WAVE Report

Cebit 2001
By John Latta
(April 5)

WAVE Issue #0118


It is hard to describe this show. One view is that it is an European IT fair but this does not fit. This is certainly not a consumer electronics show in spite of the fact that Sony has multiple booths and in one the Playstation 2 was prominent (Microsoft showed nothing of XBox). Yet, there were three big halls of telecommunications with the emphasis on Internet and cell phones. These are the toys of both teenagers and their parents in Europe. Certainly the PC is everywhere at CeBIT but this is not where the buzz was. CeBIT is the sum of many markets from the PC to IT to smart cards to MCAD (Mechanical Computer Aided Design) and much more.

The show was also a reflection of the shifts the market is experiencing. Those in the PC industry feel that there will be no Post-PC era, the PC will live forever just like the minicomputer, but I have my doubts and this fair reinforces this. In the landscape of home and business spending on technology, the cell phone has become critical in a way that it has not in the US. What we see here could well be a viewport into future market shifts in the US. That is, as the PC stabilizes in single digit growth the action is no longer in this market. When looking to the future in the Post-PC era, CeBIT is sending a clear message from these markets - the action is in communications and especially those that relate to the mobile individual.

My impression is that the Internet may appear in Europe as a mass-market service in much the same way it has in Japan - under the cover of a cell phone. DoCoMo had a big booth touting its rollout of 3G in May in Japan while the rest of the industry ponders 2.5G and talks of the delay of 3G. Japan virtually never exports a service - DoCoMo is the exception. One of the major impacts of DoCoMo's i-mode is that this service brought Internet to millions in Japan who otherwise were not users. Early indications, at least in terms of the phones on the floor, are that the same process has started here in Europe. What does this imply? The cell phone is a platform, which companies will leverage to bring expanded services and increase the market for home products. Given the penetration of Bluetooth into cell phones this serves to extend the reach of the cell phone and, very importantly, it provides a platform in the home. The Ericsson announcement of the Internet radio is an excellent example of this.

CeBIT Overview

As expected, CeBIT is dominated by European companies - especially in software and communications;

In the PC space Europe had only a small representation in the booths while it was overpowered by companies from Taiwan and Hong Kong;

The Taiwanese companies were present in force in much the same way one would expect at the home conference: Computex

It is interesting that the representation of these same Taiwanese companies in the US at COMDEX is much less;

US based companies can be divided into two types: small and large;

Large companies such as Microsoft, Intel, Cisco, Motorola and Lucent had stand-alone booths which were packed

Small companies were usually in a US pavilions, of which there are many, and these booths were usually very lightly attended

Markets which are uniquely European include:

Enterprise application software such as SAP;
MCAD and all those related to design;
Office Automation;

Telecommunications is a unique area:

Many of the companies are European but other players include the US and Japanese companies. There was virtually no Taiwanese participation except in LAN hardware products.

There were no sections devoted to home products and applications; however, these technologies and products were tucked away in many booths, especially those related to telecommunications;

Getting access to home products and strategies took some digging, in part, because these sections of the booths were usually packed. For example, in both Ericsson and Nokia there were many consumer and, in particular, home products on display. The Nokia home demo was always packed 4+ deep.

Now we will review some of the products that caught our attention.



HP was showing its HP DeskJet 995C with built in Bluetooth with the following performance:

Parallel - 17pp/m
Bluetooth - 13pp/s
IR - 13pp/m

This was for black and no data was given for color. In terms of the OS's supported it will be Windows 2000 and beyond with a native HP driver. There is likely support for earlier OS's including Windows 98 but these are expected to be supplied by a 3rd party. The Bluetooth profiles supported include:

Hardcopy Cable Replacement Profile
Basic Printing Profile
Still Imaging Profile

HP was also showing another Bluetooth printer, the DeskJet 350C.



Belkin was touting a complete Bluetooth product family that includes:
Access points,
and Adapters for printers, PCs, cell phones and PDAs

The keyboard and mouse products will be released in late 2001. The printer adapter is expected to sell for $150 in July. They were also showing video between two PCs using Bluetooth for transport.



Ericsson is an excellent of a company leveraging its core strength in wireless, in this case, Bluetooth, into the home market.

Web Screen H610
Excellent engineering and ID
Bluetooth communications
Phone Storage for e-mail and voice mail
Web browsing
OS Linux
Price - US $900 - $1,000

Cordless Internet Radio
H100 Bluetooth communications
MP3 support for stored audio
Radio tuning using SonicNet
Streaming supported: Real and Windows Media
Availability - End 2001
Price - expected <$300
Looking for other service partners

The engineering and ID of both products was well done. These products represent a beachhead in the home for Ericsson. The down side is the pricing of both products.

They had a number of future product concepts, which indicate their product thinking and this included:

A watch phone
Home audio using Bluetooth
A communicator Platform using Bluetooth which looks like the Compaq iPaq



My question was simple - what has changed since the Bluetooth Developers Conference. Its Vice President, Anders Tormod responded.

There have more deals with operators, paper companies and pen developers. This is not surprising given their business model objective to provide a positive gain for all in the supply chain even including a service revenue to the paper companies for usage.

The addressable space has now been enlarged to the equivalent of 3X the size of the US.

The company growth has gone from:

12/99 - 2
5/00 - 15
12/00 - 100
3/01 - 170

Today the focus is on execution. Trials are expected in Q3 and Q4 of this year. Production operations are expected in 2002. About 85 internal + 15 consultants are working in Stockholm on the first Anoto servers to support the back end. There are two issues: scalability and geography. Initially the focus will be in Stockholm with the first servers. Anoto realizes that this is a carrier class service. As a result they must have redundancy and responsiveness. It was very interesting that one of the reasons they are not behind a GSM implementation is the call set up time, which can be seconds. The Anoto pen works best in a packet based switching network which means 2.5 or 3G. The important factor being the latency between pen actions and the result which is implemented by the Anoto servers.

Eventually printers will be able to generate Anoto paper but not today.

The company has been working on an applications developer kit to speed new applications.

Anders is very aware of the reality that they have one market window. If it does not go well the first time there will not be a second time. Thus, right now, it is much more important to provide a quality "Anoto Experience" than to get to market early. They are right on. I continue to be impressed with Anoto.



Jabra is well known for its earphones for communications. They were showing a wireless Bluetooth headset. Their product will be out in the September/November timeframe. However, they admit being late to market by about 6 months. The headset goes into a docking station for recharge. It runs for 2 hours on a battery charge and the battery is expected to last 2 years. The retail price at introduction will be 400DM going to 300DM a number of months later.

The most interesting assessment came from their estimate of the Bluetooth market based on the cell phone.
(1) - within 1 year most new phones will include Bluetooth
(2) - within 1 year it is expected that 30% - 40% of the phones without Bluetooth will upgrade to cordless headsets



This is a Korean company that makes a Bluetooth headset using the GCT Bluetooth chip set. They claim that an advantage they have is a complete Bluetooth software stack that is sold in the NeoSDK. The headset is an add-on product, which needs a dongle for a non-Bluetooth cell phone. Their product will be released in July at a retail price of $200 to $300. Battery life will be 2 hours talk and it will run standby all day. The battery technology is Lithium-Polymer.



Seiko Instruments has a Bluetooth watch. This is a prototype of what was shown as a concept at COMDEX. The watch also has a security capability to automatically log one on and off a computer in range. The watch includes:

32bit RISC Processor
2Mbit of RAM
16Mbit of Flash
Li-on Battery
Bluetooth Profile implementation - Serial, Head set and Dial-Up
Incoming and Outgoing phone calls
Phone Status Display
Remote Control over WAP
PC Mouse Control
MP3 Player
Video Control
Wireless Security
NOTE - PC Mouse Control



What stood out in this booth, in terms of future concepts, was a new wireless Internet Appliance. Toshiba continues to put considerable emphasis on its use of Bluetooth but we have not seen specific products here. They were also showing an imaging watch for the first time.


DXG Technology

They have done better than Casio with the imaging watch. It has a color LCD panel, a camera and this all supports VGA images (640 X 480). It is called the Color Wrist Cam. Price is expected under $200. Prototypes will come out in July and production in September.


National Semiconductor

If there is one company pushing Information Appliances it is National Semiconductor. Their flagship product is the Geode X86 processor. They are also touting a complete Bluetooth solution. The most valuable aspect of the booth was the cabinet of IA devices, which was noteworthy in the scope of products. The only low point was it is not clear any are selling in volume.


E-LAB Laboratories

The P-40 is one of the more complete Web tablets seen yet. This was being shown in the National Semiconductor booth. The feature set includes:

High quality display using Poly-Si for a 1024 X 768 resolution in 6.3"
Touch screen
Dual USB
Li-Ion batteries
Docking station with easy removal
Communications engines
801.11b via PCMCIA card
CDMA Multi OS capabilities
Windows 98, 2000, Me or embedded NT
Solaris Video in a window display including interpolation to full screen - need 802.11b wireless

The image quality was very good.

Shipment in the US Q2 2001
Full unit - $2,500
Stripped down unit - $1,500 minimum
Display cost - $350

This, in concept, is a Webpad with lots of potential. One slight problem is price. What was interesting was the individual in the booth pointed to the case full of Information Appliances and spoke with strong emotion that every product in that case is being severely hampered by the display costs.



Mitac is representative of many of the Taiwanese companies seeking new markets as the PC slides south. There were two PDAs:

266MHz Strong ARM Processor
Due in August

66MHz Motorola
Due in December

Likewise there were two Webpads based on screen resolution. Strong ARM processor

8.5" Color - $599
10" Color - $649

They also have products targeting the low cost home wireless networking space. Their products included:

WX-2211 - Wireless Router - 802.11b - $500
WX-500 Smiley - Wireless Access Point - 802.11b - $250
WL - 281 - Wireless LAN to USB - $200

The most interesting insights came from the booth discussion. I commented that the prices were much too high for the home. They agreed. After some discussion we arrived at a common ground - Router $150 maximum and $50 for the access points and media conversion devices. However, they cringed at the realities of getting to these numbers in the near term.

Tucked away was a prototype of a VoIP gateway. Basically this is a media converter to go from analog voice to IP packets. It was far too large for sale but its presence was to attract potential OEM interest. There was no pricing. Two products were implied: Nile 2P for two phones and Nile 4P for four phones. These are expected to be sold to ISPs.



Asus Communications was showing its products in the communications hall and they had the AU G6000 voice gateway. This is due in May and the possible price for a one-line unit is $100 (they were very tentative on the price). In the future they expect to have a PSTN to VoIP gateway.



This was one of the few times I have seen a Taiwanese company showing concept products which rivaled those of the Japanese companies. These included:

A stylish wallet type pocketbook with a horizontal LCD screen.

Contact with my Finger
A finger mounted phone which was a unique concept and quite stylish.

Play Games
A portable game platform that is a partial joy pad Pen Phone The integration of a PDA with a phone.

The combination of an earpiece with a phone and microphone.

Acer was also showing in another Acer booth the SlimMate, apparently for the first time. It has the following specifications:

Form Factor - similar to the Palm
Processor - Motorola 68EZ328 at 24MHz
2/4MB for Flash RAM
16/64MB EDO RAM Support for Docking Sleeve
Wireless Connection via GSM
Sleeve modem
Peripheral Strategy

What was most interesting was that the unit on display was running the Linux OS and the final product would be based on the Palm OS. Price is TBD with the release schedule for September in Taiwan.



Using the landline phone as a platform, Samsung has two products similar to those shown at COMDEX. These are called Anyweb WSP-200 and WSP-300. The 200 is a screen phone which has the following:

VoIP or traditional analog telephony
Personal Java compatible
Home I/F - ISDN, ADSL or Cable telephony
Corporate - 10BaseT
Security - SSL3.0
Remotely managed including download updating
Display 8.2" STD LCD
Web Interface for Internet Access
First Screen - HTML programmable and downloaded
Simultaneous IP telephony and Web access
OS VxWorks
Internet Audio H.323 Support
e-mail: POP3 and IMAP4
PIMS: phone book, Scheduler and Calculator
Telephone features: Voice mail, Call Waiting, Caller ID
Processor: Intel Strong ARM 1110 (206MHz)
Parallel Printer Support
Keyboard - retractable
Interfaces: SmartCard and Smart Media

This is an impressive feature set but probably the minimum for an integrated phone. The product is available now and is priced in Germany for 1490DM. Samsung recognizes that the phone is too expensive. In the US the price is $500 but even at this price they are looking for a subsidy from the ILEC, CLEC or ISP provider. They described the deal to reach the market, i.e., business model, as critical to determining its effectiveness.

The 300-model is not available now but will ship in Q3. It is similar to the 200 but with a screen phone - videophone. I was impressed with both the industrial design and the functionality. The videophone was demonstrated and worked quite well. However, the price expected to be $700.

Both of these products attempt to merge the phone system, both analog and IP, with the Internet, with the later, i.e. model 300, adding video. Thus, the phone system is the platform and the features are the value adds. There is one overriding issue - price. This is driven by both the complexity of the unit that satisfies many of the Internet and remote management requirements and the display. The combination is a market killer. When the public is seeing cordless phones, which dominate home sales, at $50 or less for a basic unit the value add of going to a phone such as this is hard to justify.



They were showing the end-all carPC - model KDC-MX91bti. It includes:
Stylish in-panel look;
600MHz Pentium II
USB Interface
Windows 2000
Bluetooth with the following profiles
Dial-up networking
$1,400 expected price

In the booth they were using the finger mouse to control the unit. The Bluetooth I/F provides for access to the Web via a Bluetooth enabled phone.

This was a marvel of engineering. When they popped open the front panel, which was also the CD drawer, the unit was loaded with electronics. Future products could include a DVD drive able to play movies.

One slight problem - it is not clear that Kenwood will produce the unit. When asked about the date the product would released the response was "...we are assessing the market need." At $1,400 they better.

The model KDC-MX91bti is a dashboard ornament for those tired of just radio or audio and having idle money with no effective purpose - just looking to be spent.


Westech Korea

How low can a LCD display price be driven today when seen in a finished product? We found an excellent example of what the market will support. Westech Korea was showing four models, two of which were flat panel televisions.

7" diagonal TFT screen
Television tuner
Sharp "recycled" screen
$235 distributor price

6.8" TFT Screen
Television Tuner
New Sharp screen
$245 distributor price - higher due to new screen

5.6" TFT Screen
Only Sharp "recycled" screen $135



We previously sought out a low end product based on an LCD panel, in this case a television, which is described above. KiWi is doing the same with PC panels. This again provided an opportunity to find out where are the price points for more functional products. These are certainly not the low end Webpads but do help box in the product and functional matrix.

Panel PC 686T12
12.1" LCD TFT Panel with Touch Screen (Optional)
AMD K6-2 at 300MHz
HDD, CD-ROM, FDD and Battery (Ni-MH)
USB (2X), Memory up to 256MB

Panel PC 686T10
10.4" LCD TFT Panel
Other specs the same as 686T12

Panel PC 886
Pentium III to 700MHz
LAN, Modem and USB (4X)
For Industrial PC and other applications

Mobil PC 786 Very similar to the internals of the 686T12 and 686T10 but without the display panel



This company claims the world's smallest PC. After seeing the Kenwood product I am not sure this is the case but the Atoz product is nonetheless interesting in terms of form factor. Here are the specifications:

Size: 157mm X 145mm X 45mm
Pentium III to 800 MHz
Q4 - Pentium IV to 1.4GHz
256MB RAM to 512MB RAM in Q4
VGA with 4MB
56K modem OS: Windows 98, Me & 2000
Price $999
Available Now

The engineering design, especially in the cooling, was very good.



Audrey was off in a corner weeping. I almost took a picture but it would have been bad form.

Sitting on one stand was a SIP phone. This got my attention. This was the first showing of the SIP phone by 3Com in Europe and it is being positioned as a carrier product. I was surprised at this. By carrier product this implies ILECs, PTTs or ISPs. UUNet was used for illustration. This ISP has an extensive network and may offer a voice solution - this is one market the 3Com SIP solution would fit. One of the reasons it is not an enterprise product is that SIP is not in a position to compete with PBXs, which are feature rich.

3Com has just begun a trial with a European PTT and this is likely to be a long haul given the high expectations of the carriers based on existing telephony equipment and their long qualification cycles. However once in the door with a major win this SIP based product could be a very strong market.


Industrial Design Forum

This was an exhibit totally separate from all the others and sitting in a separate building. It was more like a museum of industrial design tucked in a back corner. One concept caught my attention: Roomware. This is an attempt to change the Human I/F paradigm from the computer to the user. It focuses on using flat panel displays everywhere in the Office Environment.

Wilkhahn Wilkening+Hahne
Bad Munder, Germany

Darmstadt, Germany

The design concept was striking. There was a sample in the design forum, which was based on a single LCD screen.



Sanyo was showing Active-Matrix Type Full Color Organic EL Display. This was an early production prototype and the color was excellent. The sizes were 2.4" and 5.5". Since this is an Organic Electroluminence display there is no need for a backlight. There are many factors that are complementary to TFT LCD panels. The complexity is approximately the same as TFT and, in fact, the driver for the organic display is a low temperature polysilicon TFT substrate. It is expected that they would not enter production until mid-2002.



The DoCoMo booth stood out. They had many examples of the "terminals" which will attach to the 3G rollout in May. While the rest of the cellular industry debates when 3G is coming DoCoMo is doing it. I have to give them a great deal of credit, especially when the company is part of NTT.


Mitsubishi Electric

They were showing a line of next generation cell phones called Trium. The highlight product is the mondo - an integrated PocketPC and phone. On the voice side it supports:

WAP 1.1
Data Modem
FAX Modem

This is an early example of a converged PDA and phone product. Certainly the Handspring Visor add-on module does this but Mitsubishi sees this as only part of an overall product line.



This is the name for StarBand, which we reported on at CES. It is two way satellite service for Internet access and in the US costs $69.95. They have a current deal with Microsoft MSN. Gilat is the name of the service outside the US. At CeBIT they were launching the European marketing. The company sees their compelling proposition based on offering both DBS and Internet. Operations are to be launched at the end of the year in Europe. However, even they admitted that Europe will be a challenge. The problems include: fragmented satellite availability, national borders and policies and marketing to many different markets/countries.



They announced and showed the Cordless MouseMan Optical, the first such product with two key features. It works at 27MHz and is compatible with their other wireless products. The battery runs for 3 months or better - AA batteries. It is an 800dpi mouse. The price will be $69.95 in the US and will go on sale worldwide in April.



Their product the CHIC 1400 is a 27MHz optical wireless. However, it has a docking station and the battery will only run the mouse for 8 hours - and apparently not continuously. The price point is expected to be $70.

Chic will have a Bluetooth family of HID products by the end of the year. A preview will be available at Computex.



They have face recognition software called FaceIT. What is significant is that it is fast enough to recognize individuals in crowds. This was a real attention getter as the crowds walked by, saw their faces boxed in with a circle and then logged on the computer.


CeBIT Assessment
European Perspective

One hears much about the mobile phone culture in Europe. It is dramatically different than the US. It seems like everyone has a mobile phone - they are going off all the time. When not ringing, teenagers are passing the screens about as they laugh at the SMS between friends. Here at CeBIT the telecommunications companies painted a picture that goes well beyond the very narrow implementation of today's cellular network. It is in the home, it delivers personal media and it is one's information connection to the outside world. Quite literally it is the implementation of Bill Gates "Information at your Fingertips" vision a number of years ago. Japan provides a complementary perspective of the Internet. The i-mode phones are, to many Japanese, what the Internet is to the United States. With GPRS and 3G the same will happen in Europe. Thus, a PC centric view of the Internet is increasingly a US centric view.

The transition we are seeing, which is NOT lead by the US, is that the platform of the future is the individual. With broadband wireless to the individual, the issue is no longer the infrastructure but the services that ride on it. Again this is significantly different than today's perspective of the market. In terms of a mass market, DSL and cable modems represent static delivery and it is only a slice where individuals spend their time and money. At CeBIT a lot of excitement was generated about the new delivery gadgets. The Europeans know and buy cell phone products by Brand and Model number. In Japan it is style, size and impressive gadget features. In the end these trends will fade just as the model number is not important when it comes to voice transport. Here is where DoCoMo is ahead - this is fundamentally a service delivery company. They push their leading position on 3G but the end game is not the infrastructure - but what the customers do with it.

Where does this leave the US? There are two issues: infrastructure and culture. The CTIA rants about the lack of spectrum, spectrum caps and how the US is lagging behind the rest of the world. Yet, it will be impossible for a mobile youth culture to take off when cell phones are banned in high schools. It is highly likely that SMS will explode when fully implemented here. SMS can be seen as a mobile version of Instant Messaging - e-mail in a different form for a different age group. We cling to our PCs and fond desire for broadband to the home yet this is much less important to both Europe and Japan. Certainly DSL and Cable modems will take off in Europe but one needs to keep in mind that there is a race going on with WLL (wireless local loop) and the emergence of cellular broadband with a fixed wired broadband infrastructure. Europe will shape its use of broadband differently than the US, if for no other reason than its adoption of the PC is not the same.

The implications of this are quite simple:

The markets for PC centric products will be less global going forward;
Growth rates for PC centric products will be dramatically lower than in the past;
Growth markets have shifted from the PC;
and The US has ceded a leading position in markets where the individual is the platform

When the individual is the platform ease-of-use is a necessary condition not a secondary consideration. The Japanese get this. In the US we hear the rhetoric about ease of use but Windows is still too hard to use, certainly by those not versed in computers, and it crashes too much.

Handheld Devices

We lump PDAs and Webpads in this category. The trends we observed at CeBIT are:

These platforms scale by screen size where the Palm has defined the PDA space;

The success of the Compaq iPaq has spawned clones in the PocketPC space but none quite get it;

Linux is emerging in the PDA market, at dramatically lower prices, but it does not deliver solutions;

The next size up, which largely delivers a full size web page, is an immature market;

Bluetooth is being built into many products in the same way IR has been;

Display panel cost is the single largest factor holding back a mass consumer market;

and The really exciting products are in tied to 3G, especially concept products from Japan

We strongly believe that pricing must scale with screen size and functionality where the PC is the anchor at $500.

PC like functionality in an 8" X 10" paper form factor - $300 maximum

Web or specific function 8" X 10" paper form factor or slightly smaller - $150 and less

Note card, i.e., PDA form factor - $50 maximum.

CeBIT showed the obvious - the market is not even close to these numbers. What CeBIT allowed us to do was to envelope this product space using data points of price, screen size, and functionality. When we spoke to E-Lab the anger with display panels was extant. One of the reasons why the PC was such a success was its ability to ride Moore's law across many components - processor, memory, storage and even CRT displays. In the portable space display panels ignore Moore's law and batteries flaunt it. Quite simply this market will remain in stalled mode as long as prices are high.

Again we must return to the role 3G plays. 3G provides a service model for the individual. It remains to be seen what the combination of screen size, device functionality and price will take off. In fact, we believe it is likely that devices will play to vertical markets and the one device fits all markets will diminish with time.


Bluetooth is 6 months away. (We hope it does not follow the trends of other technologies where the emergence was in perpetual anticipation mode. Examples include CD-ROM, ADSL). We see three Bluetooth camps:

The cell phone companies, which will drive it into most phones,
Market share leaders who set the mark by being the first to use Bluetooth
and The Taiwanese who will create no end of products that use Bluetooth as standalone products or buried in them.


For the first time we saw the Taiwanese companies enter this market, Mytac and ASUS, both with H.323 VoIP gateways. What began as free Internet telephone calls is emerging as a significant shift in telephone communications. This is a very early market. SIP and MPLS will play a major role. However we cannot lose sight of the following:

VoIP is an infrastructure play for some years to come; The home is not where the action is, at least early in the market;

Telephony (both local and long distance) is driving to a free business model and for IP based telephony to be viable, as a business, it must, provide high value services and/or be linked to other services;

Expect the entrenched telcos to seek a regulatory protective net when their businesses are impacted;

Do not expect that the most effective delivery of VoIP services will be via landline, even to fixed locations;

The development of suites of services, including presence, which stick in the market is years off;

and It is important to note that 3G is just a form of VoIP on a mobile platform.