Digital Gadgets Makers Try to Click With Simple Sell
The consumer electronics industry’s ongoing transition from analog to digital design is far from simple. But convincing consumers that products such as DVD and digital TV not only offer better quality but are easy to use may be the most difficult challenge facing the $76-billion U.S. industry in 1999.
“Digitization leads to a complicated set of choices for consumers,” Howard Stringer, chairman and chief executive of Sony Corp. of America, said during opening remarks at the Consumer Electronics Show. “Our ability to help everyone else negotiate those choices without having to attend MIT will perhaps be the decisive factor in the success of this transition.”
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Simplicity was the buzzword at this year’s show, which ended Sunday and filled 22 football fields of exhibits at the Las Vegas Convention Center and surrounding hotels. More than 90,000 people gathered to discuss the state of the consumer electronics industry, which is attempting to integrate digital technology into a wide range of products, from hand-held organizers to TV set-top boxes and cellular phones.
The increasing complexity of these devices is driving the industry to devise more-intuitive systems and simpler instruction manuals, CES participants agreed.
“Our biggest challenge is to make these things easy to use for the consumer,” said Craig Mundie, senior vice president of consumer strategy for Microsoft, during a presentation subtitled “Computing Everywhere, Connecting Everything.”
The push for simplicity was highlighted by Philips Electronics’ introduction of “DTV for Dummies.” The 52-page booklet, compiled by Philips and “ . . . for Dummies” publisher IDG Books Worldwide, attempts to define “technical stuff” and is free to consumers by calling (888) 747-3138.
Without a doubt, digital products are slowly catching on. In simple terms, digital technology allows more information to be jammed into a signal, thus producing more efficient data transmission for creating clearer pictures and sounds.
Indeed, much of the discussion during the convention centered on the current stars of digital consumer electronics: digital TV and digital videodisc, or DVD.
Executives touted DVD player sales, which passed the magic 1-million mark in 1998. Manufacturers rely on this benchmark to help set prices and boost distribution. About 1.4 million DVD players have been sold since the format was introduced in early 1997, according to the Consumer Electronics Manufacturers Assn.
“The most important part of this growth is consumer acceptance of this [DVD] format,” said Mike Fidler, Sony Electronics’ vice president of DVD marketing. “They understand the benefit and appreciate what it offers.”
One in three DVD players sold in December carried a feature called Divx, or digital video express, a format supported by electronics retailer Circuit City. Sales of Divx players reached 87,000 from October through December. A consumer buys a Divx disc from a video store and has two days to watch it. If the consumer decides to watch the movie again or wants to buy it, the device communicates this information to the company through a phone line attached to the player.
Although there were numerous new high-definition TV models on display during the show, much of the talk about digital TV was a rerun of old issues, including the lack of programming, the astronomical prices--digital TV units start at about $5,000--and the refusal of cable operators to pass through digital signals.
A second theme played itself out in announcements made by many of the show’s 1,500 exhibitors: collaboration. The digital age and the complications it brings require greater collaboration across industries to bring products to market faster.
Partnership agreements of note included direct satellite provider EchoStar Communications’ announcement that it will incorporate Microsoft’s WebTV platform into its set-top boxes. The service will be available to consumers this spring.
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Interactive TV software maker OpenTV announced that Motorola will use its software in its Streamaster digital set-top box, to be available next year. And DirecTV said it will offer interactive programming developed by Wink Communications this year through advanced set-top boxes.
New product introductions of note included an audio-on-demand service from Redwood City, Calif.-based Command Audio Corp., which showed a device the size of a TV remote control that allows consumers to choose from a menu of radio programs.
Command Audio transmits these programs wirelessly through satellites and local radio networks to the device, which saves them for later playback, either through the car’s audio system or the hand-held device itself. The battery-powered gadget, manufactured by RCA, can be mounted on a dashboard and allows a driver to search for, fast-forward or rewind selections using buttons on the device and audio prompts.
The device will feature as many as 16 hours of memory and will be available in 10 markets this year for $199 and a $15 monthly service fee. Beyond the planned roll-outs in Denver and Phoenix this summer, the firm has yet to decide what the remaining eight markets will be, though it plans to provide the service nationally in 2000.
Uniden introduced a 900-megahertz cordless phone dubbed the “long-distance manager.”
To use the service, the user pushes a specific key before making a long-distance call. The phone then taps into a database with rates for more than 60 long-distance companies to find the lowest rate. Uniden compiles the database by downloading rate tables the Federal Communications Commission collects from service providers each month.
The service will not work for local toll calls. The phone will be available in May for $49.
“This eliminates confusion about what a consumer is paying for long-distance and saves them money,” said Uniden’s John Harris. “This gives consumers an easier way to make a call. They don’t have to worry about more than one thing.”
