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8/08/2011 12:01:00 AM Eastern
NEW YORK — TV or PC? That’s basically what it came down to when we asked you, our readers, to name the most significant development in the CE industry since TWICE was born in 1986.

Your answer? Both. More than half of you, 62 percent, ranked high-speed Internet access to the home as the most significant development in the industry in 25 years. And since you could pick up to three, 59 percent of you also said HDTV and the digital TV transition was most important.

Those two developments were the only two named on more than half the surveys we received when we held our online poll in June. But maybe that’s our fault. Another choice down the list — PCs become a massmarket product — garnered 33 percent, and it appears this may have split the PC vote into two categories, a chicken and egg dilemma for the readers. Without the rise of home PCs, broadband service wouldn’t have cracked the list, nor been necessary.

But the results of the survey, as well as the comments from many of the industry leaders in the surrounding pages of this issue of TWICE, make it clear: the Internet changed everything.

That theme is reflected in another development that earned significant votes. Thirty-four percent of you cited the effect of onlineonly retailers on the brickand- mortar business.

This would be a good time to point out that the majority of those of you kind enough to answer our survey identified yourselves as retailers (46 percent), and an additional 10 percent as distributors: the people who move the products. (See p. 8 for a breakdown of respondents.) So it’s not a stretch to say that the combined developments of the rise of the home PC, home broadband and online retailing was the seismic shift of the last 25 years.

In essence, you sold your customers PCs for their homes, which spurred the Internet revolution, which drove up demand for broadband in the home and yielded a universe of online retailing.

And home PCs became the mother ship of myriad growth categories: MP3 players, digital cameras, routers and home-networking devices, hard drives and storage. Fueling that mother ship is high-speed Internet access in the home.

Since you are mostly retailers, clearly no less (or by the numbers, very slightly less) of a seismic shift was the digital TV transition and HDTV.

After all, when you were asked to name the most significant product category in the last 25 years, you overwhelmingly named HDTV/flat-panel TVs as No. 1.

Hundreds of millions of HDTVs have been sold and hundreds of billions of dollars in revenue have been generated (about $186 billion in the U.S. alone in 2011, predicts the Consumer Electronics Association), and the category is still in growth mode, with household penetration just topping 70 percent in the United States.

With HDTV, the CE industry did what it does best: took something that people love and made it better. TV has become more immersive, more useful and more interactive. Gaming has become more inclusive because of HDTV. Movie-watching is no longer a night out with babysitting with the proliferation of the home theater. And while 25 years ago futurists predicted the death of the TV at the hands of the home PC, here both products are, 25 years later, coexisting peacefully, even thriving.

One can only speculate that the watershed development when TWICE celebrates its 30th or 35th anniversary may be the spawn of both: the connected TV.

In third place in our survey, at 37 percent, was the emergence of Apple as a CE powerhouse.

Clearly Apple has been the best-run company in CE for years. Visionary engineering and groundbreaking industrial design coupled with a deft marketing hand took Apple from the cultish PC niche it cultivated for two decades to the mass-market CE leader it is today.

Using the iPod as its springboard, the company has redefined the music industry, dominated the smartphone category, created a whole class of third-party providers by inventing the app market, spawned a multi-billion dollar accessories industry for its hardware and set the baseline for all future tablet products.

The company has also infiltrated the custom-install and home-control market where suppliers are including iPod/iPhone/iPad interfaces into virtually every component and replacing expensive remote controls with apps.

Nowhere is Apple’s effect on the industry more evident than at the annual International CES, which the company doesn’t even feel the need to attend. And now that A/V products for the custom-install market are being reengineered with Apple in mind, it is unlikely the company will decide to attend the annual CEDIA Expo anytime soon. It will no doubt be content, however, to be the elephant in the room.

In the context of most significant development, some of the other choices on our survey seem understated. One could argue that the transition from physical media to downloaded/streamed media is as significant as any other development, but it was named by less than a third of respondents.

The increase in Far East manufacturing, led by China, was cited by 21 percent of you. I’m going to guess that all 17 percent of those surveyed who identified themselves as manufacturers included this.

Further down the list were CE retail consolidation and the rise of national retailers (12 percent), the development of DVD and Blu-ray for video (10 percent), and CE manufacturers begin selling directly to consumers (7 percent.)

One notable write-in was the rise of buying groups to enable smaller retailers to compete effectively with big-box stores. I think if we had included that as a choice, it may have garnered significant votes among our readers: a note to file away for our 30th.
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