Technology Policy; Women And CE Focal Points Of CES Day Two

Federal Communications Commission (FCC) Chairman Michael Powell delivered insightful and interesting feedback on the top public policy issues facing the CE industry

Las Vegas, Nev., January 10, 2004 - Day two of the 2004 International CES touched on a wide range of topics from technology policy to telecommunications to retail and the impact of the female consumer on the consumer electronics industry. The 2004 International CES runs through tomorrow in Las Vegas, Nev.


For the third consecutive year, Federal Communications Commission (FCC) Chairman Michael Powell delivered insightful and interesting feedback on the top public policy issues facing the CE industry during a riveting one -on -one conversation with CEA President and CEO Gary Shapiro.

Touching on a range of digital transition related topics, from high definition television (HDTV) and voice over Internet protocol (VoIP) to broadband access and spectrum management, Powell summarized the FCC's 2003 achievements and 2004 priorities. The fact that HDTV reached the tipping point in 2003 and is close to achieving mainstream status in 2004 is cause for FCC and CEA celebration, he explained. The next step is to complete the transition to HDTV and reclaim the available spectrum, which will help pave the way for widespread consumer adoption of in -demand services such as Wi -Fi networks. Powell generated audience applause when he stated: "Government has to prove that regulation is necessary rather than making innovators prove that it isn't."

Broadband, free trade and fair use were among the issues discussed by a group of U.S. senators and representatives during the CES Congressional Panel. Moderated by CEA Vice President of Technology Policy Michael Petricone, Sen. George Allen (R -VA), Sen. Norman Coleman (R -MN), Sen. John Ensign (R -NV), Sen. John Sununu (R -NH), Rep. Joe Barton (R -TX), Rep. Steve Buyer (R -IN), Rep. Tom Davis (R -VA), Rep. Eliot Engel (D -NY), Rep. Gene Green (D -TX), and Rep. Daryl Issa (R -CA) addressed what they view to be some of the most critical policy issues facing the consumer technology industry today.

In addition to stressing the importance of rapid deployment of broadband and ensuring that broadband and Internet access remain free from state and local taxation, the panel urged for CE manufacturers to be vigilant about what Rep. Buyer called the "continued assault on free trade." The Congressmen charged the U.S. CE industry with taking a more active role to help support industry growth and expand global markets.

The panel also reiterated the importance of striking a balance between fair use and intellectual property rights, urging the CE industry and the content community to engage in a dialog to ensure a vibrant entertainment industry and a dynamic technology sector.

Heavyweights of the cable, satellite and high -definition (HD) content worlds convened to share their thoughts on HDTV content and delivery during the Industry Insider Series roundtable discussion. ESPN President George Bodenheimer proclaimed at the offset that there has never been a better time to be an HD fan given the impressive array of HDTV products on the market and compelling programming from ESPN HD. With more HDTV fans also comes a greater need for original HDTV programming, however, and this topped the list of next steps in the analog to digital transition.

Consumer education efforts and copy protection issues, including the "analog hole" and "down resolution" produced a healthy debate amongst the panelists and the audience, as well. In an argument for satellite delivery over local broadcasters, Echostar Communications Chairman and CEO Charlie Ergen touched on broadcasters' slow rollout of HDTV saying, "Put up or shut up," should be the attitude of federal regulators involved in DTV transition policymaking. Finally, Discovery Communications' Founder, Chairman and CEO John Hendricks pointed to the HD -DVR as the product to watch going forward.

Sprint Chairman and CEO Gary Forsee summed up Sprint's philosophy during his CES keynote presentation by quoting hockey legend Wayne Gretsky: "Don't skate where the puck is, skate where the puck will be." He said Sprint always asks, "Where do we go from here?" Forsee said the next frontier is video directly to the handset. He commented that Sprint is partnering with Samsung and Real Networks to bring consumers the Vision Phone. Not only does it have streaming video but also, in the second quarter, will enable mobile gaming with 3D graphics. Future versions will have location -based services and voice activated text messaging. Forsee said, "We provide a clearly defined value proposition at a fair price."

Real Networks' Chairman and CEO Rob Glaser wowed the audience at his International CES Industry Insider presentation with his vision to bring digital music everywhere. Glazer gave an overview of the nine major announcements the company made at the show this week, including the launch of its new and powerful Real Audio 10 player, which makes it easy for consumers to find, play and navigate all the digital media on the Web or in their own music collection. He also outlined several of Real Networks' goals for 2004, such as working to ensure that the film and video industries succeed in secure media delivery and making it easier to build and deploy music services. In addition, he cautioned the film and movie industry that there is an economic cost to being too cautious and advised them to move rapidly and flexibly to help develop sound solutions.

In a SuperSession moderated by Laura Heller, senior editor for DSN Retailing Today, panelists Dave Williams, vice president of Enterprise Research and Analysis for Best Buy Inc.; Susan Stoev, business research director for Eastman Kodak; Denise Yohn,
vice president of Corporate Strategic Marketing for Sony Electronics Inc.; and Katherine Rizzuto, vice president and publisher for Marie Claire addressed the mistakes the industry has made in its attempts to serve the female market.

All the panelists agreed that to do a better job of selling consumer electronics products to women, the industry must make a concerted effort to engage the female consumer on her terms. Among the solutions identified included providing point -of -purchase product and service demonstrations along with traditional displays that will provide women (and men) with a complete understanding of the product before they go home and have to rely solely on the product manual or manufacturers' customer support hotlines. Stoev pointed to the in -store product demonstrations they have conducted with their digital imaging products as the cause for not only increased customer satisfaction with their purchases, but a dramatic decline in the number of calls their customer service center received regarding products.

In addition, Williams pointed out that the success of the CE industry with the female segment depends on the diligence of retailers, along with manufacturers and the media. "Increased advertising and editorial presence, changes at the retail level, new, engaging products - none of these alone can help build a better relationship with women consumers," said Williams. "We need for retailers to come together with our manufacturing and media partners to really make a change."

The International CES Retail Power Panel featured the top retailers in the consumer electronics market: Vice Chairman and CEO of Best Buy Brad Anderson; Chairman, President and CEO of Circuit City; CEO of CompUSA Larry Mondry; Chairman and CEO of RadioShack Corp. Len Roberts; President and CEO of Tweeter Home Entertainment Group Jeffrey Stone; and moderator, CEA President and CEO Gary Shapiro.

The panel touched on some of the challenges and opportunities facing retailers in the changing consumer technology market. Stone said, "We are seeing the morphing of the IT world and the CE world." All of the retailers were upbeat about the retail environment in 2004. Anderson said, "2003 was a watershed year for us. We had robust growth across all categories." Superior customer service will help retailers differentiate themselves from discounters such as Wal -Mart, Costco and Target and new competitors in the CE space such as Dell, Gateway and even CompUSA that recently entered the CE arena. Mondry explained how his company uses a consultative sales process that includes training on how to use the products properly. "Customer satisfaction levels have gone through the roof," he said.

Rounding out the day, more than 400 industry executives and government officials attended CEA's annual Leaders In Technology Dinner at CES. The evening's speaker, Gerard Kleisterlee, president and CEO of Royal Philips Electronics, gave a wake -up call for the audience, urging manufacturers to make products simpler to use. He argued that the industry needs to spend less time on developing devices that do everything and instead develop intuitive devices that are easy to operate. He called for business and government to work together to advance a common set of principles that put consumers first. He then outlined three rules for product development: 1) Be singularly focused on consumers, 2) Make products easy to use and 3) Add value for the consumer.

For the latest news on CES, visit www.cesweb.org.

About CEA:
The Consumer Electronics Association (CEA) is the preeminent trade association promoting growth in the consumer technology industry through technology policy, events, research, promotion and the fostering of business and strategic relationships. CEA represents more than 1,300 corporate members involved in the design, development, manufacturing, distribution and integration of audio, video, mobile electronics, wireless and landline communications, information technology, home networking, multimedia and accessory product,
as well as related services that are sold through consumer channels. Combined, CEA's members account for more than $90 billion in annual sales. CEA's resources are available online at www.CE.org, the definitive source for information about the consumer electronics industry.

CEA also sponsors and manages the International CES - Defining Tomorrow's Technology. All profits from CES are reinvested into industry services, including technical training and education, industry promotion, engineering standards development, market research and legislative advocacy.

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