Reflections on the 2008 Consumer Electronics Show
John MacWilliams, Bishop & Associates Inc.
 

Announced at CES, the Sony 11” XEL-1 is now available. The price is $2,499. It signals, perhaps, the next big leap in flat-panel display technology:

Just released! Sony’s industry first OLED (Organic Light Emitting Diode) TV, the XEL-1, has a three-millimeter-thin panel, and offers unparalleled picture quality, with amazing contrast, outstanding brightness, exceptional color reproduction, and a rapid response time. The XEL-1 delivers outstanding performance in key picture quality categories. OLED technology can completely turn off pixels when reproducing black, resulting in outstanding dark scene detail, and a contrast ratio of 1,000,000:1. OLED creates virtually unmatched color expression and detail, and enables rapid response times for smooth and natural reproduction of fast-moving content, such as sports. The XEL-1 features the latest connectivity options, including two HDMI™ inputs, a digital tuner, and a Memory Stick® slot for viewing high-resolution photos.

The XEL-1 also illustrates the kind of product a sustained commitment to R&D can produce—even in the consumer electronics arena. The Consumer Electronics Show was again hosted by the Consumer Electronics Association in Las Vegas in early January. Hundreds of thousands of industry observers attended, many trudging with weary feet through acres of display booths, craning their necks for a look at the next great “toy.” A significant portion of these attendees were CE industry personnel, many of whom were “preaching to the choir.” But, this year’s show also saw a further increase in interest from other industries—notably automotive, where GM introduced a 150 mpg fuel-cell vehicle.

Bill Gates was again the CES keynote speaker, and announced that this was his last CES keynote. He will be winding-down his Microsoft duties later this year, devoting more time to philanthropic activities.

The general impression of this year’s CES was: Bigger, but not necessarily better. There were huge crowds, the show was entertaining, and the event is always a “must” for industry players. But there were few blockbuster announcements, and little sense of “wow,” other than bigger and higher definition displays, and a few glimpses of the future, like the Sony OLED. This industry, once the domain of cheap radio and TV products, has become so accustomed to innovation that it now takes a real shocker to excite. Also, the show is so large, it is difficult to comprehend its full scope and depth—or at least to uncover some gems of creativity.

But there were significant, if not breakthrough, developments:

• Advanced flat panel HDTV, including true HD 1080P

• Blu-Ray possibly overtaking HD-DVD

• Ultra-thin (1”) LCD/TVs from Panasonic, Samsung, and others.

• 1,000,000:1 contrast ratio, 3mm thick OLED (from Sony)

• 150” diagonal plasma TV from Panasonic

• Wireless video from Belkin and others

Belkin introduced a Skype desktop Internet phone. It works with your PC on, or off. It has global calling, and voice mail and text messaging are also available on your computer.







Cadillac Provoq, a luxury crossover hydrogen fuel cell concept vehicle, debuted at CES. It uses GM’s fifth-generation fuel cell system, coupled with a drive system similar to the one on the Chevy Volt. The Cadillac Provoq is fast: 0-60 mph in 8.5 seconds. A detailed review of the Cadillac Provoq is on the hydrogen cars website, www.hydrogencarsnow.com/cadillac-provoq.htm.

A smaller, but no less enthusiastic, contingent will be in San Francisco for Mac World, home of iMACs, MacBooks, iPODs, and iPhones. Arguably, Apple has recently stolen a lot of thunder from CES with its own blockbuster product announcements. This year there will probably be a 3G iPhone:

Apple iPhone

• Quad band GSM + edge mobile phone (3G announced)

• 2MP camera

• iPod music player

• Speakerphone and microphone

• Wireless web communicator,  includes Safari

• 11.6mm, 0.46” thick (!)

• Mac OSX

• 3.5” LCD

• Finger-controlled multi-touch

• WiFi and Bluetooth-enabled

• Email

• PC/Mac synchronization

• Visual voice mail

• Docking cradle

Consumer electronics used to be about radio and TV, and the emergence and development of Japanese manufacturing and design after World War II. But now, CE includes many new products resulting from the digital convergence in the consumer, computer, and communications space. This trend has accelerated over the past few years, with major new products being introduced in all markets. They include:

• Digital cameras and camcorders, > 6MP and HD video

• GPS navigation systems with real-time traffic, weather, and voice command

• Wireless networks, including 802.11n, WiMax, and others

• High-definition TV: a transformation from CRT to plasma, LCD, with subplots, including DLP and LCOS

• Set-top boxes, HD recorders and DVD players—Blu-Ray and HD-DVD, with the former seeming to be the winner.

• iPods, MP3 and media players—now becoming a huge content market with iTune sites

• Game machines are approaching virtual reality.

• Hard disks and flash memory cards for media players, cameras, and set-top boxes

There is also an evolving, and some would say, a consolidating set of OEM players with huge stakes in engineering, product innovation, and marketing. Below is a partial list of some of the OEMs that illustrate the digital convergence paradigm. On this partial list, 15 are from North America, 16 are from Asia, and four are from Europe. With the rapid growth of developing markets, one wonders how many new players from China and/or India might be on this list five years from now. From a contract manufacturing standpoint, there are a large number of other players, mostly assembling in China. Foxconn is a major player, as are Flextronics and the Taiwanese ODMs.

So what we have is a bifurcated consumer electronics market: OEMs from North America, Asia and the EU—aided by key component technologies from Intel, AMD, and others, all innovating, designing, and marketing CE products. Plus, a large number of contract manufacturing companies also do assembly. Some OEM players are listed below:

The Converging Computer-Consumer-Communication OEMs

Implications for Connectors
I/O connectors are important in consumer electronics: USB, IEEE1394, HDMI, RCA, and other audio. Often I/O interfaces are customized to control input devices, or provide ruggedized ergonomics. Increasingly, Bluetooth and WiFi are embedded in devices, but most devices still have legacy connectors.

Generally speaking, CE connectors are nickel-plated or use gold sparingly. Connectors tend to be industry standard and lower-cost than those used in computers and communications, but this is not universal. Some CE connectors are quite sophisticated. Many are very small, precision devices. Millions of cable assemblies are also used, and these tend to be more generic, but again, “Monster Cables” do exist in an increasingly sophisticated home theatre environment.

As in last year’s CES article, we again look at specific connector designs—what is gaining, what is declining. The general trends are toward connecting digital circuit boards, more use of computer-generated industry standards, a lot of I/O connectors, and questions about wireless interconnects, such as the emerging wireless USB.

Some Key Connector Types and Trends

Future Outlook
The consumer electronics industry is now at the cutting edge of semiconductor technology. Unlike in the past, the IC industry is now 40 percent dependent on CE market demand. This is felt across the “consumerization” of the computer/peripheral and communications markets as well. The direction will be toward more embedded computer chips, more multi-core processing, and an increase in System-in-Package (SiP) and System-on-Chip (SoC) designs

• Connector applications will be impacted by future generations of semiconductor ULSI technology (Moore’s Law).

• Connector applications will be impacted by future generations of wireless technology.

• Historically, these trends have produced higher unit volumes and lower prices.

• The net effect on connectors has been 6 to 7 percent annual growth—in some years, double-digits.

• Will increased volume offset losses in I/O connectors incurred from wireless, reduced legacy ports?

• The world economic situation, and increasingly high oil prices, have become serious issues that could result in a 2008 recession.

• Will Asian and ROW market demand offset possible drops in Western demand?

• Will CE manufacturing, which moved massively to China, begin to stabilize around regional market demand?

• Where will future centers of manufacturing excellence be located, and what roles will Western markets play?

• Will tensions in the Middle East, Asia, and elsewhere be controlled?

• Watch IC technology trends; they will drive future CE product developments.

John MacWilliams
Senior Consultant and Analyst, Bishop & Associates Inc.
John MacWiIliams has been in the electronics industry for over 40 years. His main areas of experience have included: U.S. competitiveness programs, market research studies, authored articles, field sales and management, product marketing management, strategic marketing, new product planning, venture development, advertising and media relations, direct sales, manufacturers representative, distribution sales management, and international marketing. MacWilliams has worked with AMP, Diceon Electronics, TRW, and IRC in marketing management positions. Prior to joining Bishop & Associates, MacWilliams served as the group director of marketing and new product planning for AMP.

MacWilliams graduated from Lehigh University with degrees in business management and engineering.