[opendtv] Convergence: This Time We Mean It

  • From: Craig Birkmaier <craig@xxxxxxxxx>
  • To: OpenDTV Mail List <opendtv@xxxxxxxxxxxxx>
  • Date: Mon, 2 Jan 2006 08:53:09 -0500


Data, Music, Video: Raising a Curtain on Future Gadgetry


Published: January 2, 2006

The flat-panel televisions will be getting bigger, the MP3 players 
and cellphones will be getting smaller. And almost everything will be 
getting cheaper.

But the biggest trend expected at the International Consumer 
Electronics Show, which begins this week in Las Vegas, is that these 
machines will be communicating with one another. The theme of this 
year's show might best be described as Convergence: This Time We Mean 

For more than a decade, manufacturers of consumer electronics like 
televisions and audio gear have talked about blending their products 
with personal computers, so that consumers can enjoy a seamless 
stream of data, video and music anywhere. It has not happened, 
because the two industries do not have compatible technology 
standards and the requisite high-speed Internet connections have not 
been widespread enough.

This year all that changes, say executives who will be introducing 
new products at the show. They say that consumers will finally be 
able to sling images and sound wirelessly around a room or an entire 
house. The major electronics makers will be showing TV's with 
computer capabilities and phones that will play video and music, as 
well as the next generation of digital recording and storage devices.

While technological convergence may now be possible, some fear the 
industries have not yet made connecting all those devices simple 
enough for the average user.

"There is still a lot of confusion around the connected home," said 
Van L. Baker, a market analyst with Gartner, a technology research 
and consulting firm. "Reducing it will be the challenge to keeping 
the momentum going."

Getting consumers past the confusion of how to link, say, a PC to a 
TV will be the next big hurdle.

The show comes after a very good year for consumer electronics. 
Plasma and liquid-crystal display televisions, MP3 players and 
digital cameras with five or more megapixels of resolution have been 
big sellers.

  "We don't see any reason that this will slow down anytime soon," Mr. 
Baker said. "The transition of entertainment from analog to digital, 
of time-shifting and place-shifting, is just getting under way."

Attendees of the electronics show, the biggest trade show in the 
country, will be scrambling to get a first glimpse at some of the 
products that will fuel the growth of the industry, which represents 
$126 billion in annual sales. The annual exhibition is off limits to 
the general public, but it is expected to attract 130,000 executives, 
dealers, journalists and investors.

More than 2,500 exhibitors, a record, spread across 1.6 million 
square feet, another record, will try to grab their attention. This 
year, 6 percent of the exhibitors will be from China, illustrating 
that nation's significance as a major player in the industry. Among 
foreign attendees, China will rank third, behind Canada and Taiwan.

The show is more than just a display of new technological toys. It is 
also a forum for industry executives to forge alliances and present 
new business strategies.

Bill Gates, the chairman of  Microsoft, will give his vision of the 
future in a speech Wednesday evening. Sir Howard Stringer, the 
chairman and chief executive of  Sony, will take his turn Thursday 
morning. On Friday morning Terry Semel, the chairman and chief 
executive of Yahoo, will speak, followed later that day by Larry 
Page, a co-founder of  Google.

Intel plans a major announcement about its new Viiv (rhymes with 
drive) multimedia platform, which will power PC's built to deliver 
digital entertainment. Intel hopes that Viiv will transform the home 
computer in the same way that its Centrino platform transformed the 
laptop into a mobile communications device. Paul S. Otellini, the 
chief executive of Intel, will give a speech Thursday evening 
outlining Intel's road map.

Manufacturers are expecting another record year in 2006, but with 
continuing declines in prices. Across a broad swath of categories 
like cameras and audio and DVD players, consumers will pay less and 
get more features. Even in the flat-panel TV industry, prices dropped 
as much as 40 percent in 2005. This trend will translate into slower 
revenue growth in 2006.

As for new areas of growth, analysts are predicting big sales of game 
consoles in 2006 as Sony introduces its PlayStation 3 and  Nintendo 
brings out its Revolution console. Both devices, like the new 
Microsoft Xbox 360, can be used as the central node for a wirelessly 
networked home.

Electronics companies will also be introducing new home media servers 
and TV's that can receive digital content wirelessly from a PC or via 
an HDMI cable (for high-definition multimedia interface). Another hot 
topic at the show will be IPTV, or Internet protocol television, 
which sends programming over the Internet through a broadband 

Then there are the companies, like  Elan Home Systems, that want to 
get right in the middle and sell devices to control all the networked 
appliances. Elan will be at the show introducing a control pad for 
everything in your house, from electronic devices to the drapes.

While major players in the electronics industry continue to squabble 
over the format of the next generation of DVD's - Blu-ray vs. HD-DVD 
- both factions will be showing products that consumers can buy this 
year. The new players will be expensive, some costing more than 
$1,000. Still, the industry expects to sell about a half-million of 
the new players in 2006, mostly as components in PC's rather than as 
stand-alone devices.

  In the audio sector, companies are seeking ways to take advantage of 
the popularity and dominance of the Apple iPod. Several manufacturers 
are planning to announce products that will work with the iPod to 
move music to devices around the house.

Another big trend, said Steve Tirado, chief executive of  Silicon 
Image, a semiconductor maker, is bigger storage devices. "People want 
a place to consolidate their digital media."

Ross Rubin, the director for industry analysis at NPD, a market 
research firm, said that apart from home networking systems, some new 
technologies would make their way to consumer markets this year.

  Canon and  Toshiba will both present televisions with 
surface-conduction electron-emitter displays. The technology produces 
crisper pictures than can be offered by existing flat-panel 
televisions, the manufacturers say. The sets will go on sale later 
this year.

Other Asian TV manufacturers will also demonstrate sets built with 
new organic light-emitting diodes that use less energy and could one 
day be cheaper to produce than liquid-crystal display panels.

Another notable product development to be seen at the show is the 
miniaturization of cathode-ray tube technology to fit into flat-panel 
televisions, allowing what could be the best-quality picture yet. 
"They will be very high end, very expensive," said Mr. Rubin. But 
like that of so many products at the show, the price will eventually 
go down.
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