reynosa, Mexico.
1978
(Six U.S. TV makers left when Admiral Group, by now a Rockwell subsidiary, leaves TV enterprise.)
1979
Zenith introduces first microprocessor-based tuning system and first cable-ready receiver; buys Heath to get into the non-public laptop enterprise.
1980
Zenith introduces Spacephone, which lets viewer reply telephone via TV set.
1981
(5 U.S. TV makers left after Philips buys GTE Sylvania.)
1982
Zenith strikes from ultrasound to infrared expertise for its distant controls.
1984
Zenith’s scheme for stereo TV, Multi-channel Tv Sound, is accepted because the trade normal.
1984
(Wells-Gardner and Curtis-Mathes manufacturers now not in TV enterprise)
1986
(GE buys RCA.)
1987
(GE sells GE/RCA client electronics enterprise to France’s Thomson CSF; Zenith is just U.S. TV producer left.
1987
Zenith pronounces Flat Pressure Masks, a breakthrough in cathode ray tube expertise; loses cash in client electronics for the primary time.
1987
Zenith cuts R&D employees, shedding 60 engineers.
1988
Zenith client electronics division is reported to be up on the market.
Editor’s observe: Zenith’s final 12 months of profitability was 1988. In 1991, Fortunate-Goldstar, now generally known as LG, bought 5 p.c of the corporate. In 1995, LG bought a majority share. In 1999, Zenith filed for Chapter 11 chapter, and LG acquired the rest of the corporate.
Stockholder stress on the corporate to promote might have elevated from an funding partnership that has acquired 7.1 p.c of Zenith’s inventory and has introduced its intent to pressure Zenith to “improve shareholder worth.” Analysts presume the partnership plans to pressure the sale of the patron electronics unit.
Lively contenders for the acquisition reportedly embody the 4 main Korean firms—
Samsung Electronics Co., Daewoo Corp., Fortunate-Goldstar Corp., and Hyundai Electronics Corp. Every would revenue from stronger U.S. distribution and a U.S. model title, and every would discover the endemically small revenue margins of the TV market fairly suitable with its long-term outlook. Thomson CSF of France has additionally reportedly entered a bid; it not too long ago bought RCA/GE’s client electronics division with the commentary that “quantity is among the guidelines of the cost-competitiveness recreation.” NV Philips of the Netherlands, analysts report, is one other possible contender.
A lot of the Japanese client electronics firms have already got a powerful U.S. presence, and solely certainly one of them is claimed to have made a bid. The
Worldwide Brotherhood of Electrical Employees, the union representing many Zenith workers, has additionally expressed curiosity in bidding, however appears not but to have executed so.
“If you’re in a balloon drifting throughout the ocean, and you recognize that there can be cannibals ready while you attain land, when you begin sinking you continue to throw out every little thing, together with the weapons and ammunition, as a result of when you don’t get to shore, it received’t matter when you’ve got weapons or not.”
—Robert Adler, former Zenith Vice President of Analysis
The winds of change began blowing within the Seventies, when Zenith led the battle to protect the U.S. TV trade from Japanese advances. By court docket motion and proposed Congressional laws, the then Zenith president John Nevin turned a well-known nationwide determine as he pressed the case for defense in opposition to alleged dumping.
When such pleas proved futile, the corporate took drastic actions to take care of profitability—notably a halving of its analysis employees in 1977. “Many people couldn’t perceive how Zenith might blow away its analysis division,” recalled Alan Sobel, one of many engineers laid off at the moment and at present with Lucitron Inc., of Evanston, Sick. Sobel remembers the then vp of analysis, Robert Adler, explaining it “to us this manner: ‘If you’re in a balloon drifting throughout the ocean, and you recognize that there can be cannibals ready while you attain land, when you begin sinking you continue to throw out every little thing, together with the weapons and ammunition, as a result of when you don’t get to shore, it received’t matter when you’ve got weapons or not.’ ,”
Zenith guess that videodisk gamers, relatively than videocassette recorders (VCRs), can be the customers’ selection.
The 200 or so analysis engineers and technicians who survived the 1977 layoff have been then assigned targets that usually proved off base. For instance, like its U.S. rivals, Zenith guess that videodisk gamers, relatively than videocassette recorders (VCRs), can be the customers’ selection. The corporate began and stopped its videodisk analysis program twice between 1971 and 1974, then ended up shopping for VCRs to resell below its personal title. Zenith at first selected to go along with the Betamax VCR format, shopping for models from Tokyo’s
Sony. However after the U.S. market demonstrated its desire for VHS, the corporate switched to promoting VHS VCRs from JVC of Yokohama. Zenith boasts that these Japanese-made VCRs have extra enter from a U.S. firm than another fashions available on the market, as a result of it manufactures the tuner and distant controls in Mexico and provides them to Japan.
One other sturdy however maybe untimely effort centered on digital TV. “We put a number of engineering right into a digital chassis,” one engineer recalled, however within the early Nineteen Eighties “folks simply weren’t … as a result of most couldn’t actually see the distinction in image high quality.” Zenith says its gross sales have been aggressive with these of the remainder of the digital TV trade, however admits the trade as an entire is just now starting to take off.
Massive screens—image tubes with diagonals of 35 inches (90 centimeters) or extra—weren’t pursued due to an unwillingness to take a position $0.5 million in retooling its manufacturing amenities.
In accordance with one other engineer, massive screens—image tubes with diagonals of 35 inches (90 centimeters) or extra—weren’t pursued due to an unwillingness to take a position $0.5 million in retooling its manufacturing amenities, then and now restricted to a most display diagonal of 27 in.
Zenith’s substantial declare to fame within the early Nineteen Eighties was its function within the growth of the U.S. trade normal for stereo tv broadcasting, endorsed by the Federal Communications Fee (FCC) in 1984. Zenith gave this expertise to the trade royalty-free, and acquired a 1985 Emmy for this work.
The R&D employees, in a burst of cost-cutting through the third quarter of 1987, was reportedly decreased by one other 60 p.c to some 20 engineers, although this quantity is difficult to confirm as a result of they now not work in a analysis laboratory however have been scattered all through the corporate. Zenith employees members report that the corporate deserted most work on superior colour image tubes (though a Zenith spokesman denies this, indicating that work continues on colour tube enhancements in addition to on the Flat Pressure Masks). The identical staffers, nonetheless, say Zenith continued work, albeit on a decreased scale, on interactive tv applied sciences, digital tv, and high-definition tv (HDTV). Some analysts recommend, although, that Zenith might now not be within the technical place to design HDTV merchandise.
When it was nonetheless hoping the U.S. Congress would ease aggressive pressures on TV producers, Zenith started to hedge its bets by diversifying. An organization spokesman mentioned that in 1978, administration started searching for new enterprise areas that might draw on Zenith’s strengths in high-volume and high-quality manufacturing, engineering R&D, and brand-label advertising and marketing.
For instance, a brand new division was set as much as make parts to promote to different producers (it now sells primarily to the pc trade), and in 1981 Zenith started one other division to fabricate decoders and different merchandise for the cable tv (CATV) trade.
The 1979 acquisition of Heath Co., St. Joseph, Mich., led to the corporate’s most profitable enterprise past its conventional boundaries. Zenith’s curiosity was piqued, not by the well-known do-it-yourself digital Heathkits, however by Heath’s desktop laptop based mostly on the 6502 microprocessor. Zenith used the pc to catapult itself into turning into a significant producer of IBM-compatible private computer systems. Final 12 months it boasted some $1 billion in gross sales on this space.
Thriving via expertise
TV was not Zenith’s unique product. A producer of radio receivers since 1918, Zenith bought its first black and white TV set in 1948, the identical 12 months it acquired the Rauland Corp., a Chicago-based picture-tube producer. That first line integrated a turret tuner that could possibly be upgraded for increased frequency channels just by having additional tuning strips added to it. In 1952, when UHF assignments have been made to broadcast stations, Zenith clients, in contrast to these of different producers, might adapt their TVs cheaply. Thus started what was to turn out to be one of many firm’s Most worthy assets-customer loyalty.
Zenith engineers took half within the start of colour TV. They constructed color-signal-generating gear within the early Fifties and, together with 12 different producers, demonstrated to the Federal Communications Fee (FCC) colour receivers constructed to the Nationwide Tv System Committee (NTSC) normal. Then Zenith drew forward by fixing one of many commonest issues of the day—lack of image synchronization resulting from interference from, say, an electrical razor or a automobile idling close by. Its resolution was fringe-lock circuitry that prevented the spurious noise from fragmenting the image or inflicting it to roll. Zenith filed for a patent for this expertise in 1951 and received it in 1957. The corporate efficiently—and profitably—sued Admiral for patent infringement.
Zenith received extra clients within the Fifties by being the primary to the market with a wi-fi distant management. Invented by Robert Adler, this ultrasonic machine was marketed as Zenith’s Area Command characteristic. It was so common that at one level, Zenith credited it with boosting gross sales some 40%. It was licensed to RCA Corp. and adopted, with Zenith’s permission, by many different U.S. firms. Admiral once more infringed the patent, and Zenith profited from a profitable swimsuit. The expertise endured for about 20 years earlier than yielding to infrared distant controls, whose larger bandwidth allowed extra features.
Zenith’s latest technological breakthrough, the Flat Pressure Masks tube, is produced on the firm’s image tube plant in Melrose Park, Sick.
Zenith Electronics Corp.
The black matrix
Considered one of Zenith’s greatest claims to paint TV expertise fame is Chromacolor, a sort of tube that the remainder of the trade dubbed unfavorable guard band black matrix. The corporate patented it in 1964 and launched it in 1969. Earlier than Zenith’s innovation, colour TV screens had trios of partly overlapping purple, inexperienced, and blue phosphor dots, the overlap forming a white background. A shadow masks between the electron beam and the phosphor grid narrowed the beam until it illuminated solely the middle of every dot, leaving the encompassing phosphor unlit to stop colour bleeding.
In Zenith’s Chromacolor tube, the phosphor dots are shriveled and a black carbon materials—the black encompass—is deposited between them. The electron beam is allowed to bleed across the dots: the black encompass retains the colours separate on the display. This alteration helps brighten the image by permitting extra of the electron beams to succeed in the phosphors. It additionally improves distinction—the black encompass prevents the reflection of ambient mild and so sharpens image element.
In 1976 Zenith patented the tri-potential electron gun, additionally referred to as the prolonged focal size gun. The longer focal size of the principle lens produced a extra sharply centered electron beam, and led to the sharpest TV picture tube accessible from a U.S. producer; solely Sony’s Trinitron tube (utilizing a unique expertise) equaled it. However based on Peter Bingham, previously of RCA/GE and now government vp for Thomson Client Electronics in Indianapolis, it didn’t assist Zenith as a result of “it wasn’t cost-effective. It required greater energy provides, and it was tougher to fabricate.”
Within the late Sixties, Zenith had additionally been awarded quite a few patents for surface-wave intermediate-frequency (SWIF) filters, now generally known as surface-acoustic-wave (SAW) filters. Simpler to fabricate and simpler at separating adjoining channels than the transformers they changed, the solid-state gadgets encompass a small platelet of piezoelectric materials with a rigorously engineered sample of parallel aluminum strains photolithographed onto its floor. At this time they’re frequent parts in colour TVs and VCRs worldwide. To this present day, Zenith income from quite a few SAW patents. “We have been so early within the recreation that we received some broad patents,” mentioned Robert Adler. “For instance, we have been awarded a patent on any transmitting and receiving transducers on piezoelectric supplies which have totally different numbers of strains.”
Zenith didn’t instantly patent SAW expertise outdoors america, a former employees member informed IEEE Spectrum, as a result of key executives within the late Sixties didn’t imagine that non-U. S. competitors might ever be a menace. “Once I was employed,” he mentioned, “I requested in regards to the affect of Asia, and I used to be informed that we’d by no means have to fret about it.” That perspective permeated Zenith’s early technique, he indicated. Zenith disagrees, and a spokesman mentioned the corporate’s lack of patent exercise abroad was resulting from value considerations.
Slender revenue margins—traditionally 5 to 7 p.c, narrowing to 2 to three p.c in recent times—frequent to all the client electronics trade, depart little room for errors in advertising and marketing or manufacturing, to say nothing of design.
Slender revenue margins—traditionally 5 to 7 p.c, narrowing to 2 to three p.c in latest years-—frequent to all the client electronics trade, depart little room for errors in advertising and marketing or manufacturing, to say nothing of design. Competitors from Japanese producers within the type of low-priced TV units within the late Sixties made the enterprise even more durable. What started as a trickle within the Sixties and early Seventies quickly changed into a rout because the Japanese lower costs and gained market share.
The nice shakeout
By 1974, main gamers have been affected. Motorola, for one, bought it, Quasar tv division to Matsushita Electrical Industrial. “We have been in a number of companies that required a number of capital,” mentioned a Motorola spokesman, and “our technique indicated that our future in semiconductors and two-way radio was higher than client electronics.”
Zenith’s archrival, RCA, “redirected R&D to blue sky analysis,” Bingham mentioned, and for just a few years misplaced its edge in colour tv. However as a big, diversified firm, RCA survived this error and returned to extra fruitful TV analysis within the late Seventies, based on Bingham.
Zenith’s manufacturing plant in Reynosa, Mexico, makes use of computer-controlled gear to provide components of Zenith’s TV chassis
Zenith Electronics Corp.
In these days Zenith had no companies outdoors client electronics to fall again on, and so needed to keep the course. Whereas pursuing cost-reduction efforts, the corporate resisted popping out with low-cost, low-quality merchandise, and thru many of the Seventies was rated among the many highest-quality producers by Client Experiences. It continued to advance colour TV expertise, if with fewer dramatic breakthroughs than earlier than due to the sector’s rising maturity.
Zenith additionally started to shift its product combine to increased margin merchandise—massive console units with many options—that might be much less affected by value declines. On a number of events, nonetheless, the choice so as to add a characteristic was made late within the design cycle, one Zenith engineer informed Spectrum, with a web improve in each the complexity and value of the ultimate product.
Furthermore, the recognition of some options proved short-lived—for instance, Zoom within the Seventies and Spacephone within the Nineteen Eighties. With Zoom, a button on the distant management enabled the viewer to enlarge the middle part of an image until it stuffed all the display. With Spacephone viewers might reply phone calls by speaking via their tv units.
The Seventies’ survival technique included the beginning of Zenith’s removing of some manufacturing operations out of america, in 1971 to Matamoros, Mexico, and Taiwan and increasing later to different cities in Mexico and different international locations. At this time Zenith builds parts, subassemblies, chassis, and different components in Matamoros, Reynosa, and Ciudad Juárez, Mexico. It produces image tubes in Melrose Park, Sick., as famous earlier, and does last meeting of TV units in Springfield, Mo., and Reynosa.
Zenith was one of many final TV producers to maneuver from hand wiring to printed circuit boards.
Some trade observers argue that Zenith erred in not relocating manufacturing operations outdoors the U.S. within the late Sixties, when a few of its U.S. rivals did. They imagine Zenith trapped itself with an promoting marketing campaign touting the truth that its merchandise have been “Made in America,” and solely moved after rivals used decrease labor prices to undercut Zenith on value. Equally, Zenith was additionally one of many final TV producers to maneuver from hand wiring to printed-circuit boards. Once more Zenith capitalized on its practices by promoting with delight that its televisions have been “hand-crafted.” Within the early days, PC boards confronted reliability issues and have been very exhausting to restore, trade executives say, however just for some time. They indicated that Zenith caught with the outdated expertise far longer than made sense.
Actually, they are saying, the corporate’s recipe for fulfillment has for many years been to stay so long as attainable to confirmed expertise in each product design and manufacturing methods, on this manner reaping the advantage of elevated reliability and an enhanced fame for high quality. For instance, Zenith was additionally sluggish in automating its factories, though immediately they’re among the many most extremely automated, and resisted changing tubes with transistors.
However, Zenith’s conservative method to mannequin types and furnishings is believed to have restricted the enchantment of its new fashions to older TV patrons. And the corporate’s failure to draw younger customers has in truth contributed to the gradual erosion of Zenith’s U.S. market share.
Zenith’s reluctance to vary its advertising and marketing system additionally might have damage the corporate, analysts say. Its loyal community of distributors—who purchase from Zenith and promote to retailers—is certainly one of their belongings in rural areas. However this two-tier distribution system merely provides one other layer of value in areas with massive chains of retail shops. A Zenith spokesman disagreed, stating that although on the floor this technique appears costlier, the distributor system makes native advertising and marketing efforts extra environment friendly.
The patron group’s famous growth of the Flat Pressure Masks (FTM) cathode ray tube has proved a boon for the pc division, however a combined blessing to the masks’s developer. The patron division spent some $80 million, analysts estimate, to make FTM a actuality, however is hard-pressed to see any return on the funding. “We supported [computers] to get them going,” one engineer mentioned. “A few of the income should be put again into us.”
Abandoning ship
Cash just isn’t the entire story. A former Zenith employees member informed Spectrum that the corporate now not has the R&D functionality to develop FTM right into a client product. Certainly, “the money cow that allow them get into the pc enterprise has turn out to be an albatross round their neck,” mentioned Nicholas P. Heymann, an analyst with Drexel Burnham Lambert, of New York Metropolis.
And the albatross has been getting heavier up to now few years. With the latest entry of Korean firms into the tv enterprise, the regular 2 to three p.c annual drop in receiver costs has doubled to five to six p.c yearly—tough value financial savings to attain below any circumstances.
Till late in 1987, analysts imagine, Zenith nonetheless hoped its client division would turn out to be worthwhile. The power of the yen was anticipated to pressure the Japanese firms to lift TV costs and the Congress was coming near passing protecting laws, for which Zenith was lobbying closely. However neither occurred, so at a while both late in 1987 or early in 1988, Zenith apparently gave up.
Most of Zenith’s extremely specialised engineers imagine their experience can be essential to any firm that took over their division. There are some 500 or so scattered via the corporate, former workers reckon (Zenith declined to estimate this quantity). The minority opinion, as voiced to Spectrum by one engineer, is that such a purchaser would have an interest solely in “market share, and would maintain the engineering group a brief time period, then disband it.”
A significant query is precisely what Zenith would package deal with its client electronics unit. Manufacturing operations in Mexico and in Taiwan will surely be a part of the deal. Analysts are at odds, nonetheless, over the tube-making facility in Melrose Park, Sick. A extremely automated plant, it has been geared as much as produce FTM tubes for laptop displays, in addition to easier varieties for receivers, and would value Zenith about $330 million to switch, based on Martin Hurwitz, an analyst with IDS Providers, a division of American Categorical, in Minneapolis. Nevertheless, the ability may additionally be probably the most enticing a part of Zenith’s enterprise for any purchaser.
To probe additional
Patent 2814671 for The Noise Pulse Interruption of Synchronizing Sign Separator, higher generally known as the Fringe Lock, designed by Robert Adler and Meyer Marks, was assigned to Zenith on Nov. 26, 1957.
Patent 3446975, for the Acoustic Wave Filter designed by Robert Adler and Adrian De Vries, was assigned to Zenith on Could 27, 1969; it was the idea of many later refinements in tv engineering design.
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