CES Roundup Part Two: The Year of Connectivity

By Carolyn Braff

More than 110,000 people attended CES 2009, down significantly from last year’s 141,000 visitors, but there was plenty of buzz on the show floor. As the
New York Times put it, the show’s overarching theme was that every device in our lives is becoming a computer connected to the Internet.

The most important announcement for sports broadcast networks are new televisions from LG, Samsung, and others will let viewers watch movies from Netflix and other Internet sites. In two years, 90% of all Sony products will connect to the Internet, predicted Howard Stringer, the chief executive of Sony. And Yahoo! announced a new series of widgets that will be able to reside on the TV screen as the viewer watches a program, giving new meaning to the phrase
interactive television.

For the companies that make the devices, however, there is a darker side: if the most exciting thing about your phone or truck or TV is the Websites you go to and the software applications you download, then the device itself is less important. That is what happened to the computer industry, with its relentless price pressure and indistinguishable products.

“We are commoditizing new technology,” said William Wang, the chief executive of Vizio, which has become the country’s third-largest seller of televisions after Samsung and Sony. Now that flat-screen high-definition televisions have become commonplace, he said, “the technology shifts are not that dramatic.”

The Palm Pre phone, unveiled at the show, promises to make it easy to call friends by looking up their numbers on Facebook. The touchscreen device and the new operating system inside it, WebOS, aim to break new ground in the competitive smart-phone market. The phone’s selling points include an emphasis on fast Web browsing and efficient multitasking, a sophisticated interface, and the ability to charge on a special platform without the need to attach a cable.

Increasingly, what will differentiate one TV from another is the software it runs and the Internet services it connects to. Even Nokia, which sells more cellphones than its three nearest competitors, says that much of its future success will come from selling services, ranging from music to maps, that operate on the phones.

Another approach is to try to embed computer chips with Internet connections, all of which keep getting cheaper and smaller, into ever more unusual devices, so that, even as electronics manufacturers struggle with the extremely sluggish economy and relentless competition, they can look forward to finding ever more shapes and sizes in which to embed their gadgets.

In an announcement at CES, major TV-station groups unveiled a groundbreaking mobile digital TV service under their Open Mobile Video Coalition initiative, MediaPost reports. The service, which uses a new ATSC Mobile DTV system that transmits stations’ signals directly to mobile devices, is debuting on 63 stations in 22 markets, covering 35% of U.S. television households. Markets include New York, Philadelphia, Seattle, Denver, San Francisco, Chicago, and Miami.

Some 25 major broadcasting groups in OMVC include NBC Television, Gannett Broadcasting, Sinclair Broadcast Group, Fox Television, Belo Corp., Grey Television, Scripps Television, Hearst Argyle Television, Ion Media Networks, and LIN Television. TV stations view this project as a salvation of sorts for their flagging business, especially as their customers move away from traditional TV platforms.

A key piece of the initial plan is that it does not rely on mobile carriers for signal transmission. Another important element is that it is a free service; at least initially, it is ad-supported.

“The standard has the ability to be up-sold,” says Brandon Burgess, OMVC president and chairman/CEO of Ion Media Networks. “But free is a good starting point.”

As part of the announcement, a number of equipment manufacturers and technology companies have signed on to the project, including LG Electronics, Kenwood (for in-vehicle mobile units), Harris Corp., Samsung, and Delphi.

The coalition is also working with Nielsen Media Research on getting viewer-measurement service but does not preclude looking at other non-Nielsen systems.

In regard to marketing to consumers, TV stations are well suited to offering their own TV promo time, especially when it comes to their news, sports, and local programming, Burgess says. Stations would be encouraged to do this, he says, since “the implementation costs of [mobile TV] are very inexpensive.”

In the initial 22 markets, Burgess says there will be an average of three to five local TV signals. But this is only a starting point. “We might encourage MTV or ESPN to be partners.”

Cisco Systems expects several cable providers to initiate field trials in the second quarter of its next-generation set-top, the Explorer 8600, the company’s first to provide high-definition multiroom DVR features,
Multichannel News reports. Multiroom DVR allows subscribers to access recordings on a master DVR from any set-top in the home. The Explorer 8600 series, available with up to 500 gigabytes of disk storage, supports the multimedia over Coax Alliance (MoCA) 1.1 specification to distribute high-def video over existing in-home coaxial cable.

“That’s clearly a key item for us and our cable customers,” Dave Clark, director of product strategy and management for Cisco Systems’ Service Provider Video Technology Group, said at CES.

Adding multiroom DVR will enable other media-sharing capabilities, Clark noted. The 8600 supports the Digital Living Network Alliance (DLNA) and Digital Transmission Copy Protection (DTCP) over IP standards for content-sharing.

The Explorer 8600 also will include an Ethernet port — the first Cisco/SA box to do so — as well as USB 2.0, DOCSIS 2.0, tru2way support, 1-GHz tuners, and MPEG-2 and MPEG-4 decoders. The set-top’s processor, Cisco’s sixth-generation chip set, is more powerful than previous versions, providing 1,000 million instructions per second (MIPS).