Digital Consumer

• 10Mar

  Cisco’s Wireless HD Investment Hides Behind “New Internet” Hype

  Connected TV, HD and 3DTV, Wireless No Comments

  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

  

• 05Mar

  Sony’s PS3 to Win Current Games Console Battle; SA Forecasts 47.5 Million Global Console Market in 2010

  Games 27 Comments

  As promised, a quick preview of our games console forecast which will be published early next week. No surprise that Nintendo’s Wii stands in the lead at the moment, within the current generation of systems, in terms of global installed base. We estimate that there will be nearly 76 million Wiis in use worldwide by the end of 2010.

  But the signs are that the Wii has peaked in terms of console sales, and its installed base will begin to decline after 2011. Meanwhile, Sony’s PS3 and Microsoft’s Xbox 360 will continue to grow, so that the PS3 will become the largest platform globally by 2013. In terms of cumulative lifetime sales we expect the PS3 to hit 127 million units, compared to 103 million Wiis.

  These estimates are derived from our core forecast scenario, but we have developed various scenarios for each platform. Uncertainties clearly surround each of the major platforms, particularly relating to the new services and upgrades planned by Sony and Microsoft. Natal on the Xbox could be more beneficial to 360 sales than expected, and Sony’s own motion controller, together with its plans to upgrade all PS3s to 3D capabilitiy, also represent potential for upside to our core forecasts.

  This year’s global market for consoles is likely to fall again, after a 6% decline last year. For 2010 we are predicting global console sales of 47.5 million, a 9% decline.The Wii will account for most of that decline: sales of the PS3 and Xbox 360 are predicted to increase.

  David Mercer

  Client Reading: Global Video Game Market Forecast

  

• 02Mar

  Sky’s new HDTV offer aims to restrict customer churn, but at what cost?

  Broadcasting, HD and 3DTV 1 Comment

  As a long term Sky TV customer I’ve often been frustrated at the lack of attention the company gives to its loyal customers relative to its interest in winning new ones. While I understand the business goal – winning new customers is always much more expensive than retaining existing ones – as a customer it can leave a sour taste in the mouth.

  That taste was sweetened this morning by an unexpected call from Sky customer services offering me a new HD DVR, together with 12 months’ subscription to HD channels, all at no additional cost. No set-top box charge, no “set-up fee”, no installation charge, no further commitment. The normal fee for an existing Sky customer to upgrade to this package, as still described today on the company’s website, is £180 - £60 set-up cost plus 12 months of HD channels at £10/month. From £180 to zero – that’s what I call a discount.

  I couldn’t let the fact that I don’t yet have an HDTV, or my general rule to reject all cold calls, prevent me from accepting this offer. Sky’s latest HD DVR should represent a vast improvement over my 9-year-old Sky+ model, in speed and ease of use, interface and EPG, and storage capacity. I won’t get the benefit of the HD channels, but maybe, just maybe, those free channels will be enough of an incentive for me finally to replace my CRT TV.

  Sky’s initial financial loss on this, and presumably many other HD upgrades, results from their determination to remain competitive in the years to come. The resistance of many of their customers to subscription fees is high, as shown by our own user research. We found that, while Sky’s overall satisfaction ratings are high, more than a quarter of Sky’s customers would switch to another provider offering the same service for 10% lower monthly fees. We also found that more than a third of Sky’s customers do not rate the company as meeting expectations on value for money.

  With this new offer, although it is limited to selected existing customers, is aimed at the right spot: to make sure its subscribers are not lured away by competitors such as Freeview HD, Freesat HD, Virgin Media and BT Vision. While none of these alternative providers offer the exact same package as Sky, they are each, in their own way, becoming more competitive in certain aspects. Slowly but surely it seems as though the UK pay and multichannel TV sector is finally opening up to greater levels of competition. Whether Sky’s financials can withstand the impact of these customer retention strategies remains to be seen.

  David Mercer

  Client Reading: BSkyB Results Shine But Warning Signs Evident In Customer Value Ratings

  

• 15Feb

  As 3D TV Approaches Commercial Launch, Will Consumers Be Misled By Standards Conflicts?

  Games, HD and 3DTV No Comments

  The rapid re-emergence of 3D in the television and video industries is beginning to reach “real” consumers. I was tempted into the Sony Style store in Boston’s Copley Mall recently by a window poster offering the chance to “see 3D in action”. After circling the store with no sign of said “3D in action”, a sales consultant pointed me, with slight embarrassment, to a PS3 connected to an LCD TV. “This should be showing 3D, but we were sent the wrong box.” Further inquiry revealed that “Singapore”, whatever might be there, had shipped a faulty hard disk drive for installation in the PS3, and the store was awaiting a new module, presumably along with the sort of firmware upgrade to be offered to all PS3 owners later this year to enable 3D Blu-ray playback.

  Personally I have seen enough 3D demos to last a lifetime, so this disappointment represented no great loss. But Sony will clearly have to avoid such problems for US-based customers interested in 3D Blu-ray players and TVs once they are offered for sale. Effective in-store technology demonstrations have always been one of the major obstacles to commercial success, and 3D will be no different. Minor issues such as these will be overcome as the technology matures, but they will be replaced by other practical questions such as how 3D glasses are stored, demonstrated and secured.

  Retailers will have other headaches too, as an excellent article in specialist trade publication, CE Daily, revealed last week. The incompatibility of passive (side-by-side) and active (eg Blu-ray) 3D systems is one of the major faultlines in the realm of 3D standards. The Blu-ray 3D standard specifies only the active approach, which is generally accepted to offer the best quality available today, and will be compatible with TVs with active displays and the transmitter necessary to communicate with active shutter 3D glasses.

  Panasonic recently became one of the first major companies to announce sales of new, active 3D TVs. It will sell 50” and 54” plasma sets in Japan, starting at around $4800. One pair of glasses will be included in the bundle; additional pairs will retail at around $112 each.

  But, as CE Daily’s Barry Fox reports, it seems, as long suspected, that some TVs will be launched which will only support passive 3D technologies, from vendors such as Hyundai and JVC. These TVs, which are likely to cost considerably less than the first active 3D sets, will be suitable for broadcast 3D services from Sky, which are only using the passive approach. But they will apparently not be compatible with 3D Blu-ray players (including the PS3), at least not without some modification or add-on transmitter device. They will also apparently not incorporate the latest HDMI 1.4 ports required for 3D Blu-ray and other potential active 3D systems.

  We wrote nearly a year ago that BSkyB, which had just announced its intention to launch a 3D service, was unconcerned by 3D standards issues. But that narrow perspective ignored the dilemma which now apparently faces retailers anxious to push sales of new 3D devices and software. Sky’s 3D customers will need new TV sets; but will retailers tell them (will they even know) that some of those TVs may not play 3D from Blu-ray discs? Buyer, as always, beware.

  Client Reading: Consumer Imperatives for Digital TV Media Browsers

  

• 04Feb

  Sony Upbeat As PS3 closes in on Xbox

  Games 1 Comment

  We met with Sony Playstation’s senior European executives today for a performance update and to hear plans for 2010 and beyond. After what the company described as a challenging 2009 the PS3 nevertheless appears to be in a strong position as we enter 2010. I can’t release any detailed European market data yet, but we will be publishing our own estimates and forecast for console sales very shortly.

  But the general global outlook for the current generation of home consoles appears to be clear. In terms of annual sales volumes Nintendo’s Wii is entering a period of decline, although its global performance in 2009 held up well. The Xbox 360 has peaked in terms of annual sales, while sales of the PS3 are still on an upward trajectory. So while the PS3 still ranks third globally in terms of installed base, this situation may not last much longer.

  Much depends on assumptions about the longevity of these platforms. As we have always argued, the PS3 was designed with longest term vision in mind, and that is now being demonstrated by global sales patterns. However the uncertainty surrounds the impact of system upgrades such as Natal and Sony’s motion controller. These are likely to give renewed impetus to both platforms.

  We’ll release our conclusions together with market data projections in the next week or so.

  Client Reading: Consumer Imperatives for Digital TV Media Browsers

  

• 28Jan

  Apple underwhelms after tablet hype-fest: iPad needs to become more than a “big iPhone”

  Vendors, Connected TV, Digital media, Wireless No Comments

  Apple cynics seem to have taken the initiative following the announcement of Apple’s iPad internet tablet. I tend to shy away from anything as hyped as this product has been. Surely the most hyped Apple device ever… And for that reason alone I am feeling underwhelmed. Is the iPad really what this was all building up to?

  Let’s think about the applications:

  Books - ok, I get this. if you want e-books this seems like a reasonable way to carry and read them. A nice way to read newspapers as well – I’m not sure the publishers will make money from it though.

  Web browsing and applications - I suppose the brower must work well. This is definitely the primary set of apps in my view. Consumers need an easy and fast way to get to websites quickly when they’re at home and don’t want to boot up the laptop.

  Music - ok, but who would rather listen to their music through a 1.5 pound portable device with (presumably) tinny speakers rather than either a) a small iPhone/Pod plus headphones, or b) plus docking device?

  Photos - yes of course – iPad could be a very nice digital photo frame.

  Games - could eventually become a killer app but control and input functions will need to be adapted to a larger screen device and iPhone app developers need to get to work to match the screen’s HD resolution.

  Productivity applications - I’m struggling here. is this really how the iPad is going to get used? The virtual keyboard may be good, although early reports are not promising. But think about how are people going to hold or rest this device: sitting down in a chair - it would have to rest on the flat table, so you are leaning over it to use it properly. Sitting in an armchair - so it’s on your lap, but again you have trouble positioning the screen at the right angle; or standing, so you hold it resting in one arm and only have one arm free to touch the screen. Or you use a stand and add-on keyboard, and it becomes… a laptop! OK, maybe the iPad could be used occasionally for productivity applications, but I just don’t see this device as a breakthrough for work-based devices.

  and finally… Video.
  Video playback is reported as stunning - I can believe this. But where are the extra video content applications or TV deals? The specialised video apps like TV-transfer? No HDMI for TV connection? Apple seems to be struggling more than ever to break into the home video market in a big way.

  And no multi-tasking… this is crazy. I can’t play music while I surf?!

  Form factor: maybe I was expecting too much from Apple, but really the iPad is hardly a revelation. Have they done what we expected? ie take all previous tablet-type implementations, improved on them and added innovative style and usability and content integration to create a unique package? I don’t see this from what I’ve read and seen. And it’s too heavy to be held in one hand, much heavier than some e-readers.

  Wireless:
  So the key question - how often would this device be used in truly mobile situations, and of those situations, how often would a user need to have cellular data service? The cellular service can be bought ad hoc - and I think it will be primarily. Not much new recurring revenue for carriers there then…

  The iPad is surely primarily a “free data” wifi device. It doesn’t need always-on connectivity for messages and voice - I’m always going to carry a phone for those. I can get online for websites and apps via hotspots when needed, and primarily use my home broadband to load it up with content.

  Having said all this, of course the lower than expected price points mean they will sell millions to Apple fans who won’t blink at spending another $500 on the latest Jobs gizmo.

  (And did anyone at Apple really not investigate the unfortunate connotations of the device name for the female market? - one wonders if Jobs has really lost his touch.)

  Client Reading: Consumer Imperatives for Digital TV Media Browsers

  

• 11Jan

  CES 2010: Two Cool Gadgets from Sony and Plastic Logic

  Technology, Connected TV, Digital media No Comments

  Sony has introduced what it calls a new device category at CES 2010: the “Personal Internet Viewer”. This takes the form of Dash, a small, 7” touch screen internet access device with WiFi access to the home network. It will launch in April 2010 and retail at $199. Dash is based on Flash technology, so, “for Flash, get Dash”.

  Dash is based on Chumby’s internet service. It currently features more than 1000 internet services and applications across social networking, news, music and video, and can access video from Sony’s Bravia internet video platform. It can run multiple applications simultaneously. One drawback is that it is only mains-powered, so in-home portability is out of the question. Nevertheless we felt this was a very nice implementation of a simple to use, and relatively inexpensive internet access device. At $199 it could well become a favourite for kitchens and bedrooms.

  We were also impressed with the progress made by Plastic Logic, a company originating from the well-known hub for advanced display technologies – Cambridge in the UK. PL was showing off its QUE ProReader e-reader. At $649 the product is aimed very much at the professional needing to access multiple documents on the move, such as newspapers, books, newsletters and reports. Barnes and Noble is behind the QUE bookstore, and connectivity is via WiFi and AT&T’s 3G network. The device is extremely thin, light and easy to read, and battery life is supposedly several days in normal use. If volume sales lead to cost efficiencies and price declines this technology could find its way into the mass market. In the meantime the company is looking towards adding colour and eventually video capabilities.

  Client Reading: Consumer Imperatives for Digital TV Media Browsers

  

• 09Jan

  CES 2010: Connected TV Land Grab Continues – Updates from Boxee, Yahoo and Sonic

  Connected TV, Digital media No Comments

  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

  

• 06Jan

  Toshiba at CES: Blu-ray Is Launched, But Don’t Blink or You’ll Miss It

  Connected TV, HD and 3DTV No Comments

  Toshiba’s press conference focused almost exclusively on the launch of Cell TV in the US market. We have followed the progress of Cell technology for nearly the past decade, since Toshiba, Sony and IBM began its development. As a reminder, it lies at the heart of the PlayStation 3 system, and Toshiba has always made its intentions clear to launch a range of other consumer devices using the processor technology.

  Cell TV will use Cell for various capabilities: to deliver 3D pictures from 2D sources; to upscale video, including video from internet sources; and to support “Autoview”, which sets the TV picture automatically and adjusts for the room’s colour temperature. I did not get the chance to examine the performance of Cell in these tasks – I hope to see detailed demonstrations later this week.

  Cell TV will be Toshiba’s flagship model this year. It will also feature a range of connected TV features, including wireless HD (the WirelessHD standard), 802.11n, DLNA, USB movie, Net TV channels and videophone. Yes, like LG and Panasonic, Toshiba is also entering the rapidly emerging big screen videoconferencing space.

  The launch of Toshiba’s first Blu-ray player was mentioned more or less in passing, and it will be upgradeable to 3D capability. However, we question Toshiba’s commitment to BD given the company’s belief that “the future of video is online, and discs are in decline”. It seems the bitter legacy of the HD-DVD saga has not been easily forgotten.

  Client Reading: HDTV: Standards Muddle Clouds Outlook For Wireless Displays

  

• 06Jan

  LG at CES: Connected TV Plans Put 3D In The Shade

  Connected TV, HD and 3DTV No Comments

  The challenges facing 3D TV were evident from its relative lack of focus at LG’s CES press conference this morning. While brief mention was made of the plans for new 3D-ready TVs to be launched in May this year, much more time was spent on a variety of broadband-enabled features which will be rolled out over the coming months.

  In particular, the headline-grabbing deal with Skype to bring video conferencing to the big screen caught the attention, and LG was confident enough in its technology to demonstrate a live Skype video call. Such demonstrations in front of the world’s technology press have a terrible habit of going wrong, but this worked, at least in terms of establishing a communications link. On the other hand, the quality of the video was extremely jerky and cut off completely once or twice. For a free service, that’s probably only to be expected, but vendors pushing specialist consumer TV video conferencing systems should take note that the price point for this basic capability is now effectively zero.

  LG has also redesigned its web TV services known as Netcast, and added various new ones including DivxTV. It claims that more than 110 “channels” are now available. It will offer Netcast on two thirds of its TV line-up in 2010, and virtually every set larger than 32”.

  Enhanced connectivity will also feature strongly, with most of LG’s new TVs being “wireless-ready”, which means they will require only a dongle for wireless HD connection to compatible devices. The company was cagey about which technology was being used, but Amimon, whose technology lies behind the WHDI 5GHz standard, issued a statement this morning claiming that “the new wireless-ready high-definition televisions and wireless HDTV accessories launched by LG Electronics are based on AMIMON’s wireless 1080p solution”.

  LG also demonstrated the inevitable “thinnest yet” TV, an LED LCD model only 6.9mm thick. I’m sure we’ll see more entries into this rather tiring pseudo-battle before next Sunday. Thin TVs are great, but there comes a point, and I think we have reached it, where another fraction of a millimeter is unlikely to make much difference to the sales line.

  And finally 3D, and LG was surprisingly circumspect in its announcements, focusing on its introducion of the first full HD single lens front projector. It said 3D capable TVs and a 3D BD player would be launched later in the year but was light on specifics. It seems a lot of work on the details still needs to be done.

  Client Reading: HDTV: Standards Muddle Clouds Outlook For Wireless Displays

  

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