We met with Boxee which was demonstrating its first set-top box, developed by D-Link and based on Nvidia’s Tegra 2 chip. This is a powerful platform allowing full HD capability. The box will not include an integrated HDD in order to keep the price below $200, but supports USB drive attachments. It will ship in 1H10 in the US and Canada. Boxee let slip to us that they also expect it to be available “shortly after” in Europe. Boxee currently has 750,000 users through its PC-based platform. This device is certain to give a boost to those numbers and looks like a compelling new entry into the connected TV market. Meanwhile, Yahoo continues to make progress with its connected TV offer. In spite of our scepticism over the widget strategy, based on our own user research, Yahoo expects to have shipped between 3 and 5 million TVs globally by the end of Q110. 60% of sales have been in Europe and the remainder in the US. The company’s target is to have shipped in between 10 and 12 million devices by 2011. Like other connected TV companies their goal is to develop a large scale platform from which monetisation of app stores, advertising and other opportunities can be realised. As things stand today Yahoo appears to be fairly well positioned, but it will come under threat from many alternatives over the next few months, and TV manufacturers will be wary of becoming too dependent on a single partner. One competitor could be Sonic Solutions’ Roxio/CinemaNow platform, which is being repositioned as a white label service for retailers and device manufacturers. Indeed, as we were meeting Sonic was in discussion with one of the major US retailers. It makes sense that retailers would be interested in selling connected TV services in addition to the devices on which they make small margins. We can expect to see a great deal of activity in this space in the US and Europe over the coming year as the connected TV landgrab continues. Client Reading: Consumer Imperatives for Digital TV Media Browsers

LG kicked us off this morning with a bullish presentation after announcing 16% US revenue growth in 2008. A variety of new technologies were confirmed, including 60GHz WirelessHD connectivity, 3D processing chips that will be ready for future 3D formats, TruMotion 240Hz (which combines 120Hz with backlight switching to create a 240Hz effect), LED backlighting (which gives a 2,000,000:1 contrast ratio), and 25mm thin LCD TVs. The hot LG story is around its deals with internet content providers. Netflix, Youtube, Yahoo and other providers will appear as menu options on a range of connected devices, including TVs. LG also introduced an 802.11n BD player, one of the few integrated wireless enabled BD players on the market. Netgear also gave a strong performance, centered around its ITV2000 internet TV player, launching in summer 2009 at $199. This is a compact, pocket-sized set-top box which will give access to web content, including the inevitable Youtube, without the need for PC connectivity. Netgear also introduced its Digital Entertainer Elite, priced at $399 and available in February. This device incorporates a 500GB HDD and plays HD video at “up to Blu-ray quality”. I suppose that means something close to Blu-ray if the wind is blowing in the right direction. Toshiba, rather strangely, began their press conference by highlighting their leadership in “TV combos”, ie combined TV/DVD players. Not exactly technology innovation, but I suppose they had to find a market leadership story to start with. The new stuff focused on the introduction of internet widgets in TVs and other devices from the likes of Intel, Yahoo and Microsoft. Toshiba highlighted a number of content service providers on their presentation material, including Myspace, CinemaNow, Yahoo and CBS, but the fine print indicated that these names were shown “for demonstration purposes only”, suggesting that partnership deals are still at the negotiation stage. Toshiba’s approach to internet content is based on Microsoft platforms such as the Media Center PC, which is not surprising given its stronghold in the PC market. In the TV space, Toshiba announced the introduction of Dolby Volume, which balances volume levels across different TV channels so that viewers don’t have to keep adjusting volume levels. Dolby told me the technology has been a success in Japan for the past year and is now making its way to the US and Europe. Toshiba also indicated that the long-awaited Cell TV is on the horizon. Using the Cell processor at the heart of the PS3, this will be launched in 2009. Cell TV could allow 6 simultaneous HD streams to be recorded, support the next generation of 4k x 2k panels and allow for 3D graphical interfaces. Client Reading: IFA 2008: Internet and 3D Offer Hope During Europe's CE Recession

Over the last few years there have been numerous IPTV conferences and events springing up all over the place, but the IPTV World Forum appears to have become the most important in Europe, and attracts visitors from all over the world. The exhibition features stands from major and smaller vendors alike - enough to more or less fill two floors of London's ancient Olympia venue, and many familiar faces were seen wandering the aisles. I hope the organisers manage to find an alternative venue for next year - visiting Olympia is a bit like emerging from Doctor Who's Tardis some time in the 1950s, and the local hotels are not much better... A few highlights worth mentioning: Vividas is giving an impressive demonstration of HD video streaming over the Internet, showing a 720p clip of Paramount's upcoming Transformers movie streamed at 1.2 Mbps. Vividas' solution involves analysing the user's PC and sending only the player elements necessary to support that particular device. In this way it reduces the payload to a fraction of the typical media player, and claims also to increase content security because there is no trace of the media file on the user's PC. Visiware, the French gaming company, is demonstrating its own solution to multi-platform gaming, so that a subscriber can access the same game on digital TV, broadband and a mobile phone, and even resume playing from the same point of the game on a different device. Visiware began life in the interactive TV space more than 10 years ago, and is one of the few survivors from that era with a global presence. Nortel's deal with NDS made most of the headlines, and Nortel is demoing the usual types of voice/TV application such IM, caller ID and video telephony on the TV screen. It's good to see Nortel positioning itself for these potential IPTV applications, but I can't help thinking it is somewhat late to the party - most of these ideas have been around if not on offer from competing vendors for some years. Industria is an Icelandic company with a focus on IPTV middleware and solutions. It has significant deals with Irish and Bulgarian operators and is planning further expansion as well as partnerships. I expect to see one or more major telco vendors bidding to work with Industria over the coming months. Oregan has built its business with Sony's PlayStation but is now branching out into CE retail through partnerships with Philips, Nokia, Samsung and others. It has high hopes for connected device solutions using its Media Browser software. It is demonstrating accessing CinemaNow and the BBC's video clips on a TV screen. They have had most success so far in Japan, but we expect to see significant movement in European and US markets over the next year or so. Finally we were treated to a demonstration of Ruckus Wireless' WiFi solution. Ruckus has created a stir with its unique antenna technology that guarantees quality of service for video streaming, including HD, over home wireless networks. It has significant deals with PCCW and Belgacom (Strategy Analytics clients will receive a report on Ruckus shortly).