CES 2008: High Def Disc Format War Over, Thin TVs, and Steve Jobs

Well, I'm back from Las Vegas, but my body is still on the wrong time zone. There were three main stories at this year's CES:

1. The death of HD-DVD. With Warner’s announcement that it will no longer sell HD-DVD movies, the high definition disc format war is effectively over with Blu-ray as the victor. Toshiba (one of HD-DVD’s primary backers) offered a weak reaction, saying that it is stunned and upset, but that HD-DVD has been declared dead before. That's true, but formats are only as valuable as the content that they are tied to. With Warner gone, only Paramount and New Line are left in the HD-DVD camp, and even they will probably switch to Blu-ray before the end of the year, once the rumored exclusivity period of their arrangement with HD-DVD is up.
2. Super-thin flat panel displays. Several vendor showed incredibly thin flat panel televisions – as thin as 9mm (a prototype) to 1.7” (likely to become a production model shortly). You might wonder whether there is a market for slightly thinner displays – after all, how much thinner is 1.7” than a 4” plasma or LCD today? The answer is, a lot thinner. The difference is that a 4” display is still a box you’re putting on the wall, while anything under 2” approaches being part of the wall itself. The prototypes on display looked incredibly good, and will be extremely exciting to interior designers. I expect that super thin displays will make up a significant premium segment of the market in just 1 – 2 years time. The phenomenon of super-large flat panel displays, on the other hand, has limited appeal beyond the super-wealthy, even as prices inevitably drop from the “if you have to ask” range, simply because an 11 foot long flat panel literally cannot fit around a typical home’s layout to the installation site.
3. Waiting for MacWorld. Last year, CES was completely upstaged by the iPhone at MacWorld the same week. This year, MacWorld is back to the week after CES, but the shadow of Cupertino was palpably draped over Las Vegas this year as well. I have no inside information on what Apple will announce next week, but Apple’s head of PR promised me that Apple’s announcements at MacWorld will be better than anything I’d see at CES. I believe him, and I suspect the rest of the industry does, too.

Other CES trends:

• Several systems for moving HD content wirelessly were shown, either as part of the television purchase or as a separate accessory. While wired connections will continue to be the bulk of the market for some time, the availability of wireless options is extremely welcome as a solution to specific installation challenges.
• Home storage was another big theme, with solutions that ranged from simple connected hard drives up to enterprise-class servers with friendly user interfaces.
• The industry continues to introduce boxes that let you watch PC content on TV. Yawn.
• GPS was everywhere at the show, particularly from vendors who either are new to the U.S. market or new to the market generally. Prices are already dropping due to the competition (and ready availability of the components needed to become a PND competitor), and it will be extremely difficult for all these vendors to make money, even if they can avoid being cannibalized by GPS on cellphones. These issues and more were discussed during my CES Education session on GPS Monday afternoon. The panel was well attended and the discussion could have easily continued for an additional hour or two beyond the time allotted.

Due to a hyper travel schedule I will not be in SFO for MacWorld next week, however I will be covering announcements made at the show from afar. Should be interesting!

-avi

Comments

[HDTV Ratings]

Very reminiscent of Betamax vs. VHS with regards to the HD DVD vs. Blu Ray. Not to say that HD DVD is superior to Blu Ray, because I really don't know. But I've heard that Betamax was far superior, but lost out due to its inability to gain enough support from the major studios.