an industry marketing/communications expert with more than 15 years of video, storage and networking experience.

DVD Insider #25 Home Entertainment Nets "Work in Progress" Cheap Won't Get PC in Living Ro

DVD Insider #25

  • Home Entertainment Nets "Work in Progress"

  • Cheap Won't Get PC in Living Room

  • Wild Card in Next Gen DVD Race

DVD Insider #26
  • You need DAM
  • Worry about DRM
DVD Insider #30
  • IDF - Digital Everywhere
  • IDF - The Digital Home
  • GDC - Games Are Serious Business
  • The Infernal Flag
DVD Insider #31
  • CeBIT - Call Me, TV Me, DVD Me, Toy Me
  • CTIA - Call Me, IM Me, Video Me
  • Kids In Our Lives
  • Wireless Entertainment On The Go

by THE Insider
an industry marketing/communications expert with more than 15 years of video, storage and networking experience. 


 DVD Insider #25

  • Home Entertainment Nets "Work in Progress"
  • Cheap Won't Get PC in Living Room
  • Wild Card in Next Gen DVD Race

Would you believe it? A fantastic 12% of the American households are networked and that is going to drive home entertainment networks.

Or if you look at the numbers another way 88% of the American homes don't have networks. Add the fact that 35-45% of the U.S. homes (depending on whose numbers you believe) don't even have a computer so the "surge" shrinks a little more.

The big problem is "ordinary" people don't want a PC in their family or living room. When was the last time you sat on the couch to surf the web, do your emails, edit your photos or videos and produce audio CDs? How about never??

The concept looks fantastic. Who wouldn't want all of their content - music, photos, videos and movies streaming to every room in the house or play video games with others in the house or across the country? Naturally your living or family room entertainment center, like your stereo or TV, would never have to be rebooted would it? This great device has to be easy-to-use and easy to connect with all of those other devices.

Ironically, the store for the common man (and women), Wal-Mart, has plans to tap into this pent-up demand, non-computer market with $300 PCs. But if these homes are going to be computerized it will probably happen because of Steve Job's Mini brick and the copycat units you'll see over the next few months as well as Sony's PS system. These units could be just what the market needs to push more people to buy something for their living/family room that does more than just word processing, email or Internet surfing.

Will CE Users Use Windows?

It certainly won't be Windows or long in the horn Longhorn based product. People who want their content anywhere can't be expected to leave their equipment on all the time as Microsoft recommends. They don't want to wrestle with all of the set up "fun." Rebooting? Yeah right!

Wired networks are the most reliable but they are a pain to set up which is why most of the home networks involve connecting PCs so you can share the internet connection and peripherals.

Only the brave souls choose one of D-I-Y home networking kits to string wires along the baseboard and thru the walls to connect the systems and peripherals. If they are dedicated and creative, they are even moving up to sharing their audio, video and photo content around the house.

But home networked entertainment won't happen until we come to grips with camouflaging the PC so it is simply a source for storing and accessing the household's MP3 collection, videos, photo albums and satellite music. The second - and vital ingredient - is to solidify the wireless networking specs so universal plug-and-play becomes more than just a great PR spin.

Wireless Progresses

Intel, Cisco and the Digital Living Network Association (DLNA) are really pushing the home wireless agenda. Wireless UPnP is proceeding in committee fashion but it is going to take time to get the products CE simple. As long as techies set the ground rules you're going to have to be a geek (we mean this in a nice way) to do this stuff. A few firms like ADS Tech are implementing the UPnP idea across their product lines. ADS has its ME squared (media entertainment evolution) program that says that any product carrying the logo will work other ME squared UPnP products.

Jon Peddie, president of Jon Peddie Research, notes that the PC industry is doing everything in its power to move systems into more homes and hopefully more living and family rooms. He points out that all of today's systems - even the least expensive is 3D-powered. In addition to "Free-D," he has also been taking a cursory view of the budget PC arena.

To illustrate the price deterioration of DVD burners, he notes that increasingly the new entry-level PCs (sub-$600) are sold with CDR/RW drives but upgrades to DVD burners cost less than $50 and in some instances are free. While it is great news for the consumer, Hitachi-LG Data Storage, the market leader, is making it extremely tough for BenQ, Lite-On Asusek, NEC and Pioneer. With prices below the low water mark, it is easy to see why industry analysts forecast large numbers of DVD burners being sold over the next few years.

Blue Dominance?

You might say that HD and BD (Blu-ray) DVD will begin replacing today's DVD burners but according to IDC, even in 2008 when these higher capacity units are supposed to hit their stride their percentage of total sales will be only slightly more than 1%.

The same price deterioration is taking place with DVD recorders. In this area the new Toshiba Samsung Storage Technology (TSST) company makes its own pickup heads and chipsets. They are taking maximum advantage of this internal capability by making life extremely difficult for Panasonic, Philips, Sony, Pioneer and other CE players.

The HD and BD teams are warming up in the locker room determined to have their royalty based 20-30GB storage technologies replace today's cheap DVDR-based units (4.7GB single layer, 8.5GB double layer). Both are scheduled to hit the playing field at the same time - mid year. Both say it is obvious that people will step up to the higher priced burners/recorders/media because the higher capacity will be needed "when" High Def TV and video enters the market…soon.

But almost before the first play of the game, another acronym announces it is entering the fray. Holographic Versatile Disc (HDV) has already been approved by ECMA and JEITA and the first version of the media will hold 200GB and a technology path that has already been proven to be capable of 1TB (1,000GB or 200 standard DVDs).

Present plans call for burners and media to be introduced by multiple manufacturers in the third quarter of 2005, just in time for the holiday buying season. If the past and present is any indication of the prices, you can be certain the producers will be "competitive" with Blue technologies when they hit the field.

The come-out-of-nowhere kids know they have yardage to make up if they are to win the marketshare game over the long haul. The only way most of these firms know how to do this is by what Larry Lueck of Magnetic Media Information Services (MMIS) calls achieving "profitless commodity" status as quickly as possible.

The one thing we all know for certain is that no matter how much "extra" storage capacity you give to someone, they will fill it. HVD might be the home media server storage technology of choice next year for all of your photos, music, videos and time-shift TV programs. That or a nice little DVD library that costs a few hundred dollars and holds 200 very inexpensive DVDR discs you can randomly search.

Interesting options. But next we'll look at the DRM issue which will really determine how quickly the world safely (without being sued) implements all or any of this…

DVD Insider #26

  • You need DAM
  • Worry about DRM

Acronyms make this industry spin but why would you want a DAM and isn't DRM a good thing?

DAM is really digital asset management. And contrary to what you might think at first blush it isn't what someone is trying to sell you, it's your assets. As you'll see shortly and contrary to what your bank statement shows your assets are out of control.

DRM is digital rights management. Boy that sounds like a good thing…like the Bill of Rights. Wrong! It means the person who sent you that content - music, TV, movie, whatever - wants to own that sucker forever and is working real hard to make certain you pay for it…forever!

Your Assets

 

So what are all of your digital assets?

  • More than 22.3 million digital cameras were shipped in the U.S. in 2004 and that was up from 16.4 million last year. Expect the numbers to be even bigger this year because we're getting to really like the instant capture-instant look. Many of these now combine still and video capabilities.
  • The U.S. has finally gotten the camera phone bug which Asia (and Europe) has had for years. In Japan for the past two years if a cellphone didn't include a camera it didn't sell. Last year the same held true in Europe. InfoTrends/CAP Ventures says that the introduction of megapixel handsets will set off a tsunami of camphones this year.
  • All of these cameras and camcorders are being used. Camphones have reached the point where there are a number of bans on their use in some offices and public places. Last year we took more than 1.75 billion still images worldwide and more than 40,000 hours of video per month.
  • Audio content? There's no accurate count that we know of. But to hear the RIAA, millions of digital songs are being stored every day. Let's use the CEA's numbers for MP3 units as a start - about 7 million last year and about 11 million this year. Assume half of the music is also stored on the PC and uploaded to the player and "they" download (legally or illegally) a song a day.
  • Then you timeshift two TV shows a week to watch when you want to watch them rather than when the networks tell you you want to watch them. And you save one of those shows because you want to collect the entire series.

Is it any wonder that it feels as though you have to clean your hard drive or constantly buy a bigger and bigger external drive every 4-5 months? And of course you consistently and faithfully back these irreplaceable files up with products like NTI's BackupNOW! to CDs and DVDs.

Only 13% of the digital photos are ever printed which means millions of files sit on hard drives just waiting to go poof! and disappear forever. People won't back up things like tax records and business files they have on their notebooks and home systems but we really believe digital photos and family videos may get all of us to do more backup. Photos/videos of births, birthdays, holidays, weddings, divorces are just too important to lose!!

The CEA has surveyed consumers and we have told them resoundingly that we want the product. So they do what they do best. They offer 200 and 400 disc CD carousels. They offer 3-5 disc DVD players. They offer terabyte external drives and media servers that are presently known as PCs.

The big problem is managing all of that content and using it…that's digital asset management. There are DAM products but those we are most familiar with cost big bucks for enterprise data/document management. Great if you are Steve Jobs or Bill Gates and have a wall of HD units or a big optical library that grabs the content, plays it and returns it so it can be accessed later.

What is really needed (even before the hardware) is software that automatically recognizes music, photos, videos, DVDs, TV programs and produces meta data. This data would then track the content's "name," where the data is located and how it can be accessed for local or remote enjoyment anywhere in the house. Don't know about you but software that would do that in our household would be worth $50-$100…easy.

Then we'd actually be able to find the one content piece we want that sits in our wireless HD MediaServer and do what the DLNA (digital living network alliance) tells us we are going to be able to do…play it anywhere in the house.

Of course we would also like to have a mini optical library that connects to the PC (which isn't in the living room or den) that has a DVD burner in it and slots for 200-400 CDs or DVDs. We've seen one of these when we visited Sony once but content indexing is manual. But we only saw it once and never in a store? We've also seen a unit that we think could work for the home from PowerFile. Add the automated library software and BAM! we think we'd have a winner on our hands.

Sales in this category are almost nowhere right now. But in a few years believe CDEIA and home network/entertainment VARs could sell a bunch. Then the mass merchants would "discover" the potential and everyone would have them. Maybe someone will have these units at CES in 2006 (we can only hope).

Their Assets

Remember all of those music, TV and video/movie content files we mentioned earlier?

Guess what? Hollywood, the record industry and TV networks believe your only right is to rent them…not buy them (with hard money or by watching shows between mind-numbing commercials).

RIAA is so determined to protect "its" property it has sued a 7-year-old whose parents barely make enough to stay off welfare. Then they took on an 80-plus woman who had been dead for six-months. The parents (and friends) paid. Still waiting to hear if the deceased has come across with her payment (oh did we forget to mention she never owned a computer?).

People like Apple, RealNetworks, Virgin and Michael Robinson (original founder of MP3 and a new firm with a similar goal) make a great living selling you music by the slice. There is even the beginning of a price war going on so the price per song is getting better…and better. But Napster doesn't think you want to own your music but simply rent it for $15 a month…yeah! Of course only 5% of the digital music devices have download technology anyway so is this lack of market research or a good business model? Guess we'll just add Sirius to our home entertainment system to compliment our discs.

MPAA has watched RIAA take a PR beating so they've chosen to take the professional approach. They shut down sights that "might" enable video downloads. Then they throw parties and make contributions in D.C. to help Congress see that they are only trying to protect people from themselves.

To help you protect your family the MPAA has released something called Parent File Scan tool. It lets you find all those "bad" files stashed on the kids hard drives. Then it lets you make the "appropriate decision." Great!!

What they never bother telling Congress (nor would they probably understand) is that even on a global basis we don't live in a broadband world and broadband is necessary to stream a movie. Korea, Japan and Taiwan are so far ahead of the Americas with broadband. In fact they are moving more of their TV to broadband than movies (now that will shake up your cable company). Of course products like BitTorrent that breaks files into manageable segments so shows that would take hours to download can be transmitted in minutes. Since 20 million people have already downloaded BitTorrent. You can bet Hollywood, networks and program developers are - a little - worried.

More importantly according to IDC downloading movies with our Internet connection is pretty low on our wish list. But obviously the potential is there and Hollywood will protect us!

Congress (yes again) has already moved to save us from copying and distributing all of those really outstanding TV shows like Apprentice, Queer Eyes for the Straight Guy, Wife Swap, Extreme Makeover.

Guess what? Hollywood and the networks don't like your timeshifting shows! Right now only about 6 million Americans use DVRs but one estimate shows that by 2010 half of the American homes (58 million) will have them. Of course Asia and European households are well ahead of the adoption curve. They want to get you into thinking video-on-demand (yes rent but not rent-to-own).

So to again protect us, the FCC introduced the broadcast flag in 2003 which has to be in place by mid-year on any digitally broadcast show! This little invisible antipiracy device will make life tough for even law-abiding viewers and organizations like EFF (Electronic Frontier Foundation) have filed suits saying the FCC has overstepped it's authority…you think?

But there are ways to by-pass this (check www.eff.com) .

The CEA officially endorses and aggressively walks the halls of Congress to protect the individual's right to make a backup copy of something they have purchased.

But, individual companies are eagerly holding hands with Hollywood, networks, content developers (video and audio) to get their part of the video content protection royalty pie.

They have developed a slew of moneymaking copy protection acronyms to ensure you always rent and never own (even when you buy). These include:

  • CPRM - content protection for recordable media
  • CSS - content scramble system
  • DTCP - digital transmission content protection
  • CPPM - content protection for prerecorded media
  • SDMI/DMAT- secure digital music initative/digital music access technology
  • VCPS - video content protection system
  • CPSA - content protection system architecture

Not to be overlooked is Macrovision's new RipGuard that is really great! It simply crashes any ripping software and prevents you from writing the movie to your hard drive. Now that is too cool!!!

Now we all understand that DAM is a bad word. However, DRM is all about government around the globe protecting us from "evil."

Just remember those famous words of Walt Kelly, Pogo comic strip creator…"We have met the enemy and he is us."

DVD Insider #30

  • IDF - Digital Everywhere
  • IDF - The Digital Home
  • GDC - Games Are Serious Business
  • The Infernal Flag

Sometimes it's tough to separate fact from fiction from wishful thinking at IDF (Intel Developer Forum) but you have to try or you'd swear that tomorrow you're going to go out and buy an ultralite notebook with a battery life of days that you could use just everywhere. Intel unveiled their new dual and multicore processors that made yesteryear's Big Blue iron pale by comparison. It was pure coincidence that AMD also announced their technology the same week.

But the new notebooks have big screens to die for. They have wireless connectivity to your home, office, neighbor and beyond. You can put it into your car - think MTV's Pimp My Ride - or your rented spaceship. You have the power to multitask to your heart content at the office and then still go home and make movies, watch TV or go visually online to talk to friends around the globe.

The new processors are great but something is missing. Oh yes, an operating system and applications. Longhorn is "coming." Applications are "coming." Barrett and his team probably spend more time pushing and encouraging partners to step up to the plate than they do to keeping pace with Gordon Moore's 40-year-old transistor law (doubling the number of transistors on the chip every 12-18 months).

Today we've got web commerce, messaging, video, audio, wireless computing and implementation in every phase of life and commerce. While IDF sessions spent a lot of time talking about the enterprise, everyone's heart is set on mobile computing and the digital home.

Wireless and mobile are huge in the Pacific Basin. It's getting big in Europe. In the Americas we're still living in a "what if" world. Intel spends a lot to drive technology by funding standards groups - WiMAX, WiFi, storage, digital home, storage/storage management and probably dozens more you never hear about.

It is coming. It has to. We're doubling our digital data and content every 12-18 months. We need a seamless way to grab, share and store all of this stuff. But the implementation of these seamless PnP standards and applications is still painful years away.

Problem is MS wants the standards their way. Apple wants them their way. Linux folks want them their way. SCO wants to sue them all.

Digital Home, Digital Entertainment

Intel and the DLNA (Digital Living Network Alliance) talk at a fever pitch to show that the digital home and digital living room is here - almost. All of the PC makers are working to convince us that their solutions will be the focal point of entertainment in the home - music, video, photos, TV, web surfing, etc.

The new notebooks make a strong case for this solution, especially in Asia and Europe where homes are small and space is at a premium. But in the Americas where homes sprawl there is less interest.

In addition, even though we have surpassed more than one billion computers in the world, the number is way less than half of the global population.

Truth be told, normal people and the computer challenged don't even want a computer…especially in their living room! They want an entertainment center.

If they have a computer in the house, they want it back in the home office. They want them back in the kids rooms where they can download music and burn CDs. Where the kids can IM with friends and share study notes. They want to set theirs up on the kitchen or dining room table so they finish answering emails or finishing projects.

The home network is still that...a network connecting computers to shared peripherals and connecting to the outside world.

The momentum/interest in the entertainment/media center has jumped dramatically in the last year. By the holidays we'll see some very attractive (and attractively priced) products. Part of the solution everyone overlooks is the need for huge centralized HD/CD/DVD storage/access. Then layered on top of that will be portable flash and small HD storage people take with them like Store 'n' Go.

Connecting your refrigerator, stove, lights, heating/air to the network? It's already done! Just ask Steve (Jobs), Bill (Gates), Michael (Dell), Larry (Ellison) who replace these appliances in a heartbeat. The rest of us may get there in five - ten years. If the appliance has to be replaced!

But entertainment at home - and everywhere - is the sweetspot. Intel and AMD know it. MS, Apple, Sony and the others know it. Home theaters are on the leading edge of being a huge business. Home/mobile entertainment solutions still have to get easier to set up and easier to program/use than a VCR.

Security? That's a whole other issue that the Ciscos, Jupiters, Broadcoms and RSA focused firms have to solve before governments step in and "solve" for us.

Games

Leading the Way It used to be that porn pushed our technology. It put the volume behind VHS, DVD, web streaming, webcams and digital camcorders. In some areas of the world, mobile phone services make a lot of profit from their adult mini-movies.

But the new generation of home and mobile games and game systems could be the key building blocks for tomorrow's entertainment center.

Take a look at the PS2 and XBox. They really are computers and they are sitting on top of the TV! They have wired/wireless ports. They have USB connectivity. That's why Sony and MS wine and dine the slave labor game developers so they can sell more home and away units.

We've been associated with video game industry since its gentle times. Back then Atari was aggressively attacking Sega and Nintendo. There were super systems Lynx (still outstanding in our opinion) and an elegant system called Jaguar. The name of the game was still the game.

But today's Game Developers Conference now is powered by Intel, Nvidia and ATI. We're talking serious money. It's so big Hollywood, cable companies and PC industry has suddenly become "interested."

There's a whole genre of serious games that are more real than real for simulation, training and education. One is being used to distract cancer patients as they are being treated. The military around the globe is pouring billions into serious games to stimulate a new branch of game development.

The game engines are creating animated movies. Leading this pack is Epic Games and their Unreal engine that is setting the stage for a new way of thinking about, interacting with and sharing gaming activities. And no it doesn't all have to be violent.

The gaming industry is so advanced that you can even experience in-game dynamic ads. The game company licenses a "spot" for a period of time in a specific location of the world. Since games are active participation, this is the type of advertising TV shows and Hollywood movies can only dream of selling.

If Sony's new boss can get the game system people talking with the Hollywood people and talking with their Vaio people he just might bring the company out of its doldrums. Sir Howard has a reputation of being a superb diplomat and if he can pull it off the Welshman may not get a Nobel Peace Prize but he should get a huge bonus.

MS wants to help the developers get their work "on the air" so much they gave away a thousand TV sets to them this year. They throw out SDKs to develop product faster so they can make more money. Guess what platform the new stuff will run on???

Gaming is already a multi billion-dollar industry. The suits, not the body piercers, call the shots.

These are the folks that push the huge multi-player (multiple units) games that can be played at home, in class, on the road or in the airport. Now the MPAA and RIAA are involved and BAM!! we're concerned about content protection.

The Digital World

Other than your government, about the only group that hasn't converted to true digital is your television (true most countries have converted we're waiting for the U.S. to catch up). We have a deadline - July 2005 - which is almost here!

By switching from analog to digital TV broadcasting, every country will be able to reclaim a lot of spectrum they can sell off for "other" purposes.

Problem is the deadline is a "soft" deadline. Hollywood says they won't let their content be shown until TV sets and other boxes ensure you can't copy and share the content. Networks and other content producers like that idea as well because they know consumers are really thieves in disguise.

Their solution is simple - add a broadcast flag in the programming so digital rights management (DRM) protection is "standard" on all TVs, DVRs, TiVos, Computers and similar devices that want to capture and use the DTV content.

Not surprisingly the CEA (Consumer Electronics Association) wants a fixed cut-off date (translation - sells more hardware). Of course if you only have an HDTV-ready set or - forbid - only an analog set that means the signal will have to be down converted so you can continue "enjoying" the content.

Theoretically you have until July to buy a DTV tuner card that ignores the broadcast flag which means you can digitally record and copy your TV shows. There are a number of products available for your entertainment center that will do this as well as stream the content to multiple sets or PCs in the house so you can watch them despite the DRM flag.

Of course that won't stop the MPAA and RIAA from marching up with a team of lawyers to claim you are stealing food out of their children's mouths. It's a challenge that will ultimately have to be heard by the highest court in the lands.

If you want flag free shows though you should probably buy earlier instead of later!

DVD Insider #31

  • CeBIT - Call Me, TV Me, DVD Me, Toy Me
  • CTIA - Call Me, IM Me, Video Me
  • Kids In Our Lives
  • Wireless Entertainment On The Go

CeBIT in Hanover is head and shoulders the world's largest tech toys show for business and consumer alike. They may have flopped in the U.S. but at home they are supreme even though it is nearly impossible to get a place to stay and downright impossible to see the entire show.

This year set new records with 6,270 exhibitors and "only" 480,000 visitors who must negotiate the 308,881 square meters of displays to find products they want to OEM, integrate, sell, cover for their audience. Companies build their big launches around the show with firms like Philips, Panasonic, Seimens, Thomson, Sony, Toshiba, Samsung, Hitachi and other global leaders having huge pavilion buildings they use only once a year.

Just as Silicon Valley used to get out-of-town when Comdex was on, Taiwan streets have to be silent with 702 firms from the area hawking their new wares. If it tells you anything, 1,600 of the companies came from the Pacific Basin.

The statistics aren't nearly as spectacular as the new toys like breathtaking new TV screens; home wired/wireless networking; next generation DVD and storage; big and little computers; OS and applications software; units that do everything and remotely look like mobile phones; and tech toys of every shape, size and gender. Everyone was on the forefront of delivering technology the consumer was demanding!

CeBIT is Huge Business

You definitely don't want to take the show directory with you as you trudge the aisles.

Everyone at the show was bullish because according to the recent GMIPoll people around the globe have an insatiable appetite for more technology. Everywhere in the world - except the U.S. - people want more PC power followed by TV and mobile phones.

What will they be buying? Cameras still lead the popularity race followed by wireless, home printing and DVRs. Cameras may pull printing along but they certainly haven't helped to date as people take zillions of photos only to fill memory cards or stuff them in non-descript folders on their hard drives.

People might be getting a clue though because there is an upswing in the sale of stand-alone and bundled software that arrange photos for writing to CD. In addition, mall and photo shop digital kiosks are getting a lot of traffic.

All of these product areas got a lot of attention at CeBIT.

While IBM may have sold most of their storage products to Hitachi, they certainly didn't sell their technology. It's going to be a couple of years away but their 1TB MEMS (micro electrical mechanism system) is what dreams are made of for system designers (Figure 4).

Toshiba blended its technologies together beautifully with home wireless AV networks, their version of next generation DVD (the HD camp) player and slim PC drives. NEC their ally in the push showed prototypes of drives that burn and play HD-DVD, DVD and CD.

The BD camp wasn't to be outdone as Panasonic, Sharp, Samsung and Sony showed recorders and burners they were already selling in the Pacific Basin and will be offering shortly in the Americas (at a hefty price point).

While Panasonic showed the "world's largest mass produced plasma" 65-in, Sharp hawked a similar sized LCD TV. With homes relatively small throughout Asia, we're not certain how people get far enough away to enjoy the 10-ft experience.

At the other end of the spectrum there were enough hand-held personal video players and video-empowered cellphones to satisfy kids who simply must have their MTV! Little Skype got tons of attention though with their capabilities and plans for VoIP and cellphones. But we'll hold off talking about phones till we discuss the CTIA show.

All of the PC folks were excited about showing their newest and shiniest. As Intel's Pat Gelsinger said at IDF we're about to embark on our second billion computers. While that sounds like a big number, Computer Industry Almanac recently reported (Figure 5) there is not only still plenty of room to growth but also a pent-up demand.

The results show why the U.S. is the biggest target for Dell, HP, Lenovo/IBM and the hundreds of clone makers in Taiwan and Mainland China. Wireless networking, multi-system homes and notebooks that to sell must have superb graphics, minimum 40GB HD, minimum 512MB RAM, WiFi, DVD burner and at least AV production are driving the sales. Toshiba, HP and Sony have set the pace with systems that have screens way better than Panasonic's TV and complete (yes, complete) entertainment capabilities.

CTIA Beauty Pageant

In less than two years this industry has come from being a backroom event to a fashion runway event where it's important to see and be seen. Phones are no longer phones. They are fashion statements that are bent on doing it all - steaming audio, MP3 playback, mobile TV, web browsing, IM, email and the occasional phone call.

It tells you something about the show though when Kodak shares the stage with Sean "P.Diddy" Combs who just happened to bring along his new clothing collection.

We received a message on our phone at the show from an editorial friend asking where we were at. We knew but didn't know our phone even had messaging capabilities! We still haven't read the manual to figure out how to use messaging but we did fumble through and delete the message (after calling him).

Ok so we're not the target customer for most of the service and phone providers but all we want is a phone that works darn near everywhere and say 12-18 hours of calling battery life. Our wish list would also be the ability to sync up with our email service, more (maybe even removable) storage and our calendar. That implies a keyboard designed for people with "normal" size hands. Yes we did look at the Treo and look at it again in its next generation because it's getting close…ok closer.

The rest of the features that excited people at the show were added for young people who have grown up not knowing a cellular phone used to be a 5-pound brick with a battery sidepack.

Cingular and Verizon got a lot of coverage because they announced they were going to connect their picture-messaging networks so their nearly 100 million subscribers could send bad photos back and forth. It must be a hot area because the phone folks are starting to deliver camphones with 2 and 3 MP cameras. Great but the screen is still the size of an old-fashioned matchbook cover.

When your kids tell you they have to have a phone because "everyone" has one, they aren't stretching the truth. In fact 44% of the tweens and teens in the U.S. have cell phones (Figure 6). They are heavily into text messaging (82%) according to Sorrent (a firm that develops and markets products and services to this market) and 84% play mobile games and 83% use ringtones (no wonder it's a multibillion dollar industry!)

Everyone was showing off the newer and better phones we'll expect to see … soon. Motorola that had to pull the plug on their iTunes ready phone at CeBIT did show their new clamshells that included speakerphone, instant messaging, MMS, 2-3MP cameras, VGA camera, MMS and push-to-talk features. NEC, Nokia, LG, Kyocera, Samsung and the others showed a wide array of new units that had CDMA and GMS world phone service.

We liked some of the GPS capabilities but what the H*** for? Hey, it's a phone. If I'm lost I'll call for directions!!!

The bigger news was all of the services you could tap into with your phone. Hollywood, broadcasters and everyone is bent on "serving you better." Even Larry Flint (Hustler) announced an adult service. Satellite radio, video on demand, email and the other services that will be introduced will only do one thing…drive up your phone bill. If you think a theater ticket is expensive, imagine paying for a movie to your service provider.

Here in the states monthly bills have started to rise (Figure 7) after years of decline. The services don't count for all of this - there has been consolidation just in case you haven't noticed. But there were rumors of tiered services much like your cable system at the show. Good because we didn't want to watch your TV show or movie nor listen to your music anyway and paying for something we don't intend on using seems counter-productive.

But the two shows give every indication of renewed vitality. The big winners seem to be the software and service providers.

As for us? We've got a great digital camera/camcorder, a cellphone that does more than we know how to do but we do have our eyes on a great new ultralite notebook with all the bells and whistles!!!


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