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CES to spotlight digital evolution

Annual trade show will offer peeks at the latest in high-definition technology, notebook chips and PlayStation Portable.

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By Richard Shim and David Becker
Staff Writer, CNET News.com

Gadget lovers hitting Vegas for this week's Consumer Electronics Show will find an oasis with high-definition technology, new notebook chips and a peek at the PlayStation Portable.

"Last year, nearly everyone had a plasma television, but this year we'll see high-definition technology moving beyond the living room," said Jenny Miller, a spokeswoman for the Consumer Electronics Association, the trade organization that produces CES.

Sony, for example, will demonstrate a number of high-definition products, including a camcorder that can record in high definition and a new Memory Stick technology that streams HD video. Other companies will debut high-definition products as well.

Making digital video services available over broadband networks will also be on the agenda. SBC Communications CEO Edward Whitacre Jr. is expected to reveal details about plans to deliver video over a broadband Internet connection.

"There's an evolution to all things digital," Miller said. "It's digital everywhere in everything."

With the decline of the Comdex trade show, CES is now essentially the only game in town for major tech shows. The 120,000 to 140,000 people expected to attend this year reflects the show's potential influence—not only in consumer electronics, but in industries such as computing, entertainment, networking and broadband.

During the show, which this year officially runs Thursday through Sunday, executives talk about trends and how their companies are jumping on hot opportunities. At CES—which first took place in New York City in 1967 with 200 exhibitors and 17,500 attendees—seeds of major products have often been planted, including the VCR, CD and DVD.

Stephen Baker, an analyst with retail tracker NPD Techworld, agrees that high definition is the wave of the future but stresses that the last two years' talk of a digital transition must be translated into action in 2005 if manufacturers want consumers to bite.

"If you've got a digital-entertainment strategy, this year has to be the year you execute on it," Baker said. "So many of these advanced products will be coming down in the affordable range by the holidays of 2005, and consumers are going to need a reason to buy new products."

Sony, with a broad business portfolio including movies, music, games and electronics, has lots to gain from the digital transition, but it's been hard for the company to get all of its businesses to commit to the same plan. That situation may be changing, though. Sony recently said its digital-audio players will natively support the MP3 audio format—something it previously refused to do because of copyright concerns. That's the first sign that its music business has relented on an issue that would benefit the electronics business and is perhaps a hint of things to come.

In addition to showing a camcorder that can record in high definition and a new Memory Stick technology that streams HD video, Sony will showcase video products such as the Qualia 006, a 70-inch rear-projection TV powered by a liquid crystal on silicon (LCOS) chip coming in January. Other liquid-crystal display TVs that use panels from Sony's joint venture manufacturing plant with Samsung will be shown. Sony will also offer a first glimpse of Blu-ray Disc products, which will be available in 2005.

More PSP details likely
Game enthusiasts, meanwhile, will be awaiting the Wednesday press conference, where Sony will show off its PlayStation Portable, the handheld game player and multimedia gadget the company launched in Japan in mid-December. Sony has said the PSP will arrive in North America and Europe in the first quarter, making CES a likely opportunity to release exact dates and pricing information.

Meanwhile, video game wags have been speculating that Microsoft Chairman Bill Gates will use his traditional CES opening keynote address on Wednesday night to unveil the successor to the current version of Microsoft's Xbox game console. But most analysts, including Matt Rosoff, who works for research company Directions on Microsoft, say that such an announcement is more likely to come at the Game Developers Conference in March, the same event where Gates revealed plans for the current Xbox in 2000.

"I'd be surprised if they unveil a lot of details about the next Xbox in January," Rosoff said. "There's still a lot of room to sell software for the existing console. The longer they can keep consumer excitement focused on their current platform, the better it is for their business."

Microsoft popped the cork a few months ago on its biggest consumer electronics interest, the Windows XP Media Center Edition 2005 operating system and related products, Rosoff noted. The company may have a few new Media Center add-ons or partner alliances to reveal at CES, but mainly Gates will deliver a greatest-hits set on Microsoft's vision for the digital home, Rosoff predicted.

"I'm expecting he'll use it as an opportunity to highlight the whole 'digital media anywhere' message," Rosoff said.

Taste of Sonoma
The rivalry between chipmakers Intel and AMD will also play out at the show. Both will tout new chips for notebooks and will likely outline plans to bring so-called x86 chips into consumer electronics products such as DVD recorders and set-top boxes. Both are developing chips tweaked for this market.

Intel CEO Craig Barrett will deliver a keynote speech in which he'll discuss Intel's efforts in mobility and the digital home and offer a preview of the chipmaker's latest platform for notebooks, code-named Sonoma. The new mobile technology is expected to be unveiled in the middle of the month and some notebook manufacturers, including Sony, will be demonstrating units using Sonoma.

Barrett may also trot out a celebrity guest or two. Last year, actor Morgan Freeman announced he would release a first-run movie on the Web in 2005. Intel may also further sketch out plans to unite Hollywood with tech.

Although it will have a two-story booth at the show, Intel will probably be more low-key this year. Last year, it unfurled plans to make TV chips; eight months later, it canceled those plans.

Texas Instruments, which has become a dominant player for chips in projection TVS, will have several products on the floor. CEO Rich Templeton will speak at the event.

Also noteworthy
Tempe, Ariz.-based Brillian, which manufactures rear-projection high-definition televisions, will show off its LCOS TVs, which it had to delay in 2004.

On the digital-imaging front, Canon and other major manufacturers likely will have a few new video camcorders to show, said Chris Chute, an analyst for research company IDC. Video and still-camera manufacturers may also display new wireless capabilities for hooking cameras to PCs and other devices.

But major camera releases are usually saved for the Photo Marketing Association conference in late February, Chute observed, making CES more of an opportunity to showcase items already on the market.

A Hewlett-Packard representative said the company will hit on similar themes at this year's CES as it did during the 2004 show. Last year, HP announced plans to deliver digital-entertainment products, including television sets, and unveiled its digital music partnership with Apple. The announcements led to the unveiling of products such as the Apple iPod from HP music player and a 42-inch plasma-screen television.

Apple will likely be holding off any major announcements until next week, when the annual Macworld trade show will take place in San Francisco. Apple is widely rumored to be releasing a flash memory-based version of its iPod portable music player.

Chipmaker Freescale will be demonstrating a cell phone using Ultrawideband, a wireless-networking technology connecting electronics devices. Alereon will show a version of the technology as well.

CNET News.com's John Spooner and Michael Kanellos contributed to this report.

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