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CES 2006 in Review

Some Good News, Some Bad News...and Some Just Plain News About Products and Technology at the Show

Dont you hate it when youre talking with someone, and the conversation starts with …Ive got some good news…and some bad news? When you hear that, there is that unmistaken sinking feeling that the bad news might outweigh the good, even though that isnt always the case. Indeed, in some cases the end result is that the news is really neither amazingly good or shockingly bad, its simply news.

Essentially, the same scenario applies when describing this years International Consumer Electronics Show (CES), held in Las Vegas early in January. There is good news, bad news, and, well, no news. Putting a bit of brief analysis behind the CES headlines, and as a follow-up to where the world of consumer electronics is heading as it affects the customer installer, lets examine where some of the trends identified last month sit, post-CES, particularly where the direction may vary from the way the general media, business press, and Internet forums and the blogs are pointing.

Location Shift. Wow, did the general media ever seize on this one as a putative star for CES 2006? Perhaps, but what does the notion of capturing, storing, managing, and transferring media to devices used to play content back away from home really mean? The good news is that if the concept takes, you will certainly see an increase in the call for expanded, higher bandwidth, home network systems. Youll want to make certain that you have the product lines and installation savvy to install and configure mass storage and access to a wide variety of content aggregation and download sites.

Thats great, but there is potential bad news here, as well. Managing all of this isnt always as simple as it seems. Its one thing to have the good news of value-added revenue from consumers paying to have their CD libraries ripped, but some of the new content transfer systems are not nearly as simple as iTunes or TiVo. Can you teach your clients how to manage these systems on their own? Is the hidden complexity of this going to bring more headaches for you than profit?

Thats where the no news comes in. Sure, its neat to show off Lost on an iPod, but will people soon get tired of the novelty? Outside of urban commuters stuck on the likes of the Long Island Railroad, who is going to watch TV on a small, relatively low-resolution screen with audio via ear buds? (I sure hope its not the guy in the BMW next to me on the 405 Freeway going 10 miles over the speed limit). Let the media promote this as they will, but before selling it, make sure the client wants it.

SED. After about 18 months of strictly invitation only private showings, Toshiba and Canon both let the public in on SED video displays at CES. This year you didnt need an invitation to see it; all you had to do was wait in an occasional line. Everyone was now able to see the good news that us press types had seen at last years show in a closed-door preview: This thing really looks good, with impressive color, great contrast, and modest power consumption.

The bad news is that some in the know were concerned that the units shown were the same 36-inch-wide 720p configuration seen before and that the 55-inch-wide 1080p models that were promised in the past for market availability in late 2005 or early 2006 are now said to appear some time toward the end of 2006. This can only be described as a delay against prior expectations, and that isnt good news.

There were even those who point to this as no news, casting doubt on whether or not the window for another flat panel display technology to compete with LCD and PDP at a higher price is still open. Maybe a better way to state it is that while your clients may ask for SED based on the show reports of great pictures, for now there is really no more news other than that more of us have seen it.

Super-Dooper-Sized PDP Screens. The good news is that if they really wanted to, plasma manufacturers really can make large-sized displays. Last years worlds largest was a 102-inch-wide unit from Samsung. This year LG also showed a 102-inch PDP, but Panasonic trumped them by upping the ante with a 103-inch set in its booth.

This is great, but the bad news is that even though they can make these behemoths, they probably wont. Even worse, you have to explain that to someone who doesnt care how much it costs. Instead, put that money to good use and up-sell to an even larger front-projection screen with a three-device imaging system. Youll be able to set all of that up for much less than a 102-inch or 103-inch PDP would costif you could buy itor even more problematically, get it through the door! The no news here is that these are technology stratagems that will probably only be seen at trade shows one or twice a year.

Thin-Depth RPTV Sets. Starting with some old, bad news: The Thomson and InFocus 6.7-inch-deep DLP rear-screen sets were a good idea, but the fact that the InFocus model has been seen twice on means that it didnt sell well, even when offered at a significant discount. Sure, it seemed like a good idea at the time, but the long below-the-screen chin on these sets is part of what made them a non-starter. Hopefully, that rocky start wont get in the way of some good news.

At CES there were technology demos of tabletop RPTV sets that were only 10 inches deep. No, thats not PDP or LCD deep and still 25 percent deeper than the Thomson/InFocus designs, but at 10 inches the DLP, D-ILA, and SXRD sets that we saw at CES in the shallow depth category not only had great pictures, but they had very short chins that set the bottom of the screen less than three inches from the bottom of the cabinet. These are great, bright pictures, with cabinet depths that are still comparable to the total footprint of a similarly sized LCD or PDP when on a stand at competitive pricing. What could be bad about that? Not much, other than the fact that these sets wont hit the market until very late this year or some time in early 2007. Youll simply have to do without them for the time being.

Two-Way Interactive Cable Boxes from Recognizable Brands. When there were two-way interactive cable boxes shown with Comcast on the front panel at the Samsung and Panasonic booths at CES some might have thought that after a five-year wait, the new millennium had, perhaps finally arrived. Did seeing these boxes mean that there was good news in that retail sale of cable boxes, long promised as part of the deal that brought us the CableCards portable security system?

No such luck. These boxes, which LG is also developing, designed for compatibility with the OpenCable Application Platform (OCAP), will only be distributed by the cable MSOs as Comcast, along with Time/Warner, Advance/Newhouse, Cox Cable, Charter and Cablevision roll out tests of the OCAP platform during 2006. Sure, wed all love to see the opportunity to not have to depend on the cable company to source two-way cable set-tops, but it just doesnt seem as though it is ever going to happen.

Extend this out into the highly promoted CableCard itself, which certainly has helped some dealers sell up-scale DCR sets. But if youve dealt with the local cable company office to actually try to get and install a CableCard you know that can end up being bad news.

Theres no news for now, but work is definitely underway to finalize a standard currently known as Downloadable Conditional Access System (DCAS). This will do away with cable box and the CableCard by embedding a chip in a display or set-top device that not only allows the two-way interactivity that the CableCard isnt able to permit, but it eliminates the need for obtaining a Card and waiting for the cable guy to show up at a clients home to do something that youre probably much more qualified to take care of. Is the eventual arrival of DCAS part of the reason some manufacturers seem to have cut back on the number of CableCard-equipped TV models in the new model lines shown at CES? Thats news no one is talking about, but anything is possible.

A note of cautious news in all of this is that both of the major cable set-top manufacturers, Motorola and Scientific Atlanta (which is in the process of being acquired by Cisco) are both expanding their lines of networked set-tops with DVR and even DVD-recordable capabilities. These models certainly will not be available for retail sale, so be careful as they show up in the service areas of your clients. They provide competition to DVR products that you sell, while at the same time provide opportunities when the cable installer vainly tries to integrate a cable box with the high-end control system that you have previously programmed and installed. Nothing shows the value of a capable custom installation company than when someone else throws up their hands in disgust at a task that your team can handle with their eyes closed.

LED Illumination for LCD and RPTV. This was much more widely shown at CES than had been anticipated in the pre-show reports. Other than having to wait a bit longer than many would like for LED illuminated LCDs, particularly in more affordable and smaller sizes, this is all good news. For LCD displays, using LEDs rather than conventional Cold Cathode Fluorescent Lamps (CCFL) offers (in most, not all of the prototypes seen at CES) better color and faster response time. From an environmental standpoint, replacing CCFLs with LED is very good news, doing away with the heavy metals that are part of the CCFL tubes.

As to LED illumination for RPTV sets, that, too, is good news. Youll have to judge the brightness and color quality for yourself, as it varies from brand to brand, model to model and from DLP-based to LCD-based to LCoS (D-ILA and SXRD) based. Lets see: no more bulbs burning out on New Years Day or Super Bowl Sunday, no more color wheels with their accompanying rainbow effect and high-pitched noise, and considerably less heat to dissipate.

HD-DVD and Blu-ray Disc. The bad news first: Unless something totally unexpected happens, there will be two competing high-definition optical disc formats; it simply seems unavoidable.

The good news? There is title support from the studios for both HD-DVD and Blu-ray Disc (BD), and we leave it to fans of the movies in question to see which format wins out. To be certain, BD has more studio support, but we all know that hits happen in a random dispersion among all the studios over the years. Support of one format or the other by a specific studio does not mean that the format will have the new hits. Toshiba and Thomson will have players at $499, with Toshiba also having a $799 step-up model. First shipments were quoted for March, but many are still skeptical that the final parts of the AACS scheme for content protection/copy control will be completed in time to allow that.

For BD players, pricing is higher, and for the custom installer that isnt necessarily bad news. Pioneer Elite is scheduling a $1,800 player with many step-up features for May, with a computer-drive BD recorder due in the next month or so at $999. Samsung is currently the lowest priced BD player with a $999 model in the works for the first half of the year.

The true wild card here remains Sonys PlayStation3. Sony Consumer Electronics America (SCEA) is still mum on pricing and introduction date, which has been rumored to be anywhere from $600 to $999 at any time from May to November. As mentioned last month, well have to wait until E3 in May to get the details. This mixes the news, as a low price and early year into date may be bad news for higher priced BD players from the consumer electronics brands most installers sell, while a high price and early date will drive consumers to CE branded products.

The no news in the BD vs. HD-DVD story? By and large there have been few announced commitments to one format or the other and virtually product announcements by custom-oriented brands. Keep this in mind as you constantly scan the more mainstream brands to determine who makes it on to your line card so that you at least have some access to both formats.

Heres a brief run-down of more news from CES, and yes, it is mostly good.

Good News:
DNLA may mean new life for boosters of 1394/Firewire technology.
There will be a significant number of 1080p PDP displays in a variety of sizes and from a wide range of manufacturers as the year progresses.
Portable game players will have an increased selection of UMD format movies to view on their PSP games. Apparently, the studios are finding that these sell quite well.
Pricing seems to be stabilizing for PDP and LCD flat panels, and the door appears to be closing on the ability of new second- and third-tier brands to disrupt the flat-panel display market.
Movie release windows for the HD formats may be closer to theatrical release than conventional DVD releases.
More XM Ready multi-channel and stereo receivers from a wide variety of brands, and the promise of a Sirius Home Connect program that may, in time, let Howard Stern fans listen to their favorite deejaythrough A/V receivers and other products that you, rather than the big-box retailers, sell.
HDMI 1.3 is in the works to greatly improve the usability, throughput and functionality of the widely used digital connection methodology.
Bad News:
HDMI 1.3 isnt going to be seen in products until late this year, if then.
Very few HDTV set-tops will bring high def programming to all those Ready sets sold in the past and the monitors being sold today. Make certain that you have access to the few HD set tops sold, or that you have a satellite alternative or good relations with the local cable operator!

No News:
Few new AVR products with HDMI connectivity, indeed, few new AVR and processor announcements at all. Look for these to surface a bit later during the course of the year than they have in the past, with things falling into sync by September for CEDIA Expo.

Uncertain News:
TiVo curiously missing from CES.
Major CES presence from Microsoft and Intel (in booths directly across from one another for the first time) signal that the computer industry sees great potential in consumer electronics and custom installation.
If forced to choose between good and bad to describe the 2006 edition of the CES, once definitely has to say the show, itself, was very good, if not simply getting too big. Beyond this first look analysis there was much more in the way of product and category specifics, and as the year unfolds well bring both more of the news from CES that space did not allow for this month, as well as the updates on the stories that got their start or a major push into our industry at CES.

Michael Heiss ([email protected]) is a technology and marketing consultant based in Los Angeles.