Present, Future and Past
By Steve Smith -- TWICE, 11/8/2004
When you have a job like mine, you are in a unique position to observe the present, future and past, often at the same time, sometimes in the same place. What do I mean? Well, I've traveled a lot lately, to Japan for the CEATEC show and to San Francisco for the CEA Fall Forum. I talked to a lot of people and I heard a lot of stories, especially theories about current and future market conditions and technologies. Here is some of what I heard.
If there was any doubt, home networking, or the “digital home,” as it was called during a seminar at the CEA Fall Forum, will be the growth engine of the industry for the next 10 years. During that seminar (TWICE, Oct. 25, p. 12), executives from Dell, Samsung, SBC Communications and Sony mostly agreed that consumers may not understand all the nuances, such as the differences between 801.11a/g vs. 802.11b/g/a, and they shouldn't have to. (Those home networking names just roll off the tongue, don't they?)
The keys to success will be making the technology simple enough for consumers to understand; having open standards; and providing flexibility to access content and data in a wireless or wired manner at home, at work and on the go, while providing content protection.
In other words they are describing a “ubiquitous” network, the theme of the CEATEC show and the subject of the keynote speech by Matsushita's president Kirk Nakamura.
To get there, broadband access will have to increase dramatically, with audio/video being the first application everyone will want. IT, major appliance controls, home security and health monitoring applications will follow suit, along with other uses no one has thought of yet.
While the industry works towards that future, who will produce and sell the products from now until the networked home becomes a reality?
That's a concern I've heard more than once this year. Richard Glikes, executive director of the Home Theater Specialists of America (HTSA), was the latest to mention it when I spoke with him at the CEA Forum. (See p. 25.) He spoke of a “brand rotation” in the near future with “revered brands being replaced by new ones that will take top spots.”
Manufacturers that intend to compete in the CE industry will have to be diversified in their technologies to get to the “digital home” everyone is talking about, and become more savvy in their marketing.
And retailers, well, they know they have to change and stay ahead of the game. All they have to look at is Best Buy's “Consumer Centricity” effort and its move to put upscale Magnolia Hi-Fi departments in every store. And it isn't just Best Buy. As Alan Wolf's story on mass retailers shows (see p. 1), Wal-Mart, Kmart, Target and even warehouse clubs like Costco are not content to play in the commodity area anymore. They are going upscale in their assortments, as consumers use the Web to educate themselves about new products.
Is this a challenging time for anyone in this business? Yes. Is it unprecedented? Well, no. Take a look at p. 48 for coverage of the Consumer Electronics Hall of Fame dinner at the CEA Forum. You know many of the names and faces. The challenges they faced are the same that face the industry today: constant, unrelenting change.
It can drive anyone trying to make a living in this industry nuts, but it is one of the strengths of this business.
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