With a couple of hours to go before this year’s technofest in Las Vegas gets under way, I thought I’d issue a friendly warning to the growing number of firms (Intel, Samsung, LG are culprits so far) who seem to be planning to major on “Smart TV” as a key theme of this year’s show. Even before the doors open we already have a quotation from LG Electronics' Baeguen Kang: "Smart TV is an inevitable trend: As people experienced smartphones and tablet PCs, the larger screen on a TV is very attractive for apps and Web content.” So whatever people do on phones and PCs, they will inevitably do on their TVs? If this is an indication of the strategic thinking behind many of the innovations we are about to see unveiled this week, I can scarcely imagine the horrors which await us. When will manufacturers learn? As Google’s disastrous first attempt at connected TV has neatly demonstrated, people do not want the web on TV. How many times do we have to go through this learning process? What people want on TV is video content, and if that’s going to be “smart” it had better deliver some level of intelligence about what video content viewers are likely to enjoy. As I said in our (free to download) 2011 Predictions report, television viewers don’t want a million things to choose from: they want their TV to tell them what they are likely to enjoy. Surprise me, enlighten me! That has value, and if it unexpectedly appears at this year’s show I’ll be the first to label it “smart”. David Mercer

This year’s IFA www.ifa-berlin.de nicely summed up the opposing challenges facing the next wave of TV technologies. The plethora of new connected TVs on display from every major manufacturer seemed barely able to cope with the variety of Internet and managed content and applications available. By contrast, the many 3D-enabled TVs seemed starved of suitable material with which to show off their capabilities. Watching the 3D story unfold at IFA also served as a nice hors-d’oeuvres to this weekend’s IBC in Amsterdam, when you can learn more about industry and consumer adoption of 3D at our Analyst Forum: it’s not too late to register at www.strategyanalytics.com/ibc2010.html. Given that internet TV, or connected TV, or “smart TV”, depending on your preferred nomenclature, has been at least a decade in the making, perhaps it is inevitable that it seems to be making faster progress towards mass market adoption than 3DTV, which, in spite of decades-old visions, has really only begun to gather speed in the last year or two. Nevertheless, it was clear from duplicate and triplicate demonstrations of the same 3D animated movies and football games that the dearth of 3D-originated content remains 3DTV’s biggest challenge. Which makes it all the more strange that most of IFA’s big names were extremely reluctant to promote the ability of their 3DTVs to turn bog standard 2D into 3D content, on the fly and with no additional hardware required. As various Sony, Panasonic and Samsung representatives explained, to one degree or another “in-set” 2D-3D conversion was not yet considered “good enough” to warrant live demonstrations to the German technology-buying public or indeed the rest of the industry. Sony came close to giving the game away: the information board behind a line of 3DTVs noted the fact that any 2D content could be converted to 3D “by pushing a button on the remote control”. But when asked to demonstrate this functionality we were informed it was not possible on the show floor. Samsung’s stand also featured a large number of 3DTV demonstrations, all of which featured 3D-originated content of one sort or another. The only real time 2D-3D conversion demonstration featured games material. Other 3DTV sets around the stand could be switched to 3D conversion but staff were unable to supply glasses so that the effect could be appreciated. Panasonic’s representative was open in admitting that the company was behind in devlopment of in-set 2D-3D conversion technologies, and only included it as a feature “because everyone else was”. I got the strong sense that staff on many stands were tired of deflecting questions about 2D-3D and that their lives would have been made slightly less tedious if demonstrations had been available. The major exception to this was of course Toshiba. Of course, because Toshiba continues to push its Cell processor technology as a platform for real-time rendering and upscaling of 2D to 3D content. Toshiba was the major firm least backward in coming forward with in-set 2D-3D conversion, offering a number of demonstrations open to public view. These included one which claimed to offer conversion of “regular” 3D TV broadcasts to “full” 3D. The demonstration offered side-by-side comparison of otherwise identical content. To my own eyes this was not too impressive, with artefacts clearly visible in the upscaled version, even if the overall effect from a distance was greater sharpness. It was certainly a long way from matching the Blu-ray 3D experience. Toshiba also demonstrated “standard” 2D-3D conversion, which was less problematic although mild “ghosting” effects were visible. However the 3D effect, while obvious, lacked any great depth. Having said that Sony’s TV people were not discussing “in-set” conversion, around the corner the company’s Vaio group had probably the most impressive real-time 2D-3D conversion I have yet seen. A prototype Vaio used a combination of hardware (graphics card) and software (both in prototype development stage) to convert 1080p MPEG4 video to full HD 3D (2*1080p), the equivalent of the Blu-ray 3D standard. The product is currently targeted for Q1 2011 availability as a notebook product. 3D was selectable on the prototype by pressing a 3D button. Clearly the processing power required for this impressive demonstration is unlikely to feature in a TV set in the near future, but it is surely only a matter of time before it becomes widely available in mass consumer products. The sensitivity around 2D-3D conversion was the story that dared not speak its name at this year’s IFA. Yes, the technology is immature and the quality falls short of “true” 3D productions. But that will change and the content-owner dam which is currently holding it back will eventually break. As we will see at our 3DTV Analyst Forum, the TV production industry itself remains unconvinced that it should invest in 3D technology until issues such as this begin to settle down. Meet Our Analysts: 3DTV Analyst Forum at IBC 2010

Returning to temperate climes after my first “summer” visit to Las Vegas, I am more amazed than ever at Nevada residents’ ability to withstand daily temperatures of 40 degrees plus and practically zero humidity. At least I now know what 108 Fahrenheit feels like. The contrast between this and a proper British summer (a few days of 25C followed by cool cloud and rain) could not be more stark. Las Vegas’ Mandalay Bay was the venue for Cisco’s annual customer gathering, which this year also brought together a hundred or so analysts for in-depth discussion of product and commercial strategy. The highlight product announcement was the Cius, as reported by my colleague, Susan Welsh de Grimaldo. While the company has not officially announced pricing, I expect it to be closer to $1000 than $500. Cisco is quite clear that the Cius is positioned as an enterprise solution, and these prices are likely to prevent much leakage towards “unofficial” consumer markets. What was most interesting, perhaps, is the genesis of the Cius within the Cisco organisation. It was obvious from many conversations that few people were aware of its development until very shortly before its unveiling. Even John Chambers himself claims to have been unaware of it until two months ago. If the product proves successful it will be further justification of Cisco’s innovation in organisation and management which allows dynamic cross-fertilisation of ideas across multiple teams. The other news centered on home energy management, where Cisco is launching a “Home Energy Controller” allied to Cisco Energy Management Services, which will be offered by utility companies to help consumers understand and control their energy consumption. The Controller uses Zigbee, WiFi and other home networking technologies to exchange data with and, potentially, control a variety of home devices. Much of our discussion with Cisco execs centered on the challenges and opportunities for service providers offered by OTT video, as well as the potential for telepresence in the home environment. Telepresence has a been a success for Cisco in the corporate market, and it is still on track to bring a consumer solution to the market by the end of 2010. It still strikes many people, both in the industry and consumers, as odd that Cisco should have a serious consumer strategy. While its brand presence is growing, not many would consider it as a competitor to the Sonys, Samsungs and Apples of the world. And there is no doubt that the company’s financial power is built on its core network switching and routing market dominance. Cisco does have key positions in home networking and set-top boxes, as well as the TV and broadband service provider space, but the jury is still out on whether Cisco itself will become an overall leader in consumer markets over the next decade. But consumer players cannot ignore Cisco as an influence on market direction. Its innovation processes, as demonstrated by Cius, will combine with its financial strength to create a wave of consumer innovations over the coming years. Many may fail, but it will only take a few to be successful for rivals to feel the heat. Client Reading: Chasing the Elusive IPTV Business Model: NDS, Cisco and Comcast to the Rescue?

Cisco built up yesterday’s big news announcement as something “that will forever change the Internet and its impact on consumers, businesses and governments”. The chances are slim that more than a tiny fraction of consumers, businesses and governments will ever actually encounter the catalyst for this revolution, namely the new CRS-3 router, which will help service providers deliver the vast quantities of video that people will expect to consume over the internet in the coming years. So in that sense, the announcement was a slight disappointment, if none the less significant. Shortly beforehand, the news arrived that Cisco had also became a strategic investor in SiBeam, Inc. Also currently unknown to most consumers, perhaps, but SiBeam’s wireless video technology could become ubiquitous over the coming decade. We’ve covered it many times, most recently here. For some years SiBeam has been in a race with various other technology developers, and primarily Amimon, to bring wireless distribution of high-definition video to the digital home. While early consumer products have reached the market in limited numbers using both SiBeam and Amimon solutions, sales performance has been restricted by high prices. We are also hearing that Amimon’s technology has not proved as reliable as it needs to be, and as we predicted before, we believe the momentum is in the direction of WirelessHD, if there is indeed going to be a single de facto standard. Cisco joins other major consumer technology investors Samsung, Panasonic and others in backing the WirelessHD 60 GHz technology. So as well as investing in the future of internet video distribution, Cisco is counting on tomorrow’s in-home video networking technologies to build its vision of a world of networked video. David Mercer Client Reading: Wireless High Definition Appearing Soon at a Home Cinema Near You

Pioneer’s plasma TV business is the latest casualty of the recession. The company announced today that it is ceasing TV development immediately, and will close its TV business altogether by March 2010. So it looks like Panasonic will be the only major Japanese vendor left holding the plasma baby in 2010, as I discussed 18 months ago. Koreans Samsung and LG will help to keep plasma going, but are increasingly focused on LCD and well behind Panasonic in the race for PDP market share. Pioneer tried in vain to hold the line on premium, high quality TVs. In fairness it was always going to be difficult even in good economic times. Pioneer’s TVs were generally regarded as some of the best on the market and served as an aspiration for those who could “only” afford a Sony or a Samsung. But the gap between the “mass market” and Pioneer was undoubtedly getting narrower, and Pioneer was going to get caught in the squeeze sooner or later. When Amazon is offering Toshiba 42” 1080p LCD TVs for £499, it becomes harder than ever to justify paying four times the price for a similar sized Pioneer, especially when most retail stores are simply not capable of, or interested in, demonstrating the differences in picture quality. The severe downturn in consumer electronics has accelerated the impact of plasma’s relative decline on Pioneer. What is left of the company’s display technology expertise now resides with Panasonic, and even in this downturn that huge company should be powerful enough to keep plasma alive for a few more years. It will be a long and lonely struggle. Client Reading: Digital Media Devices Global Market Report

I saw Panasonic's demonstration of Blu-ray-based 3D system this morning. Demos are running in two small theatres on the Panasonic booth. They consist of 10 minutes of various movie, sports and games clips. Viewers are required to wear glasses. The material runs from a BD disc in a modified Blu-ray player. I’ve heard many positive reactions to 3D Blu-ray here at the show. It certainly seems to have a wow factor for some viewers. While the demos are certainly impressive, I have two general concerns. The first, which I highlighted yesterday (http://www.strategyanalytics.com/blogs/343/), concerns headwear. The second concerns the impact of the quality of the material. It was quite noticeable during the Panasonic demonstration that some material is considerably more effective in 3D than others. Perhaps it’s just my eyes, but some of the early sports clips involving many rapid and complex movements lacked clarity and could become quite difficult to watch for any length of time. By contrast, the brief clips from this year’s Beijing Olympics were immensely impressive. Apparently these were captured with special dual-camera systems from Panasonic, and the investment clearly paid off. But that is the point: before 3D begins to penetrate the sports and other broadcast sectors producers will need to make significant investment in upgrading cameras and other studio equipment. No doubt that is something Panasonic, one of the leading vendors in this market, is looking forward to. Likewise with movie content, fast action scenes still clearly present a challenge. Most of the other movie clips were impressive, and this is encouraging for the 3DBD opportunity which will clearly depend primarily on movie content. Panasonic is hoping for a 2010 launch, but much will depend on whether it can persuade other CE players and partners to unite around a single standard. That will be absolutely vital if 3DBD is to become successful because content providers will not want to adapt their productions to incompatible technology platforms. It also looks like something I wrote yesterday may have to be revised slightly. Samsung is demonstrating technology that turns any HD content into 3D, again with the user having to wear glasses – these link to a TV emitter via infra-red, similar to Nvidia’s system. The demo includes Xbox games, so it looks like 3D console gaming could be closer than we thought. The technology depends on processing chips within the TV, so it will be some time before it becomes widespread. In the meantime I’m sure Microsoft will be looking at alternative approaches to upgrading its Xbox platform for 3D. Client Reading: Digital Media Devices Global Market Report

We saw impressive demonstrations today of Nvidia’s new GeForce 3D Vision glasses. These use two LCDs which synchronise with special 120Hz monitors via infra red emitters. Although Nvidia claims that 3D effects are apparent with most existing PC games, it has currently approved around 300 games. The certification process is a major investment for the company, but necessary in order to ensure user confidence. True 120Hz monitors are now available from Viewsonic and Samsung. Viewsonic has branded its 22” model FuHzion, and it retails for $349. The company believes this price point is now right for the mass market. Personally I think they are being over-cautious – It’s not so long ago since standard 15” and 17” LCD monitors were priced well above this level, so $349 for a 22” with the latest technology seems almost a bargain, at least for hard core gamers who are looking for the best possible experience. Games are the obvious place to start for the coming 3D revolution, since many games have 3D capabilities built in from day one. It will begin with the hard core PC games community and spread out to other PC and eventually console users. The latter will depend of course on whether the major platform owners choose to introduce 3D technologies, and they may be reluctant to do so until 3D capabilities are more widespread in the HDTV market. Our position has always been that most consumers are reluctant to use specialised eyewear when watching TV. Philips and other companies have demonstrated much improved eyewear-free solutions in recent months. But there’s no doubt the various glasses-based approaches are also improving and becoming more comfortable and effective. The ideal solution in television and video will not depend on glasses, but if that can’t be deployed to the mass market any time soon, Nvidia’s technology and others like it may begin to gain wider acceptance. Client Reading: Digital Media Survey: An analysis of US Online Premium Video Users

At Pepcom's Digital Experience press event we chatted with Yahoo about their approach to web TV. It certainly seems the company, which has been struggling in recent times, has finally been making some progress in its TV strategy. It has signed deals with Samsung, Sony, LG and Visio to incorporate its widgets engine in their internet-enabled TVs. All this talk of internet on the TV screen really does make me feel my age. When I mention that we were having similar discussions 10 or even 20 years ago there is rarely any recognition that interactive TV has been tried many times over, and has usually failed. Of course today's innovators are convinced that the power of today's internet can solve many of the problems that prevented previous interactive TV platforms from becoming successful. There's no doubt that a fast broadband connection straight to the TV is a far cry from those early days of dial-up internet connections. But the question of whether or how many consumers really want to see anything but "television" or "video" on their "TV set" remains unresolved, whatever the technology used to bring them these exciting new services. Yahoo seems to have convinced its partners, for the moment at least, that there is some level of interest in the ability to have internet-based mini-applications on various parts of the TV screen, showing the usual weather, stock prices or latest news. Strategy Analytics research suggests that this type of application is not in fact at the forefront of TV viewers’ expectations from internet TV browser technologies. In fact in a recent survey we carried out for Oregan Networks by our Digital Home Observatory team, widgets and user interface customisation were ranked among the lowest priorities. The highest, not surprisingly, were the ability to access video on demand services from the internet, and to search for video content already stored on the home network. But in various demonstrations we have seen here at CES, not just at Yahoo, video is not given the priority consumers clearly expect. That may well reflect the fact that the various web TV value chain partners – TV manufacturers, platform developers, content owners – are far from confident that today’s internet connections can deliver the sort of video experience consumers are expecting on big screen TVs. And they are obviously right to be nervous in this respect. It will take time and lots of education to overcome the obvious quality and reliability issues. But to build demand for internet enabled TVs there needs to be a greater focus on internet-based video and television services, because this is what consumers think internet TVs should have as a core capability. Everything else is simply icing on the cake, and some people clearly prefer the cake without the icing. Client Reading: Digital Media Survey: An analysis of US Online Premium Video Users

Following on from my previous discussion of Blu-ray quality broadcasting claims, here is a further sign that confusion reigns when it comes to discussing what is and what isn't "Full HD" video. On September 1st Motorola issued a press release about a deal to provide Deutsche Telekom (T-Home) with IPTV set-top boxes which included the following statement: "Within the scope of the contract, Motorola will provide T-Home with its VIP1616E set-top -- known to T-Home customers as Media Receiver 300 Typ A. With the device, subscribers to T-Home's Entertain service will be able to view premium sporting content in full HD." Now my ears are obviously attuned, given the attention the Blu-ray/DirecTV/Dish saga has attracted, to any mention of the phrase "Full HD". I was particularly impressed with the suggestion that sports content would be available in 1080p, since I know of no regular capture of live sporting events in this format. With less than 2% of European homes watching (720p/1080i) HDTV today, the industry desperately needs to make its message clear. And major TV manufacturers like Samsung are using terms like "Full HD" to market the 1080p-capability of their large screen TVs. So what are consumers supposed to make of suggestions that Deutsche Telekom is now offering sports content in "full HD"? I would not blame them for thinking that football matches would be available in 1080p, and it has taken a week for Motorola to confirm to me that this is indeed not the case. The company admits that it was wrong in using the words "full HD", and its press release has now been amended. I don't believe Motorola was trying to mislead anyone. What is concerning is that this market-leading technology provider can use terms which can be so easily misinterpreted, and is apparently unaware of the confusion that surrounds HDTV marketing. Motorola’s service provider partners will not find it easy to upsell their subscribers to HDTV services unless they and their technology partners can show consistency in communicating exactly what it is television viewers are supposed to be getting from HDTV. Visit us at IBC: Web TV and Virtual Worlds Analyst Presentations