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 THE STAT 26Percentage of wireless customers who use their cell phones to take picturesMore Vitals
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DECEMBER 7, 2004
Consumer Electronics: Tech's Hit Machine [Page 2 of 2] KITCHEN GIZMO. Nonetheless, the low-cost threat isn't stopping new entrants -- and it's not just tech outfits that have caught electronics fever. LeapFrog (LF ), which produces educational toys, is increasingly turning its playthings into minicomputers. In June, it announced a new product, called the Personal Learning Tool, which costs less than $100 and can be used to upload and download information from a school network so teachers can do things like follow individual students' progress with homework. Appliance makers are also jumping into the fray. In March, Salton (SFP ), known for its George Foreman grills, began selling a, Web-enabled entertainment center for the kitchen called iCEBOX CounterTop. The $1,800 system includes e-mail and Net access, Web-enabled TV, a DVD and CD player, video home-monitoring, an adjustable touch-screen LCD monitor -- and even a washable keyboard. Beyond that, the Salton subsidiary that created the high-tech kitchen gadget has also recently come out with a special microwave that can be wirelessly connected to a home network to upload product bar codes, so the appliance can automatically figure out how long to heat an item. NETWORKED SURGE. Will all these outfits succeed? Hardly. The electronics market has been notoriously difficult to crack. A survey of 1,206 consumers conducted by researcher IDC two months ago found that shoppers for digital TVs still overwhelmingly pick established electronics brands like Sony over those of newcomer PC makers. That said, the battle for electronics dominance is just beginning. Consumers are just getting comfortable transferring songs from their PCs onto their portable music players. Broadband adoption still has a ways to go. Industry standards, allowing devices from different manufacturers to work together, are still being developed. As they're put into place, "the number of networked products should increase dramatically over the next 12 months," predicts Louis Burns, vice-president and general manager for desktop platforms at chipmaker Intel (INTC ), which has been shepherding much of the standards work. VIEW OF THE FIELD. "The door [to the electronics market] is wide open," says Stephen Baker, an analyst with NPD Group. "You're staring at a huge wave of opportunity." And with everybody wanting a piece of this pie, expect pressure to cut prices -- and consolidate -- to continue. In this special report, BusinessWeek Online takes a look at the outfits breaking into consumer electronics and their tactics for grabbing some of the lucrative action. From the secrets of Apple's success to Microsoft's (MSFT ) big plans for digital entertainment, businesses are going out on a limb for electronics gold.
 By Olga Kharif in Portland, Ore. Edited by Jim Kerstetter
BW MALL
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