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1990: New World Order

8/28/2006 02:00:00 AM Eastern

As the 1990s dawned, the world was catching its breath.

The sudden and stunning fall of the Eastern Bloc in the winter of 1989 literally changed the world overnight, and the first TWICE editorial of the new decade painted a picture of optimism endemic to the world's mood at that moment. It anticipated a new era of consumer confidence spurred on by “the elimination of the cloud of nuclear confrontation” and the coming “peace dividend” predicted by many the era's economists — a payback to the general economy from an ensuing cutback in military spending.

I was also catching my breath; having graduated from college the previous year, I had taken the plunge and moved to New York City in pursuit of my first big-time journalism job. Judging from the initial number of rejections I received, the peace dividend had not quite caught up to the New York publishing market.

But the CE market was a bit stronger. With CEMA projecting total industry sales of $33.4 billion and a small but healthy 4 percent growth rate, talk of tomorrow's technologies dominated the pages of TWICE.

Zenith was among a group of six companies that won $1 million contracts from the U.S. government's Defense Advanced Research Projects Agency to work on high-definition TV for the Defense Department. And Philips announced that it had joined a consortium with Thomson, along with NBC and Sarnoff Labs, to develop standard widescreen high-definition TV in the United States, “which could be available by 1993.” A prescient TWICE editorial titled “Still 10 Years Off” dismissed that timetable, but went on to predict that the experimental screen technologies of deformable mirrors, active matrix LCD and “giant plasma displays of 60 inches with a targeted production cost of $1,000,” were workable and inevitable.

Convergence hadn't reached buzzword status yet but a TWICE roundtable of retail executives predicted that “the home theater concept — the marriage of audio and video — could shake the cobwebs from cash registers.” RadioShack, the No. 1 CE retailer in the country at the time with $3 billion in sales, did its part to fuel the revolution by rolling out a $500 laser-disc player to all its stores. And CableLabs formed a group to develop a technology that would allow multiple pay-per-view films on a single cable channel.

The home computer revolution was in full swing with RadioShack parent Tandy going head to head with IBM for supremacy in the market for desktop models, some equipped with new CD-ROM drives. Apple weighed in with a $999 Macintosh model.

The seeds of the nascent mobile computing market were beginning to sprout as mass-market notebook models began to appear.

The concept of the home office was driving a large segment of the industry. Plain-paper fax machines — at $600 — hit the mass market as one manufacturing executive predicted in the TWICE Fax Machine Roundtable.

Of course, not all the news was good. The ubiquitous format furor of the day was being waged in the area of digital audio tape (DAT) recording, with the usual combatants — the CE industry, the record companies and a host of legislators and lobbyists — battling over copy protection in the first generation of commercially available digital recording devices. As a format, DAT suffered greatly from the years-long trench wars and waves of court battles, and eventually found itself buried in the consumer graveyard.

There was much talk in the pages of TWICE of consolidation, bankruptcies and the shocking revelation that “brand loyalty is taking a backseat to price.” And trade deficits were big news, as TWICE ran regular stories on the reports of Japanese and U.S. export levels produced by the countries' finance ministries.

But more than anything in 1990, the VCR still ruled the day. The last killer app of the '80s carried the retail industry into the '90s. Prerecorded video tapes were big business and the movie rental landscape was being sown as Blockbuster continued to buy up smaller, successful regional chains like Applause Video and Video Express.

The real promise of the '90s though glimmered in a short story in TWICE's 1990 Winter CES post-show issue. On the horizon was a budding technology that the industry dubbed videotex. The technology “which allow[s] consumers to talk to each other and get access to unlimited amounts of info and special services through keyboards has been promised as just around the corner,” from companies such as CompuServe, Dow Jones News, Genie, Prodigy, Quantum and Delphi. “As a shopping system, videotex allows customers to compare products and order merchandise from dealers anywhere in the country.”

As TWICE editor in chief Steve Smith likes to say, “You measure CE years like dog years. One year in this industry is like seven years in most others.” Looking back at it now, 1990 seems to prove those words true.