Consumer Electronics Online News (c): Jan. 20, 2001
By Marjorie Costello, Editor & Publisher

THIS WEEK IN CEON:
(For CEON's CES coverage, we will be transmitting a series of editions, starting with the January 20, 2001 CEON below.)

CES 2001 Report Begins:
Technology & Attendees Flock To Show's Big Tent
* Connecting Components & Concepts
* Gates Unveils Microsoft Xbox Game Console Design
* Industry Statistics: DVD Soars, DTV Steady
* Post CES: VSB Affirmed, FCC Considers Tuner Mandate
  DTV/HDTV/TV Hardware Highlights:
* RCA Unleashes LCOS HDTV
* Sony Bows 40" Wega CRT, Shows Grand Wega LCD RPTV
* DTV Pricing News From Panasonic & Zenith
* Toshiba, Hitachi Herald HD-Level Plasmas
* DLP Update From Hitachi, Sharp, Yamaha
* HD Displays & Boxes: Philips, Samsung, Konka, Sampo
* DVI Making AV Links, JVC Shows HD D-VHS VCR
* Net Inside TV Makes Comeback: TeleCruz, Ch.1, EspriTV

TECHNOLOGY & ATTENDEES FLOCK TO CES 2001's BIG TENT

Over 122,000 attended the 2001 International CES in Las Vegas, billed as "The world's largest annual technology trade show," which featured 1.2 million net square feet of exhibit space. The recent show's 122,422 attendance slightly surpassed 2000's record of 122,244, and the final numbers are subject to an independent audit that will be released this spring. According to the show's sponsor, the Consumer Electronics Association (CEA), 2001's attendance exceeded initial projections of 110,000, which factored in relinquishing the adult video exhibits and their attendees to the Video Software Dealers Association Convention. VSDA ran simultaneously -- but unaffiliated -- with CES at the Sands/Venetian, and CEON (like most CE press we spoke with) never made it over there.

With CES not using the Sands Expo Center this year, the show supplemented convention center space with pavilions -- resembling a "tent city" -- in the parking lots surrounding the LVCC. Though CEA made the claim that the onsolidated venue transformed CES into a "connected community," the show still proved to be a challenge to navigate and see: some major exhibits were surrounded by unconnected or unrelated product categories.

MANAGING BIGNESS

Due to the many press events scheduled while the show was running -- in addition to the press conferences taking up most of the day before CES opened -- many media members were unable to get on show floor until late on opening day, January 6. Both the sheer size of CES 2001 and its many exhibits drawn from the IT and wireless world contributed to the commonly expressed opinion that CES had surpassed Comdex proportions -- and had become simply too big.

As showgoers may have noticed, the LVCC is also growing, and the new expansion -- which will eliminate the need for pavilion structures -- will be ready in time for CES 2002. Next year, home theater/home systems, and home information and wireless will be located in this giant new hall, which may require some Disney-like "people mover" wizardry. Marking a days-of-the-week move, CES 2002 will be held from Tuesday, January 8 through Friday, January 11, in the LVCC, Las Vegas Hilton, and Alexis Park Hotel.

TRENDS: CONNECTING COMPONENTS & CONCEPTS

The major theme of CES 2001 was the growing influence of all things digital, ranging from HDTVs and DVD recorders -- in three competing formats -- and DVD players, to wireless Web access devices and MP3-enabled products. CEON also detected some other trends related to the growing influence of digital. Though branded individual products will continue to drive sales, it seemed that CES 2001 reflected the importance of linking together or networking individual products (HD displays, DVD players) or product "concepts" (multimedia jukeboxes and hard-drive based devices).

CE makers are still grappling with copy protection, now even more complicated because of the content community's concern about digital content streaming onto the Internet. At the same time, CE firms are still trying to come up with ways to integrate products with services and revenue-producing models.

On January 11, just two days after CES closed -- and a year and day after their mega-merger was first announced -- America Online and Time Warner officially closed their merger, following FCC approval. It remains to be seen how the combination of these two giants will influence the CE world, and/or lead to mergers or joint ventures involving other media, online, or PC powers that also affect CE. It is interesting to note that during the CES panel comprised of CE company technology officials, moderated by CEON's editor, executives from Panasonic, Philips, Samsung, Sony and Thomson said the key technology influences at their companies were the Internet, broadband and wireless.

GATES UNVEILS MICROSOFT XBOX GAME CONSOLE DESIGN

The show's most heavily publicized product introduction occurred during Microsoft chairman Bill Gates' opening keynote, when he officially unveiled the design of Xbox, his company's first game console: the black console is emblazoned with a large "X" and a signature green Xbox "jewel" positioned in its center. Beyond marking the return of major game announcements to CES, Xbox -- which will take on Sony's PlayStation 2 while it also takes Microsoft into the livingroom and entertainment space -- has the makings of an impressive AV machine.

During CEON's private Xbox demonstration (and the public showing Gates provided during his keynote) Microsoft ran an Xbox emulator on a PC at one-fifth of Xbox's final power. As explained by Xbox team members, Xbox outputs in HDTV and supports 5.1 digital audio. Xbox will play DVD movies on its front-loading DVD tray if the consumer decides to buy an accessory Xbox remote control -- a decision Microsoft made to keep down the console's price.

The currently unpriced accessory will include DVD movie playback royalties and licensing fees (reportedly about $15 per machine) plus the remote's manufacturing costs. The Xbox console -- with pricing and U.S. launch data specifics not yet announced -- features four game controller inputs, an Ethernet port (for online gaming via broadband), a 8GB hard-drive, 733 MHz Intel processor and Nvidia graphics processing.

CE INDUSTRY STATISTICS: DVD SOARS, DTV SALES STEADY

Despite fears of an economic slowdown, most manufacturers seemed happy with holiday sales, particularly when it came to digital products, backed up by the 2000 year-end estimates released at the show. CEA revised its year-end 2000 estimate of total sales up to $90.1 billion, a 10% increase over 1999's $81.9 billion. The association also predicted that in 2001 sales to dealers would surpass $95.6 billion, up 6%.

At the show, CEA reported that during 2000, more than 8.2 million DVD players were sold -- but since CES, CEA said that shipments had reached just under 8.5 million. The association projects unit sales of 12.5 million DVD players in 2001. The DVD Entertainment Group (DEG) issued even rosier DVD sales numbers for 2000 during CES, estimating that consumers bought more than 9.8 million DVD-Video players during 2000.

There are two reasons for the disparity with CEA's numbers: DEG takes into account the approximately 700,000 players sold by Chinese brands (such as Apex, Oritron, Konka) that do not report their numbers to CEA. Additionally, DEG estimated that over 600,000 DVD players were incorporated in home theater systems and TV/DVD combinations -- units not factored into CEA's DVD total.

Sales of DTVs and displays surpassed earlier projections,
reaching an estimated 625,000 and $1.4 billion in revenue. CEA projects that number will increase to 1.13 million units in 2001, representing an 80% increase and accounting for more than $2 billion.

POST CES: VSB AFFIRMED, FCC CONSIDERS TUNER MANDATE

TV makers were no doubt encouraged by January 15's announcement by two major broadcast trade groups -- the National Association of Broadcasters (NAB) and the Association for Maximum Service TV (MSTV) -- regarding the DTV standard. Based on a series of tests and studies, the broadcast groups reaffirmed their endorsement of the 8VSB modulation standard and rejected the need to add COFDM. As Bill Kennard's FCC chairmanship came to an end on January 19, the FCC offered mainly good news for TV makers. The commission affirmed 8VSB, denied requests to set performance standards for DTV sets, and set deadlines to encourage broadcasters to provide digital service to their full service area.

However, the FCC is considering a DTV tuner requirement, and is asking for comments on how best to implement it (i.e. starting with larger screen sizes, what percentage over how long, etc.). CEA's president Gary Shapiro issued a statement applauding most of the FCC's actions but expressed "concern about the proposal mandating the inclusion of digital receivers in a specific category of analog television sets," calling it "anti-consumer" and predicting it "would slow the transition to DTV."

LIKELY FCC CHIEF WANTS TO AVOID DTV DISPUTES

The likely (but not yet named) new FCC chairman, Michael Powell, provided several signals about future DTV-related issues during his CES 2001 SuperSession interview with Gary Shapiro. Powell said he would prefer that the FCC not intervene in industry disputes over the future of DTV, and that the marketplace should determine the success of DTV. However, he acknowledged that the FCC will "eventually do something" about cable must-carry of broadcasters' DTV signals, but believes the FCC's role with regard to copy protection and home recording rights is "extremely limited, if existent at all." We will have to see what the new Bush Administration has to say about DTV.

PRIMETIME CRIME IN HDTV

CEA and TV makers believe that more HDTV content will be decisive in driving DTV sales, and a little more HDTV programming was recently announced for national channels. While the SuperBowl is set for broadcast in HDTV by CBS on January 28 (following several AFC playoffs in HDTV, also underwritten by Thomson), HDTV is now taking a higher profile in primetime "crime."

ABC's "NYPD Blue" is now being broadcast each week in HDTV (720p), marking the network's first regularly scheduled series in HDTV. And, HBO is now presenting the encore of the second "The Sopranos" season in HDTV and will also offer the third season -- which begins on March 4 -- in HDTV. This is the first time an HBO original series has been available in HDTV.

CES HDTV HARDWARE HIGHLIGHTS

Though HDTV was not the "star" of CES 2001, companies were out in force showing their wares. The show did not bring a deluge of new models, with many companies either showcasing models introduced at CEDIA or waiting for upcoming line shows that start next month and run until the summer. Companies seemed pleased with retail sales of HDTV models, and looked toward 2001 when it is widely believed that HD-level rear PTVs will overtake sales of analog RPTVs -- particularly as HDTV prices continue to fall.

Another important development was the arrival, finally, at retail of a number of long overdue DirecTV HD/ATSC set-tops (Panasonic, Mitsubishi, Toshiba and soon Sony) and more support plans from other brands, noted shortly. A major trend was the proliferation of display technologies companies were showing, with some major brands entering new display categories with new products.

RCA UNLEASHES LCOS HDTV

Perhaps the most significant announcement was made by Thomson -- though not officially exhibiting at CES -- when it announced and showed its official entry into the LCOS (Liquid Crystal On Silicon) display field at the Mandalay Bay. The company's first LCOS model will be the RCA L50000, a 50"W, 720 progressive scan rear projection unit incorporating a DirecTV HD/ATSC tuner, making it a full HDTV.

Expected this summer, priced in the $6,000 to $8,000 range, the L50000 will display up to 2.76 million actively lit pixels,
weighs about 100 pounds, with a cabinet depth of only 18" -- the same as a typical 19" TV. The model functions either as a sleek tabletop unit or as an entertainment center with its matching stand.

THOMSON'S TECHNOLOGY AND PARTNERS

Thomson's model is based on reflective LCD technology, also used by JVC in its D-ILA (direct-drive image light amplification) models, including JVC's upcoming D'Ahlia HD-level rear PTV for the consumer market. The RCA model relies on new microdisplay imaging technology that utilizes three reflective light valves called imagers, assembled with other new components to form the HDTV display's light engine. (JVC uses a single imager and a holographic filter in order to separate the three colors.)

Thomson is working with three key partners to bring its new LCOS product line to market: ColorLink (optical prism), Three-Five Systems (silicon imagers), and Corning Precision Lens (illumination and projection optics). Speaking at Thomson's pre-show press conference, senior VP Mike O'Hara said the company had made a significant investment in LCOS, which included a 30-person engineering team. According to O'Hara, "Our line of LCOS receivers will be lighter and less expensive than other advanced reflected light displays." Thomson is looking at other screen sizes and resolution levels, including a 1080p model.

JVC UPS D'AHLIA PRICE

JVC said that it will finally ship its D'Ahlia model in April of
this year, and the set will add a Digital Visual Interface (DVI)
to its two sets of component video inputs. And pricing for the
61"W the model has been increased to $10,000, up from $8,000 (or the $7,000 that has also been quoted), but the specific reasons were not provided. The addition of a DVI connection is apparently related to two other pieces of news, covered later in this edition.

SONY SHOWS GRAND WEGA LCD-BASED RPTV,
PLUS 40" CRT WEGA

Sony showed its first 16:9 rear LCD PTV for the consumer market in its Grand Wega -- as a "demonstration model" at CES. Using three wide-XGA LCD panel (and transmissive LCD technology) Sony showed a 50"W model. Pricing and introduction plans for this relatively slim and lightweight rear PTV are still being finalized.

For consumers who do not care about weight, Sony also introduced its largest Wega direct-view flat-tube TV: a 40", 4:3 XBR model that weighs close to 300 pounds. Claiming the mantle as the "industry's largest CRT television," the KV-40XBR700 Wega direct view features a Hi-Scan chassis for displaying an HD signal as 1080i, and will be available in October for about $4,000.

DTV PRICING NEWS FROM PANASONIC & ZENITH

Significant DTV pricing news was made by Panasonic and Zenith, though most of Zenith's DTV and HDTV introductions were covered in our report from its CES preview (CEON, 12/16/00).

Panasonic introduced a rear PTV 47"W HDTV monitor with a suggested retail price of $2,000 that is slated for May.

At CES, Zenith said it will market the first DTV with an
integrated ATSC tuner at under $1,000. The 27" standard
definition (SDTV) model will ship during the second half of this year, followed by a 32" 4:3 expected to sell for slightly more than $1,000. This makes Zenith -- which mounted a large and trendy "Club Z" booth on the floor -- the first brand to publicly announce plans to offer an SDTV with on-board ATSC tuner.

TOSHIBA, HITACHI HERALD HD-LEVEL PLASMAS

Toshiba and Hitachi both introduced their first HD-level plasma TVs for the consumer market. Toshiba's 50"W 720p (1366x768) model, with glass sourced from NEC, will arrive in May at $19,999. (In the analog, flat, direct-view TV category, Toshiba's FST Pure 4:3 models -- a 20" ($349) and 24" ($549) -- start arriving this month.)

Hitachi -- part of the PDP joint venture with Fujitsu (FHP Ltd.)
that also includes Sony -- will offer a 42"W 1024x1024 plasma during the first quarter. Pricing is yet to be determined with Hitachi officials grappling with Sony's aggressive $7,995 pricing for its similar PDP. Hitachi is also considering marketing 32"W and 37"W panels. (Other companies -- such as Pioneer, Zenith, Samsung, and Panasonic -- also showed plasmas covered in our CEDIA, Comdex or pre-CES reports.)

DLP: REAR AND FRONT, OFF-SITE AND ON

Showing its product line off-site at the new (and too big) Aladdin Hotel, Hitachi said that its 55"W 720p rear DLP, priced at $12,995, will finally ship this month -- joining models from Panasonic (52"W, $12,999, displayed at the LVCC) and Mitsubishi (65"W, $15,000, exhibiting very privately in Las Vegas).

Back at the LVCC, Sharp said and showed that it was using the 1280x720 16:9 TI chip -- featured currently in these rear-screen DLPs -- in the first front projector. The unpriced Sharp model is slated for Q3. As announced at CEDIA, Yamaha will also be marketing a single-chip DLP front projector, and provided additional information at CES. Though capable of projecting a widescreen picture, Yamaha's DPX-1 ($10,000, late Q2) relies on TI's 4:3 (1024x768) chip. However, Yamaha's front PTV features a tri-color wheel -- claimed as a first for a home front PTV -- for delivering higher contrast.

DISPLAY, SET-TOP INTROs FROM PHILIPS, SAMSUNG

Other brands were either adding to or tweaking their direct-view HD-level lines and/or announcing DTV set-tops. Philips finally said it will offer a DirecTV HD/ATSC box, with the unpriced model DSHD800 (sourced from Hughes) expected by the end of the first quarter. This fall, Philips will market 4:3 Real Flat HDTV monitors in 32" ($1,799) and 27" ($1,299). They join the three upgraded (with 3D Y/C digital comb filters) Real Flat widescreen models that are slated for the second quarter: 30W" ($2,999), 34" ($3,999; $4,999 black high gloss with Pronto remote).

Samsung debuted its new short-depth, DynaFlat HD CRT in a 30"W model that becomes the flagship of the Tantus DynaFlat series. Reducing the depth of a direct-view set as much as 20% -- to 17.9" -- the TSL-3099HR, with 1080i native display, will be available in June for $2,999. The company claims its delayed 720p fLCD rear PTVs (which also fall in the LCOS category) -- a 43W" ($5,999) and 50W" ($5,999) -- will now ship in early 2001. Samsung's DirecTV HD/ATSC set-top is slated for spring, as is Zenith's.

VALUE-PRICED NEWCOMERS KONKA, SAMPO SHOW

In order to make room for new models, Konka has reduced prices about $1,000 on average for its first (and delayed) HDTV displays and set-top. The models finally received FCC and UL approval -- after modifications were made -- this past September. For example, Konka's 30"W will now carry a $1,599 price, and $2,499 for the version with onboard DTV tuning. The Chinese TV brand is planning newer direct-view HD models and an updated DTV set-top that replace their predecessors' S-VGA jacks with HD component connections. Though Konka showed a 50" analog rear PTV as a "statement" at CES, executive VP Wendy Wu said the model that will be sold in the U.S. will be DTV-ready.

Taiwan's Sampo -- returning to the U.S. TV market under its name -- was off-site at the Mirage, meeting with media and dealers, presenting a line of value-priced digital products, including HDTVs. Sampo America's energetic president James Chen explained the company saw the sales opportunities (and margins) made possible with digital products. Sampo is currently focusing on distribution through regional chains and retailers represented by buying groups while also authorizing E-commerce sites.

Sampo's 34W" direct view with Toshiba-sourced flat tube offers both 720p and 1080i native display at $3,499. The company also sells a 32" 4:3 HD-level monitor at $1,299 and a 27" version at $999. Though Sampo showed a DTV tuner, Chen said the company "is not promoting it," since he expects ATSC decoding to go inside Sampo's sets -- both HDTV and SDTV -- in the future. Sampo is marketing a 42"W VGA-level plasma TV (using Fujitsu glass) at $8,995 -- one of the first with the Digital Visual Interface (DVI).

DVI MAKING AV LINKS

DVI, though originally developed for connecting PCs to digital displays, is becoming more important for linking digital AV devices -- and stealing some of 1394's fire. This development is seen in JVC's plans -- mentioned earlier in this report -- to add DVI to its D'Ahlia HD-level RPTV. DVI is currently the only digital interface with enough bandwidth to accommodate uncompressed HD digital video. EchoStar -- JVC's home satellite partner -- said at CES that it will now back DVI, and not IEEE-1394, because "DVI was better for copy protection than 1394."

However, EchoStar told CEON that its first HDTV set-top with DVI -- though demonstrated as a prototype at CES 2001 -- will not be available until 2002. Toshiba officials also mentioned they were looking at DVI, particularly now that DVI's second version would also support digital audio.

JVC HOLDS OFF ON OFFICIAL D-VHS HD VCR BOW

JVC showed -- but apparently decided to delay the official introduction of -- its consumer D-VHS HDTV VCR at CES. Officials seemed uncomfortable about discussing the product, which was at JVC's booth. But printed materials -- which made their way into some early kits in the press room -- indicated $1,999 pricing for the HM-DH30000. The model uses the high-speed HS mode for recording 3.5 hours of HDTV on a D-VHS tape, and features a built-in MPEG-2 decoder, DV input/output via 1394, a Dolby Digital decoder. But copy protection and connection specifics were unclear, which seems to have been the reason for delaying the official introduction. (We also saw a prototype D-VHS HD VCR in Zenith's booth with a built-in ATSC decoder.)

Adding to the confusion, it seems that a future JVC D-VHS model will incorporate DVI and High-bandwidth, Digital Content Protection (HDCP) -- a plan first announced last year (CEON, 4/15/00, part 1). Hollywood studios, which JVC hopes will offer D-VHS HD prerecorded cassettes, like DVI's uncompressed digital output, since it discourages home copying and streaming on the Internet. HDCP, which been endorsed by Fox, Universal, Warner Brothers and Disney, is only available over the DVI link.

NET INSIDE TV MAKES COMEBACK

As we predicted, Internet support built into TVs is making a comeback -- shown mainly in three platforms at CES: TeleCruz, Ch.1 and EspiriTV. As we reported, Zenith will offer a 27" TV this spring at $599 incorporating TeleCruz's (San Jose, CA) platform. At CES, Panasonic also announced plans to market TeleCruz TVs -- a 27" ($549) and 32" ($849) -- slated for summer. Other TV makers that plan to support TeleCruz include Konka and Daewoo.

Ch.1 (Santa Ana, CA) announced that its high resolution, integrated Internet architecture will be built into digital TVs. The first Ch.1-enabled TV will be a 36" 4:3 direct view HD-level display offered by Princeton Graphic Systems this month at $3,499. Ch.1's monthly service plans start at $8.95 for a single user or $11.95 for a family plan with an existing ISP, and $10 additional a month if the customer does not have an ISP. Ch.1 has also formed an alliance with NadaPC. NadaPC will make a 27" HD-level Ch.1-enabled TV available to consumers for $199 if they sign up for 36 months for NadaPC's ISP service at $21.95 a month.

EspriTV of LA said its Internet TV will be available in stores this summer at $998 for a 27" flat-screen model and $798 for a 16" set. EspriTV's partners include Acer, Planetweb and Finland's Turku TV, and consumers can select an ISP.

Future CEON editions will cover CES products and news regarding DVD recorders and DVD players, hard drives in a range of products, audio components, Internet radio, camcorders and more.

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Copyright (c) 2001 Consumer Electronics Online News. All rights reserved. The material may not be reproduced or distributed in any form without a subscription/licensing agreement from Costello Communications, Inc., NY, NY. The content is based upon information provided to the editor which is believed to be reliable. Costello Communications is not responsible for errors or omissions. (phone: 212-735-5771; fax: 212-735-6441.)