3 To Watch In '03: Systems, Networks, And Convergence

LAS VEGAS — Suppliers will go to CES in January with plans to unveil more audio products that network together and with PCs, more products that integrate previously separate products into a single chassis, and more home-theater-in-a-box (HTiB) systems loaded with more features to counter price erosion.

At least two new audio products will feature built-in Wi-Fi IEEE 802.11b wireless networking.

With some suppliers estimating that HTiB systems outsold standalone receivers in units for the first time in 2002, the home audio industry's fastest growing segment will only increase in importance to the industry's health. To help maintain the segment's health in light of price erosion that began in 2002, suppliers will add DVD changers, DVD/VCR combos, and SACD and DVD-Audio playback to more models.

Dolby Digital EX/DTS ES 6.1-channel decoding will also appear in a slightly expanded selection of HTiBs, and at least one manufacturer will offer its first such system.

Increasingly, HTiBs will converge once-separate products, with some suppliers expanding their selection of systems equipped with single-chassis DVD-receivers.

Also following the convergence trend, suppliers will also unveil a slightly broader selection of "universal" SACD/DVD-Audio/Video players, with at least two more companies entering the market. One company plans to take convergence a step farther with a multichannel audio receiver that incorporates DVD-Audio/Video player, ATSC analog and high-definition TV tuner, and digital-cable tuner.

Also at the show, several audio suppliers will expand their selection of receivers with Dolby Digital EX/DTS ES 6.1-channel decoders, with at least one model priced down to a suggested $320.

In other developments:

• More universal disc players are due. At least two more companies will introduce their first "universal" SACD/DVD-Audio/Video players, joining recent introductions from Apex, Integra, Marantz, Onkyo, Pioneer and Yamaha.

Universal players will also show up in a handful more home-theater-in-a-box (HTiB) systems.

Some companies expect to eventually offer only dual-format multichannel audio players, but other companies will continue at CES to maintain their fidelity to one format or the other. To that end, dealers can expect more HTiBs with SACD/DVD-Video players and more with DVD-A/V players.

In the meantime, some suppliers' lines will continue to be peppered with an odd mix of universal players and single-format players. At CES, one company will have a DVD-A/V player, a step-up SACD/ DVD-Video player, and a universal player at the top of the line.

• Internet portables will gain new capabilities and more memory. At the show, at least three companies will launch their first 256MB flash-memory models, at least one will launch its first hard-drive (HD) portable, and other suppliers will expand the industry's selection of 128MB flash-memory portables and personal MP3-CD portables. More of these devices will play multiple compressed codecs, not just MP3.

More will support Windows Media Audio and WMA's digital-rights-management (DRM) technology, enabling them to play authorized music files downloaded from the Sony/Universal-owned Pressplay site. Dealers will also find more Internet portables that do more than just play music. They'll take digital pictures, record digital video, and even record off a TV.