***CES 2001 – Report Number 1
(January 7-9, 2001)
The Consumer Electronics Show (CES) follows closely on the heels
of COMDEX – yet while COMDEX was trying to look more like a
consumer product event CES was making the transition to digital
products. The keynotes by Craig Barrett, CEO and President of
Intel and Bill Gates, Chairman of Microsoft, both touted the
Extended PC. This is the PC, which is at the center of the home
information, media and control needs. Yet, on the show floor
there was little of this PC role, other than the Intel and
Microsoft booths. An apt analogy is the contrast between the
Greeks and Romans, with the latter being CES. That is, when in
Rome do as the Romans do. When viewing consumer products few have
any heritage with the computer – the DVD player does not, the
television does not and the audio system does not. CES reflects a
consumer product focus on price, price and price. $200 is the
mass-market threshold and at this price the PC is only excess
baggage. Further, most consumer electronics operates with one
finger be it a remote control or portable audio player. CE
devices do not have keyboards. As long as the PC industry seeks
to play with the Romans it needs to play by the Roman rules.
Right now it is a wannabe looking into the coliseum.
CES likes to pride itself on being a Las Vegas convention center
trade show. This comes with a price. All the parking was gone. In
his opening remarks Gary Shapiro stated that the largest assembly
of temporary structures for a non-military event, are here are
CES. To do it took every square foot of ground around the
convention center.
This is also a mixed bag show. There are tents upon tents of
automobile electronics of which audio is at the top. Cars and
trucks are laden with power amplifiers and speakers. Many a car
has the whole back seat full of speakers. The main floor is a mix
of big traditional CE companies from Japan and countless small
companies selling everything from wires to plastic equipment
covers. There were interesting convergence products all over the
floor but finding them was a challenge. Here the WAVE Report
describes some of its observations from the show.
Market numbers that we gleaned at the show:
Consumer electronics sales in the US rose to $90b up 10% from
1999. The major market stimulus was digital.
DVD is the fastest selling product in the history of CE in the
US.
DTV sets achieved 625,000 units. This was a big deal but much
less that meets the eye. Very few of these are HDTV capable.
*Intel
The show had not yet opened and a keynote, called a "Pre-Event
Kick-Off Keynote," was given by Craig Barrett, Intel's CEO and
President. It began and ended with a performance by the Blue Man
group. At the end of the presentation a video camera was shot
down Craig's throat that found "Intel inside" – this got a great
audience response.
Craig's message was a very consistent one for Intel and made a
lot of sense for them. He talked about the PC Extended era - PC X
(power), and about how the PC is at the center of the next
generation of personal computing and that processor is the
Pentium 4. Craig claimed that 400m PCs worldwide are connected to
the Internet. His premise was that to have the best user
experience one needs a powerful CPU. There will be more consumer
devices connected to the PC. To illustrate this Intel basically
rolled out a suite of products and showed existing ones in this
context. This included:
Pocket Concert Player
MP3 Player
Web Tablet
Will connect wireless to a PC up to 150'. Not announced but
will be selling in the near future.
POPster
Personal web broadcasting using a Pentium 4. This appears to
be software linked to the Intel camera which allows for
individuals to disseminate video over the Internet.
Skyline
This was apparently 3rd party software that allows one to use
the power of 3D for "infinite zoom." They showed a picture of the
earth from space and continuously zoomed to an individual house
in LA. Got great audience response
PC - Phone
This is the handheld fully functional PC with a 640 X 480
screen the WAVE Report covered in our COMDEX report. The
difference was that it was placed as a PC peripheral by Intel –
this seems to be stretching it. As we have described before – the
PC Phone product has great potential as a portable device that
will shake up the PDAs
Peer - to - Peer
Intel is hot on this but I have still not seen the compelling
use. Everyone associates this with Napster and Craig tried to
dispel this but it remains to be see what the value of PtP is.
Intel Microscope
Craig lauded this for its educational potential. He stated
that Intel no longer has a relationship with Mattel.
Media Box
Presented as a concept this is a box that allows the PC to
output to the television or other home electronics. They showed
this by demonstrating the PC as the repository of all of the
photographs a family has. These could be instantly called up on
the TV screen.
Intel also announced, showed and has begun the sale of PC
peripherals including a keyboard and mouse (wireless).
The wireless technology is proprietary at 900MHz and when asked,
Intel stated that there would be more to come which leverages
this technology by using their access point. Their assessment was
that 900MHz, unlicensed spectrum, was unused for this application
and it has many advantages. The access point looks like a large
Hershey chocolate kiss. When asked why not Bluetooth they stated
that Bluetooth is a business solution and not suitable for a HID
application which is centered in the home.
Pricing
Base station access point - $59
Keyboard - $79
Mouse - $59
Kit of all three - $179
Game Pad - $64
Buying on the Intel web site nets a 10% discount. There is
currently in effect a $30 rebate on the Kit.
Intel has opened its retail store at:
www.intel.com/shop
CES was a key event for Intel in that it showed the depth of the
change in Intel's market strategy. They are changing the position
of the PC and directly attacking a market which it has, in the
past, left to others, such as the PC OEMs. The fundamental
problem is that this does not solve its gross margin problem.
That is, nothing has the gross margins as the microprocessor, and
certainly not the products it introduced at CES. However, if any
one company is to drive its future by pushing more technology
onto the PC it will be Intel. If they have to compromise some
margins, in order to preserve the larger good, i.e., the Pentium
4 sales, they will do it at the risk of their current buyers of
microprocessor and other system components.
What we regard as most important is not the specific
announcements but the long-term implications of what Intel is
doing. When they went into the camera business some 5 years ago
few thought this would be a major business. In spite of many ups
and downs, Andy Grove has been tenacious in his attack of this
market. In this regard Intel is as stubborn as Microsoft. Neither
will give up until the market has been proven irrespective of the
failures along the way or the lack of profitability. What Intel
is saying is that they no longer see their system builder and
OEMs as the partners which are the first line of preserving
Intel's core business - selling the components of the PC. As the
market fractures in many directions it is critical to Intel to be
A if not THE major driver for the products which represent the
Post-PC era. This is a strategic shift which merits close
observation.
*3Com - Kerbango
Finally this product will be shipping shortly. Here are some
highlights of what was gained from our booth discussion.
When the product ships there are expected to be 20,000 radio
stations available on the Internet.
The unit will first be available from Amazon in 3 - 4 weeks for
$299.
The OS is Linux but the user has no clue that this is the case.
At a panel discussion it was hinted that the project to design
and implement this Internet radio was much more complex that
expected. Apparently the tuner software and service was
operational over a year ago. The problems largely centered around
the Real audio software and its Linux version. (WAVE Report
reading - Real fell down in its delivery to Kerbango.)
Windows Media will happen if and when they can come to terms with
Microsoft.
It was stated that a key to the user friendliness of the radio is
the method of tuning. This is a category-based approach which has
types of music displayed and that can be picked from the dial.
Most of the categories are by music but there is a category by
geography. One can also store favorites and define a set of
stations of personal interest. There is also a clock in the unit
and multiple wake up sounds can be selected in conjunction with
the radio station.
Most importantly, the unit can be programmed from a browser. Here
there is a great deal more flexibility in selecting stations. For
example, one can find classical radio in Vienna - from the unit
itself this might take some effort but from their web site it
would be easy. The real power of their approach is that there is
an auto update mechanism where whenever the radio is connected it
is automatically updated, including the software. When the radio
comes on, it automatically registers its serial number and this
triggers the updating.
It is also possible to search radio stations based on bandwidth
as some are broadcasting at 128kb/s but not many. Most use the
Real 32kb/s Real GE engine.
The business model remains quite diverse. This includes not only
a retail strategy but a licensing one. Internally Audrey will be
getting a Kerbango channel to allow it to do the same functions
as Kerbango. Further, they will be licensing the tuning service
and one of the first is SoundJam.
Future product extensions include wireless and the extension, a
la, Sonic Box, to allow for one Kerbango radio to retransmit its
output over an FM station and have its audio be received on many
radios in the home.
We still regard this as a very innovative product that combines a
service with hardware. It also does a splendid job of leveraging
the Internet. The question remains, however, if they can make
money. This is now 3Com's challenge.
*Microsoft
The theme of Bill Gates talk was the emerging digital lifestyle.
To support this the talk had many demonstrations of the home of
the future. A key element was audio but included were picture
frames. However, in spite of the announcement of the consumer
centric capabilities of Whistler, the presentation was over
powered by the unveiling of the XBOX final product design.
Microsoft strongly supports the Intel vision of the Extended PC,
although this support was not stated in the context of Intel's
keynote. The PC talks to devices, is an information gateway to
the home and is the main store of information.
Points made by Bill Gates in his presentation.
Software is the key to the digital experience. Further, software
will avoid the "islands of information" which are isolated on
devices and the Internet.
The PC is coming together with the CE manufactures. This
conference represents a milestone in that convergence.
Whistler is to be a resource in the home that will be on 24 hours
a day. Attached to it will be various devices throughout the
home.
Challenges to the industry and the use of PCs in the home remain
the following: Ease of Use, Technology Schizophrenia, and
Information Handling.
The ID and design of XBOX is done. All that remains is to plug in
its state of the art chips, which will be done at the last
minute. (Wave Report assessment - the schedule is very tight and
we hope Nvidia delivers on time.)
The current development boxes are running at 1/5 the power of the
final system.
Testimony videos were shown to support the claim that developers
enthusiastically support XBOX.
Two games were shown that demonstrated the power of XBOX. They
were very well received by the audience.
*Sony
Sony had a different approach to its booth. One had to wait in
line to hear a presentation and then one could enter the booth,
which is off the main show floor. Basically the presentation was
an individual giving a monolog for about 5 minutes on what is
new. This was very helpful given all the new products and
technology in the booth. As before Sony was a wealth of
innovative products.
-eVilla
This is an Internet thin client for the home. Sony calls this
the Network Entertainment Center. The MSRP is $499 and it is to
ship Spring 2001 with retail distribution. The ID was excellent.
The most striking aspect is the portrait display. It is 800 X
1024 and uses a FD Trinitron display. Display quality is
excellent. There is support for up to 4 users. The OS is Be.
Users can download music. Of course, it has a memory stick slot
and there are 2 USB ports. The product materials state that
portrait mode is "the way the Internet was meant to be." However,
we found this not the case. I tried CNN and no matter what was
done the full page would not display on the screen. According to
Sony a section on the page was reserved for a fixed display area
for the headlines. This is coded in Java and as a result they are
not yet able to scale this by adjusting the font characteristics.
Actually they wanted me to go to Yahoo which better conforms to
their expectations on how to scale a page. In spite of these
limitations the quality is very good - it is a Sony product.
eVilla is in contradistinction to many of the thin clients, such
as Intel's Dot.Station, where the distribution is via 3rd
parties, such as ILECs or ISPs. Sony has a first class ID, an
emphasis on entertainment, aggressive pricing and it going for
the retail model where they are strong. If this model works it
stands to put in turmoil many of the complex marketing schemes
trying to get Internet access to homes which do not have it. Sony
is just saying by its actions - put the Internet terminal on
retail shelves and we will see if there is a real Internet retail
market.
-Wireless AV/IT Gateway
Another name for a web tablet. Again Sony has defined the
market space. This is not just a web device but an entertainment
display. The unit includes a 802.11b access point which supports
one tablet. The users can access the Internet and also watch a
television window at the same time. The display is 800 X 600 and
it weights 3 lbs. The until runs only 1 hour on the included
battery - a typical weakness of many of the tablets. It will be
released in the fall in the US and pricing has not been set. The
Wireless AV/IT currently sells in Japan for $1,200.
The question is - is a $1,000 + price point acceptable for a
tablet? Sony has again changed the rules of the game by making
this a portable home entertainment device that integrates the
Internet. Thus, Sony could well make a place for the product in a
space where just web cruising is likely to have difficulties.
-Pen Tablet Art Studio
This was the desktop pen computer that got so much attention
at COMDEX. The pricing is:
LX 700 - PIII 750MHz - Flat Surface Display - No Pen - $1,999
LX 800 - PII 850 MHz - Flat Surface Display - No Pen - $2,499
LX 900 - PII 1 GHz - Flat Surface Display - w/Pen - $2,999
The units are on sale now. This computer continues to draw
crowds. The demos are impressive and Photoshop is one of the best
applications to use it with. The down factor is that it is not
set up to run Windows 2000. The reason is that the computer is
targeted for individuals. In booth discussions, it was clear that
Sony employees saw the lack of Windows 2000 support as a major
drawback. When confronted with the reliability issues of Windows
98 and even worse, Me, they all cringed. Distribution is with
major computer sellers. The WAVE Report believes that in 6 months
the OS issue will get fixed.
-Transmeta Portable
This has a 1024 X 640 display and is very easy to carry
around. Women were walking around with it in the booth and got
considerable interest. The price is $2,299 and the battery life
is 4 hours.
-Blue Violet CD Technology
In a technology demonstration Sony was showing what has the
potential of being the next CD-ROM technology. It will store up
to 5 DVDs of information. The data capacity is 22GBs.
-DVD Writeable Technology
Sony is uncharacteristically taking a laid back position on
the writeable DVD standards battle. They were showing a
demonstration platform which will support both RW and + RW. But
they specifically emphasized that others will fight in the market
in 2001. Then in 2002 Sony will have a product which is backward
compatible with both formats.
-Digital Camcorder
Sony announced it now has a digital camcorder that breaks the
$600 price point barrier.
-Satellite Radio Receiver
The Sony unit can be taken from the car to the home. However,
the major drawback is that home reception of satellite radio can
only be accomplished with a line of sight to the satellite. Thus,
there must be an antenna near a window with visibility to the
satellite. The receiver costs $299.
-infostick
This is Sony's Bluetooth communications media in the form
factor of a Memory Stick. By using this approach virtually all
memory stick devices can become Bluetooth enabled.
-Product Concepts
It was interesting to note how even in the product concept
area the product ideas have refined since COMDEX. Sony showed an
accessory strategy for the lanyard product based on the duo
version of the memory stick. This had the ability to include
attach a still or video camera to the lanyard. Now they were
showing a holding case with all the accessories, which attaches
to the lanyard and this included even a display.
The duo memory stick is due out in Spring 2001 and as Sony stated
- products will follow. This is when we should see many of the
product concepts reduced to reality.
*SD Memory as a Platform
In obvious response to Sony's Memory Stick initiative where
memory is a platform the SD Association had a large and well-done
booth showing how this memory form factor could just as well be a
platform for accessories. The booth was broader than that in that
there were a number of SD module component manufacturers.
However, it was the breadth of companies showing innovative ways
in which this form factor could be used for which attracted out
attention. Leading the pack was Toshiba, which had largely
followed Sony's lead in making SD an accessory platform. They
were showing a concept platform very similar to the future
concepts that Toshiba had shown at COMDEX. The SD form factors
included: scanner, camera, GPS and Bluetooth. Nintendo was
showing how it is using SD in the GameCube. The most interesting
announcement in the booth was Palm's support of SD as an
expansion means. They were showing modules of Bluetooth, Bar Code
scanning, GPS, MP3 Player, modem and digital still camera.
*Panasonic
-I-TV
The I-TV is the combination of a television and Internet
enabled device, which can access the Internet, including while
the programming is being shown. The price point is only $100
above the cost of the television. Aggressive product which merits
close tracking.
-DVD Write
Their model is DMR-E10. However, the price is $4,000 and it
has all the usual restrictions on what can be written on the DVD.
*Pioneer
Pioneer will be bringing out their DVD-RW 3rd generation unit in
June. This is basically to offer consumers the ability to write
their own videos similar to today's VCR. However, the price is
$2,500. Further, the restrictions on the unit to placate
Hollywood are unending. No digital video in, no multichannel
audio, no coax in, and nothing that would hint at video from a
DVD. This whole issue of copy protection has gone to absurd
levels and it is easy to understand why the CE Association is
fighting the trend to restrict the ability of consumers to make a
copy for home use.
IEEE 1394
There was a booth that hosted only products that supported the
IEEE 1394 high-speed interface standard.
*NEC
At the corner of one of the tables was an NEC demonstration of
wireless 1394. NEC called it Wireless TERMBOY - RF400. It uses a
60GHz frequency, a 1.5GHz bandwidth and 500Mb/s of digital
bandwidth. It is claimed that the transmission can penetrate
walls in the home. There are 2 ports for data transmission that
are IEEE 1394a-2000 compliant. The propagation distance is 10m.
This is significant and difficult technology. The RF components
are expensive and difficult to make at these frequencies. When
asked what would be the possible pricing an amount of $1,000 was
given, however, this is very early. The NEC individual in the
booth was the design engineer and his English limited. At the
same time he asked what was a good price and we told him $200 or
less. If this technology can be significantly reduced in price it
could make broadband throughout the home a reality.
*Digital Harmony
Digital Harmony has both chips and software for the 1394
entertainment market. Their view of the home entertainment signal
distribution technology was interesting. Our conversation began
with the observation on their part that everything in home
entertainment will go to 1394. A radical notion we thought. "No
way is 1394 going to send low voltage high current to speakers."
"Ah, but you missed an important factor - speakers are going to
all be self-powered," was the response. Interesting. Digital
Harmony sees that the home entertainment distribution will all be
on one 1394 cable. This one cable will carry both the signals and
the control information. Under the TA 1394 standards group, is an
effort on AVC for audiovisual control. What Digital Harmony
provides is the implementation of the stack on the devices. They
claim that many of the audio and video companies are supporting
AVC but Sony. Sony has its own proprietary implementation.
The company claims that the issue of - will 1394 be the home
signal transmission standard? - has passed. With the broad
acceptance of 1394 as the standard for video, including I/O for
video editing this question has been answered. This standard is
supported by virtually all the digital camcorder.
Digital Harmony also has a module called WireFree which supports
up to 8 audio channels in the 5GHz band for a distance of 100'.
If there is a market that could use "no cables" it has to be home
entertainment. The first step in this process is the adoption of
a standard signaling protocol for audio, video and control. It
appears that 1394 has accomplished this. The next step is a
wireless environment and here the work of NEC and others
indicates that wireless 1394 has potential. In fact, Digital
Harmony stated that Bluetooth is a natural component for use in
the home entertainment situation. This is certainly ideal for low
bandwidth control information.
*Casio
Their web tablet is an MPC-501 that has a 6.7" SVGA screen with
800 X 600 display area. The OS is Windows 98. The price is $2129.
Casio is the leader in watch technology. These watches have been
on sale for several months but they are interesting nonetheless.
Wrist Camera
Camera with 28,000 pixels
PC connection using Irda
Storage for up to 100 images
$199
Satellite Navi
GPS in a watch
$499
PC-Unite
PIM
$199 Metal
$99 Plastic
Transmeta
Transmeta has their own BIOS design in the reference platform.
Phoenix Technology has done the BIOS work.
The booth has several tablets.
-Sewoo - Korea
Tablet with Windows 98 support. 6-hour battery life and a weight
of 2.6 lbs. The hard drive is 6GB the display is 800 X 600 using
TFT. The price is expected to be $700 - $800 in Q2.
-eZex - Korea
Good ID in a tablet. No other details available as they did not
have an individual in their stand.
*TiVo
The booth is all about the software to allow for flexibility in
program selection. There are many options to select the content
including do not record reruns, as an example. However, we asked
the question, can one program the box remotely via an IP address?
The answer was still no. They claimed security issues but these
seem very solvable. Not sure why the delay in implementing the
obvious.
The core issue with PVRs is that in spite of strong consumer
response by those that own the units the retail market is
terrible.
*C-Cube
C-Cube announced a networked media processor architecture -
DoMiNo. Basically they want to be the glue logic that handles all
media streams in home entertainment boxes. Its features include:
Dual stream video CODEC and multiple steam video Decode;
Support for HDTV and MPEG4;
Hard drive support for time shifting recording;
Digital media support including: DVD-RAM, DVD-RW, DVD-R,
DVD+RW;
Transcoding and transrating and
Support for copy protection standards including CPRM and
CPPM..
It is expected that the first consumer products which use chips
based on DoMiNo will be released in Q4 2001.
*AudioRamp
This is an Internet radio and audio company. Their radio has a
flashy CE look and competes with Kerbango. At CES they introduced
additional products. The first products were the iRAD - S - $599
and the iRAD - C - $549.
These store up to 1,500 MP3 songs. The connection is via Ethernet
or HomePNA 2.0. There is no need for a PC. Also streams Internet
radio stations. The S model has built in AM/FM while the C does
not. Further, the S model has it own speakers.
The new models due in Q3 are more PC centric and rely on a server
to provide the audio files. The pricing is:
iRAD - TS - $299
iRAD - TC - $249
Audio Ramp is working with a company to provide an Internet radio
tuner capability.
CES 2001 – Report Number 2, will be published in WAVE0104.
www.ces.org
www.wave-report.com/other-html-files/CES2001.htm
Wave Issue 0103 1/17/01 Article 2-01