***CES 2001 - Report Number 2
During CES, some of the smaller, less known companies had very
interesting products. Some examples are given below.
*imation
DataPlay is a rotating media cartridge which operates in write
once, WO, and pre-mastered, ROM, modes. It stores 250MB and 500MB
and is about the size of the IBM Microdrive. It is rotating media
and has a transfer rate of 1MB/sec. DataPlay is being positioned
as a source of prerecorded music for MP3 players and a means for
recording images on digital cameras. The significant part is the
price $10. Of course, there must be broad support for yet another
physical and electrical interface.
*DigiScents
It was only time before a company added olfactory support to
the developers tool kit. DigiScents claims to have done just
that. The company would not comment on a retail product release
but its iSmell odor-generating device is expected to sell for
from $80 to $150 in H1 2001. It has scent cartridges, much like a
printer, that are used to generate a scent output. They claimed
to have found the 128 basic scents, which is essential for
creating a wide range of olfactory output. The company has the
ScentWare WDK (Web Developers Kit). DigiSents paints the
technology as the second coming of everything in the New Economy
from games, to advertising, to e-commerce, to entertainment and
to hardware sales: the list has no end. In the booth one had to
wait in a long line to go in the tent to experience scent
technology. The press kit was nothing less that impressive. The
Oakland, CA based company claims first class backing, a solid
scientific base, many companies ready to use the technology and
extensive press coverage. Only one small step left ahead -
execution.
*inetcam
This company provides software to make personal video
webcasting from your computer. They have extensive support, which
includes: multiple video streams, variable bit rate audio, motion
detection, and security. The basic video camera support module is
shareware - upgraded to a complete version for $10. The company
is converting this business model into a retail model. Expected
to release in 2/15 will be 3 SKUs. For $9.95 will be basic video
with a video address for the Internet. The next up is audio and
multiple camera support for $29.99 and at the top end is all of
what is below and Security and motion detection for $49.95. The
critical issue is not really the PC as a video server but having
adequate outgoing bandwidth. I was impressed with the software
and its capabilities. It is uncertain, at this pricing, if the
company can generate sufficient revenue to be viable.
*2Wire
This was one of the first companies in the residential gateway
market space. Largely seen as a "why do I need this" product the
company has matured significantly and we were pleasantly
surprised at the depth of product. The basic HomePortal product
is a DSL modem and gateway to the home network. It is much more
than that. The company had many facets in the booth which
included support for virtually all the home network schemes from
wired to wireless, VoIP, VoDSL, and VPN. Voice represents a
significant challenge given all the standards both using the
Internet as transport and with the PSTN. 2Wire claims that the
box is quite sophisticated at interfacing with the home phone
network and enabling any phone to be able to be used either as a
conventional phone or a gateway phone. Another important factor
are the changes taking place on DSL installation. In order to
promote more self-installs the ILECs are placing DSL on the
installed phone line. Then each phone needs a small inline filter
which goes onto each phone connection which blocks the DSL
signals. Thus, DSL access can be gained by a DSL modem anywhere
there is home wiring. With the 2Wire gateway it only needs to be
connected to any phone jack and the modem has complete access to
the incoming DSL. The output of the modem can be either USB or
Ethernet to the PC. When using USB the interface to the PC avoids
the NIC integration. All of this makes great sense and makes DSL
home integration much easier and even for only moderately aware
users. They are now able to self-install DSL.
There was also an extended discussion about household uses for
the gateway. This began by the observation that many of the ILECs
and DCLECs are using the number of IP addresses as a vehicle to
create Premium services. That is, if you want more than one PC
connected it costs more. This is really a simple problem that
firewalls routinely address - the view to the outside world is
only a single IP address, yet, what is behind the firewall can be
a significant network. The 2Wire gateway not only provides a
firewall but support for DHCP and a DNS server. Question - what
if a home was seeking support for two PCs, each using VPN to the
husbands and wife's work locations, would 2Wire support this?
Yes. we were pleasantly surprised at the level of VPN
integration. This is not an unusual request to them and the
company has found some anomalies in the various VPN protocols
which are being corrected.
We asked - "why do you need a gateway when both Craig Barrett and
Bill Gates are arguing for a PC centered universe." The PC could
do many of the functions which 2Wire supports? The answer was
that - why have the PC place a priority on communications
processing, including routing and security, when all of these are
routine but not necessarily simple or low processing requirement
tasks. These are better done by a dedicated box, in the same way
there are Ethernet hubs and independent routers.
In terms of business model, 2Wire agreed that the DCLECs as a
means to the residential market is dead. The three leading
companies: North Point, Covad and Rhythms are critically wounded
and the market has now shifted to the ILECs. However, 2Wire's
business is in transition mode while they await the long
qualification cycle for equipment approval by the ILECs. The
advantage being if the ILECs resell or especially if they promote
the 2Wire solution, this could be a big boost to the company.
Note: Following CES the company laid off 24.
*Milletech
This is one of the herd of companies with web pad and pocket
PC products. The web pad is called Jupiter and will sell for
$500+ in May/June. The PDA called Mercury has a 4" 640 X 480
display. Included is an embedded GSM or CDMA phone. It runs
either Windows CE or Linux and slated to cost from $600 to $700
also in the May/June timeframe.
*StarBand
StarBand is the US implementation of Gilat's satellite
technology for 2-way Internet access. Given all the limitations
on using satellites for the Internet I was impressed with this
offering. This is the MSN partner for nationwide Internet access.
The details for the offering include:
Satellites Used
GE 4
Telestar 7
Internet service provider
MSN/NBCI
Costs
Install $99
Antenna $399
Monthly service $60 - $70 - unlimited fixed rate
Initial Service began
11/6/00
Current Number of subscribers
14,000 - most are not paying subscribers
Bandwidth
Downstream - 400 - 500kb/s
Upstream - 153kb/s maximum
Upstream bandwidth is shared with all the other users
*goReader
goReader is a book reading tablet. What is interesting is the
business model. They are a vertical market play for college texts
and more importantly in narrow segments of college education -
law and medicine. The key to developing these markets is
partnerships with the publishers and the schools. The reader will
sell from $400 - $600 and the books for 20% to 30% less than the
hardcover. The tablet is portrait oriented and has a hard disk.
The OS is Wind River VX Works and the software is all written in
Java. The weight is 4.5 lbs and the battery life is 5 hours. The
primary external connection is via USB. There is not a PC Card
slot. The screen is passive to save on COG. First units are to go
on sale this summer for the fall semester.
This e- book conforms to the OEB standard, which is based on XML.
This allows for significant compression of book content. An
example cited was the compression of a Quark file from 270MB to
10MB in book format.
The advantage of these vertical textbook markets is that the
number of publishers is limited. For example, goReader has signed
Addison Wesley and has an exclusive on 130 titles. They also have
agreements with University of Chicago and Wake Forest University.
An interesting factor is that the professors support the concept
in that they make more money. Because of the high level of used
book recycling on campus the authors only make royalties on 1 out
of 3 books which are sold for classroom use - that being the
number of new to used titles. The publishers are still struggling
with how to treat the output printing rights to the e-books. Some
may limit the number of pages that can be printed at one time,
others may not allow any printing, while some will enable the as
much printing as requested. The e-book will support all these
conditions.
The e-book is only the tip of the market. At goReader they
foresee the following:
Ethernet connectivity to all books, preferably wireless;
The ability of the lecture materials, including white board
writings, to be put directly into the tablet;
Testing delivered directly to the e-book and its output
following the exam; and
The interchange of notes on a book between students.
The current goReader supports annotation directly on the screen.
This is clearly a market with a significant first mover
advantage. The first mover value not being the e-book reader but
the relationship with the publishers and schools.
*MedTak Electronics
Certainly these products are not computer based but provide a
very interesting use of electronics for notification, which has
significant consumer value. In April the company will roll out a
series of products that include:
Tracker products, which have two components: adult unit that
monitors the status of the "client" device and a small client.
These allow for the tracking by distance and direction of the
small personally carried client. The technology is based on
900MHz RF. At 50' to 200' and alarm can be set up to warn of
movement beyond that distance. Direction location works up to
1000' to 1200'. The products that incorporate this technology
include:
KIDTRACKER
ADULTGUARD
PETWATCHER
for each of these segments. For example, if a child carrying this
unit wanders off beyond 100' an alarm goes off. The parent can
point his/her unit and there is a visual indication of how far
off the point is the correct direction. By trial and error the
correct direction is found and then the child can be located. The
price is $149.
Another product is WaterGuard. This is a water detector worn by
children. If they should fall into a pool a very loud alarm goes
off on the receiver. Also to go on sale in April.
Another device continuously monitors body temperature on an
armband. This is transmitted to a notification device that
displays the temperature. Upper and lower limits can be set and
if the temperature exceeds these, an alarm goes off. The value of
this is if children are sick and in bed their temperature can be
monitored at night by adults in another room.
The WAVE Report regards this as an impressive application of
technology to the home.
*DoBox
DoBox is an IP and software company doing home server
gateways. The product concept is similar to 2Wire but not
specific to a type of broadband transport or a specific hardware
implementation. An extended discussion made clear the same issues
which surfaced in the 2Wire discussion. That is, home
gateways/servers are increasingly important independent of the
broadband connection and these are complex IT. The major
challenge is to make these products useful in the home.
DoBox assumes a RJ-45 interface outside the home;
The reference platform is assumed to have a hard drive in the
case;
The company has an objective that ease of use is based on not
asking the consumer any questions for set up and use;
The firewall and gateway support DHCP, DNS and IP NET; and
Reference units are in beta now and field trails with
potential customers are due to begin in April 2001.
This is a market driven by experience and 2Wire has the lead. One
issue is the firewall set up. That is, if one wants to get Real
Network content past the firewall there is a set up sequence. We
asked, what if we bought a box based on your design and when
plugging in Kerbango on the home network and there was no music?
Specifically if the fire wall had not been set up for Real
streaming to pass we would not have any idea the problem was the
firewall set up. How would the box tell us it was the problem? To
this we did not get a good answer. Further, when asked about VPN
support, such as was discussed with 2Wire, we were told VPN
support is coming.
The task of these residential gateway companies is to mask the
considerable complexity of the external interfaces. This process
has only begun.
The trade shows for the broadcasters, cable and telephone
industries usually have FCC commissioner and staff in attendance.
What was unusual was that FCC Commissioner Powell came to CES. He
offered many interesting insights.
FCC Commissioner Powell Speaks at CES
This was an informal session where the President and CEO of the
CE Association just asked questions of the Commissioner. He began
with a number of very laudatory comments on the Commissioner and
how he brings a fresh approach to the Commission. Normally one
discards such effusive praise but here it was right on. We have
heard many of the commissioners before but not Powell. We were
very impressed. He brought a very pragmatic approach to issues,
was straight, answered questions and has a keen intellect.
Trained as an attorney his grasp of the technical issues was
refreshing. Another important aspect of Commissioner Powell was
his view of the commission and its role. He has a solid
philosophy on when and under what conditions should the
commission act and what is the role of the market. Given the
major changes lying ahead with the change in administration
Commissioner Powell has been rumored as the next FCC Chairman.
The country would do well with his move into this role.
The Telecommunications Act of 1996 did not anticipate the
collapsing of the barriers around types of service. The Federal
Code is structured around telephony, cable and other types of
services and yet it is now possible to deliver all types of
service in all mediums. Yet, Commissioner Powell does not
advocate a revision to the Act. There are many vested interests
which emerge when the Act is rewritten and this can happen only
infrequently. The revision of the 1934 Act took nearly 10 years
of intense activity on Capitol Hill and in spite of the entrance
of the Bush Administration it is unlikely that this will happen
soon.
Commissioner Powell is most surprised at the rate at which the
telecommunications technology has changed. The digitization of
services is nearly wholesale across the technologies the FCC has
purview over. This continually challenges the FCC to keep pace.
He does not believe that the 2006 HDTV transition will be
accomplished where the 75% penetration target is to be achieved
for the analog spectrum is to be shut off and turned back. The CE
Association maintains that this will reach only 30% penetration.
Thus, given the enormous quest for spectrum it is unclear what
the FCC will do. Commissioner Powell argued that all parties must
shoulder the responsibility to increase the penetration of
digital television. He is dismayed that no one, between the cable
companies, the broadcasters, the equipment manufacturers and the
programmers (Hollywood) is willing to take a leadership position.
He commented that recently he has seen segments of the industry
seeking to levy blame on the other segments as the time
approaches to assess the failure of the transition goal to be
reached.
There are few agencies in government with as broad a regulatory
responsibility as the FCC. It has to carry out a mandate based on
statute, which has been crafted out of compromise, and which can
be contradictory, to set rules which have the power of law. Yet,
many of the issues are at the center of major power centers in
society. He sees as his primary responsibility to serve consumers
and not the industries.
Consumer Electronics Association CEO Gary Sharpiro stated his
concern that there is an assault on the rights of consumer to
copy content for their own use in the home. What has been a
hallmark since the Supreme Court Betamax decision is now under
assault by the IP holders, Hollywood. Commissioner Powell, in
spite of his interest in the subject and petitions before the
FCC, regards it as unlikely they will take a stand in this area.
It is one done by the courts and not one where the commission has
institutional competence.
Commissioner Powell has a philosophy which is grounded in
history. That is, he looks at history as a guide for actions.
Much of the framework for today's regulation came from a
monopoly. As these conditions disappear the market precepts of
Adam Smith very much play into account. Commissioner Powell is
very much behind a market based approach and will wait to force
an issue while the parties see the results of the market.
Wave Issue 0104 1/19/01 Article 2-01