San Antonio — The Progressive Retailers Organization was at the Westin La Cantera Hill Coun
TWICE: For MP3 players, what features are growing in demand?
Duea: We collaborate very closely with stand-alone MP3 player manufacturers as well as music-enabled cellphone manufacturers. Due to consumer traction on the MP3 player front, and due both to consumer demand and carrier requirements on the music-enabled cellphone front, we are seeing a dramatic growth in the number of devices that support portable subscription content from services, like Napster To Go, and over-the-air download services, like Napster Mobile.
While some are trying to further fragment the consumer music service and device landscape with proprietary services, Napster has instead tried to adopt technologies, like Windows Media DRM 10, that are embraced by a long list of carriers and device manufacturers. That allows us to partner with a wide array of device manufacturers to provide the best choice to consumers.
Longer term, growth in shipments of music-enabled cellphones that are compatible with Napster To Go and Napster Mobile will allow consumers to get music any way and anywhere they want it and, in the process, will also drive the deployment of some great features that will become even more popular.
Those features include (1) deployment of Bluetooth 2.0 for wireless playback of music on stereo headsets and through car stereo systems, (2) direct, high-speed connectivity of devices so that you can download music directly to the device and also legally share content with friends, and (3) GPS and location-based features enabling you to learn about live music events in the area or even meet new friends based on songs you have in common with someone nearby.
In addition, there are (4) external memory slots so you can upgrade the memory capacity of your device, (5) increased battery life and (6) identification and "bookmarking" or "tagging" features. These enable you to identify a song you like from satellite radio or anywhere else and bookmark or tag it so you can add it to your collection by either immediately downloading over the air or when you connect with your PC,
We will also see a growing number of music-related accessories for your music-enabled cellphone, including external speakers (some with integrated chargers), Bluetooth 2.0 stereo headsets, Bluetooth 2.0 and other types of home and car stereo adapters, a wide range of extremely portable, fast and flexible phone and battery recharging accessories, as well as backup batteries.
Sakuma: MP3 players can do more now than ever before. Common features, in addition to music playback, are photo and video viewing. For RCA, our next step is to "cut the cord" and give the consumer the freedom of a no-wires solution between the player and the headphones. Consumers in the affordable price points also seem to favor the freedom of not being tied to a specific service — or of choosing the service they wish to use. Flexibility and freedom are important.
Sure, there will be people offering Wi-Fi and other wireless solutions between the MP3 player and a bigger audio system. But the biggest consumer gripe is still the wires between the MP3 player and the headphones.
TWICE: For PMPs, what features are growing in demand?
Eisen: For us, the key features for 2007 include Wi-Fi connectivity directly from the device to CinemaNow so that the user is not tied to the PC. Also, being able to connect the PMP to the TV and control it with a remote control.
Duea: As we are seeing with the shift to the music-enabled cellphone as the primary music playback device for consumers, I expect the big wave of growth for PMPs to come on the mobile phone. Video- and music-enabled cellphones that are compatible with Napster To Go and Napster Mobile will allow consumers to get unlimited access to music and music videos any way and anywhere they want it. That revolution will force other PMPs to have direct broadband connectivity of some type so consumers can directly access movies, television shows and more.
This video phenomenon will drive the need for rich screens and external memory slots so consumers can upgrade the memory capacity of their devices — possibly even using MicroSD cards like they currently use DVDs. Battery life will continue to improve, along with settings to extend playback and talk time.
Smith: First, ultra-slim designs, large capacity, large screens and screen quality are the winning features for consumers. Every year, you'll see devices that were slimmer than last year, but the hard drives and screen quality are even more impressive. Additionally, features such as TV recording and Wi-Fi, which we've offered for years, are starting to pique the attention of the broader consumer set. No more are we just appealing to early adopters.
As content adoption spiked this year, and continues into 2007, content format and open standards are critical. And content is critical to player adoption. Archos is content-agnostic. We don't feel it's our responsibility to determine where consumers get their content — whether it's from this store or that Web site. Consumers buy our products to play their media, all their media. We offer them that option. Unless, of course, the content store itself doesn't allow them to play it on competitive players. We support consumer preference, all standard content formats, and an open approach to content enjoyment.
Every single analyst we've spoken with believes that content options are the critical driver of consumer adoption of PMPs. Yet, we live in an age where companies are still introducing closed systems with one-store-one-device models. It's a step backward, and we believe consumers will catch on and opt for flexible stores and players.
TWICE: How did the unit/dollar mix of flash-memory MP3 players vs. HDD MP3 players change in 2006, and what are the prospects for 2007?
Sakuma: Large-capacity flash is moving into the 2GB, 4GB and 6GB categories, displacing hard disk drives that are now common for 20GB to 60GB players. We expect this trend to continue and for large-capacity flash memory to become more affordable. This trend affects the products we've offered. We've gone from having four RCA hard disk models in 2005 to none planned for 2007. In place of the microdrive is high-capacity flash.
TWICE: Will flash-based PMPs become a significant sales factor in 2007 or beyond?
Smith: Two words: flash and high def. Okay, that's three words. Bottom line is they don't go together. Sure, flash drives can hold a few movies today, but it's limited in capacity, and capacity is what you need for a true PMP. Just as consumers are accustomed to carrying their entire music collection — thousands of songs — on their media player, they'll expect the same with video. And not just DVD-quality video — they'll expect their HD content to live on the device as well.
In five years we'll look back and wonder how we ever watched a movie not in DVD quality. You don't want a device that holds two, even 10 movies. It should — and can — hold hundreds of hours of video today and be expected to hold hundreds of HD movies in the future. That just doesn't work with flash-based players.