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JANUARY 13, 2003 REPORTER'S NOTEBOOK By Stephen H. Wildstrom At CES, Cool Tech Still Rules This show proves that the digital revolution is alive and well in consumer electronics, where networking is becoming a central theme
The truth is, Comdex and CES were moving in opposite directions even before the tech crash. But the CES's vitality is a sign of something very important happening in the industry that goes beyond current economic conditions. The sort of information technology long showcased by Comdex isn't terribly exciting anymore. Gear continues to get cheaper and more powerful, but fundamental breakthroughs have become infrequent. And in an industry where distributors and resellers have been replaced by manufacturers selling directly to enterprise customers, trade shows have become largely irrelevant. HDTV EMERGES. At the same time, a digital revolution of epic proportions is shaking the consumer-electronics industry. Just about everything is going digital, and much of it is becoming networked. Consumer info-tech products and consumer electronics increasingly are becoming indistinguishable. One source of excitement at CES: The long anticipated high-definition TV boom finally feels real. The biggest reason is the sharp decline in the cost of HD receivers and high-resolution, big-screen monitors. The star of CES was a drop-dead gorgeous 54-inch LCD TV set -- with a five-digit price tag -- from Samsung. But it's now possible to set up a perfectly acceptable HDTV system for under $3,000. While that's not quite Wal-Mart territory yet, it's getting very much into the consumer mainstream. The other boost to HDTV is that content is finally becoming available. Until now, these systems have been used largely to play DVD movies. But with a recent standards agreement between the National Cable Television Assn. and consumer-electronics manufacturers, the way has been cleared for more HD cable channels. Disney's (DIS ) ESPN, for example, is about to start an HD sports channel. FROM PC TO STEREO. Another major trend: Home Wi-Fi wireless networking is moving beyond computers into entertainment equipment. Nearly every company in the audio field, from giants like Philips Electronics to tiny startups like CD3O, showed products that will connect your stereo system to your PC with Wi-Fi. You can use the audio gear, with its superior sound reproduction and speakers, to play music stored on a computer hard drive. Right now, the trend is limited mainly to audio, in part because current wireless networks don't have enough capacity to carry high-quality video. But that will change this year as two new standards -- somehow, it can never be just one -- aim to increase the speed of Wi-Fi networks nearly five-fold and create plenty of bandwidth for video. More stubborn problems are the legal and technical obstacles that the movie and TV studios have put in the way of distributing video over the Internet or even within your own home. Battles over just what's permissible are being fought in the courts and in Congress, but I hope that rather than relying on these slow and clumsy arms of government, the parties can reach a negotiated settlement this year that protects the rights of both copyright owners of content and consumers. "DIFFERENT MINDSET." No CES would be complete with out something truly far out. This year, it was something called Smart Personal Object Technology from Microsoft (see BW Online, 1/9/03, "Gates Has Designs on Your Wrist"). The idea of Spot is to deliver customized bits of information, from headlines and sports scores to appointment reminders, to small, inexpensive devices. In fact, the first Spot products to hit the market this fall will be almost normal-looking wristwatches from Citizen and Fossil that can switch from showing the time to displaying text. Spot is a departure for Microsoft (MSFT ) since it has hardly anything to do with Windows, although Microsoft server software is used to generate the information on the back end. "This is not about making every device into a computer," says Richard Rashid, senior vice-president and head of Microsoft Research, who oversees the Spot project. "It's a fundamentally different mindset." Spot uses a tiny radio and processor on a chip, made by National Semiconductor (NSM ), to receive data broadcast on a subcarrier channel by commercial FM radio stations. The electronics decode the data, and select and display the subset of information chosen by the device owner. National Semi CEO Brian Halla suggests incorporating Spot into a wireless phone that could be set up so that all its functions would be shut down except the Spot receiver, which would generate a message if you get an incoming call. Because Spot consumes so much less power than the phone's regular radio, handsets could run almost indefinitely in standby mode. It's way too early to tell whether Spot will be the next revolution -- or the latest in a long line of cool ideas that went nowhere because they turned out to be too expensive, too complicated, or simply didn't work well enough to fulfill their promise. But if Bill Gates has his way (see BW Online, 1/9/03, "Bill Gates on His 'Spot'"), the digital revolution may soon embrace even the plain old refrigerators displayed at CES by Korean manufacturer Daewoo.  Wildstrom is Technology & You columnist for BusinessWeek. Follow his Flash Product Reviews, only on BusinessWeek Online Edited by Douglas Harbrecht Get BusinessWeek directly on your desktop with our RSS feeds.  Add BusinessWeek news to your Web site with our headline feed. Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video. 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