Logitech Buying Ultimate Ears

UelogitechLogitech announced today that it is buying high end earbud vendor Ultimate Ears. UE is best known for $1000+ custom headphones for professional musicians, but it also has a line of consumer headphones in the $40 – $400 range. Its business model is incredibly similar to Shure – both come from professional audio (initially microphones in Shure’s case) and branched out into the consumer space. In contrast, etymotic’s background was in hearing aids, and V-MODA seems to have come from the fashion world.

Without the custom business, Ultimate Ears is just another headset vendor, and its brand differentiation will be difficult for Logitech to maintain. But if Logitech leaves the core custom business alone, it can definitely build up the consumer side –  Ultimate Ears could definitely use better distribution and broader consumer awareness; Logitech excels in these areas – just look at what they did with Harmony (speaking of which, I just got in a Harmony One remote control; a review will follow shortly).

In terms of how Ultimate Ears actually sound, I have no idea. I have tested most of the competition – Shure, etymotic, Sennheiser, Sony, v-moda, and Bose, to name a few. I should be getting in some Ultimate Ears product soon for comparison.

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New Wireless HDTV Standard(s)

A bunch of big companies are getting together to standardize wireless home HDTV transmission. Again. The AP reports the details here. Most of the commentary I’ve seen has been fairly positive, though everyone points out that several of the big players backing WHDI are separately supporting WirelessHD as well. Could we have a standards war here?

Jeremy Toeman is taking a contrarian stance, saying it doesn’t matter. He makes some good points:

  • WHDI products aren’t expected to hit the market for at least a year or two
  • Testing this stuff will take forever
  • Even if it just adds $100 to the cost of products, the rise of brands like Vizio proves that many consumers are primarily driven by price

In the short term, he’s right. Nobody is going to put off buying a new TV today because in 2 – 5 years a wireless version will be available. Those who need a wireless solution today — in the home theater industry, installers will always run into problem rooms — will be willing to pay for expensive proprietary add-on gadgets that solve the particular problem. Longer term, though, it does make sense for there to be wireless options that work across vendors. At one time, wireless PC standards (ex: WiFi) were supposed to take over in the A/V world, but the bandwidth to pass HDTV unaltered on those doesn’t exist outside the lab. I wonder whether any of these consortiums will get something to market that actually works in a reasonable timeframe – I’ve seen demos of this stuff at trade shows for years now. Because even once TVs and set top boxes have such a standard built in, you’ll need to buy a new TV AND a new set top box to see the benefit. So for the forseeable future, nothing changes, which explains why Sony and Samsung are backing multiple standards, and why Jeremy can’t bring himself to care.

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In NYC next week? Come “Downtown”

Digitaldowntownhoriz_1_3

If you’re in the Wall Street area next Thursday, I’ll be moderating a panel at Digital Downtown on Flat Panel TV Trends:

Plasma and LCD TVs are the center of any digital home. The category’s
success is driven by the produts’ fashion appeal and picture quality as
well as the DTV transition. Listen to our panel of industry experts
discuss the current trends affecting the flat panel TV market and where
it’s heading.

The session is free to financial analysts, press, and "invited guests." You can register here.

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CES 2008: GizmodoGate

[Warning: rant coming]

GizmodoGate really bothered me. I was at that Motorola press conference. This was Moto’s first time talking to press/analysts in the post-Zander era, and they kept starting and stopping and starting and stopping. It was annoying for me to watch, and very hard for them to tell a smooth story.

If Gizmodo had characterized this as a prank gone badly wrong and apologized, it might have been forgivable (after all, some of us do have a sense of humor). Instead, Gizmodo’s unrepentent response left a really bad taste in my mouth. I’ve been a marketing professional in the past and now I’m on the analyst side of the table; I consider both worthy of respect. Not nearly as much respect as teachers or firefighters or Alzheimer’s researchers, but marketing, analysis, and journalism are jobs that need to be done and are worth doing well. If Gizmodo doesn’t respect these professions (or my time) and insists on acting like 14 year old boys, that’s fine, but they should get the same access as 14 year old boys get to CES and press conferences: none. Let the pros at engadget get the coverage and ad revenues.

-avi

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

Well, Ces_logo_2I’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

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RIP: First CRTs, now RPTVs

Sony_rptvThe AP is reporting that Sony is now exiting its "money losing" RPTV business  to focus exclusively on flat panel displays; Sony’s technologies of choice are LCD and OLED. (As an aside, I thought Sony’s TV business had finally pulled into the black after years of losses – the Playstation business was supporting everything else until the PS3, and then the situation reversed. I guess the flat panels were profitable but the big sets weren’t.)

This is the second major television technology/form factor to get the boot – outside of mass merchandisers its pretty hard to find a CRT any more, and none of the high performance brands (which is a bit of a shame, because picture quality on high end CRTs is really exceptional). While there are bound to be holdouts for another year or two it’s also clear that Sony is acting rationally. Flat panel prices don’t need to match RPTVs, just get within the ballpark for consumers to move to the thinner, brighter displays. We already saw a similar transition in computer monitors which transitioned to LCD from CRT well before price parity in popular sizes was reached.

I’m actually seeing a bit of this first hand as I try to sell my JVC LCoS RPTV in favor of a Panasonic plasma I bought to save space in my own home theater (and make room for a significantly larger screen that will hang in front of it for use with a new projector). When I talked to a friend who is in the market for a new big screen TV he was interested in buying the JVC only until he realized that it’s a projection unit rather than a flat panel even though he has no real need for a flat panel – it would go into the same cabinet regardless.

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Shopping for a New TV

I hit up six different stores recently trying to pick a 50” plasma to replace my 52” JVC LCoS rear projection 720p HDTV which is now three years old. The goal is to regain a foot of space in the room and then move to a larger front projection system (the screen hangs in front of the TV); the TV is used for broadcast material with the lights on, while the projector is used for movie watching with the lights off. I could have asked vendors to send over review units and then buy whichever one performed the best, but I’m time constrained – my contractor wants to start hanging everything already. (I’m using a general contractor for installation, a practice I do NOT recommend to others – good custom installers are almost always worth paying for.)

At the 50” size, plasmas are still less expensive than LCD, and the primary benefit of LCD – blinding brightness – is not important in my light-controlled room (we have directional halogen track lighting, so even with the lights on, no direct light falls on the set). Our seating position is 12 – 13’ back from the set; at that distance, there is no visible difference between 720p and 1080p sets, so a more economical 720p model makes sense. Then it came down to selecting a brand and model. When there is a difference between lower priced brands (Vizio, Sanyo, Zenith) and midpriced brands (Samsung, LG, Panasonic) it often shows up in how the sets process non-HDTV sources (there are other differences, too, but some of the budget sets are actually quite good). The difference between the mid-priced brands and the Pioneer Kuro is primarily in the black level and shadow details. Since we still watch a lot of non-HD programming, I felt it was worth the extra money to buy a set with slightly better processing, and I gave mid-priced brands primary consideration once I saw (when looking at the various sets at retail) that there did appear to be a difference. If the television was our only display, it would have been worth spending even more to get the best available (in my opinion, the Pioneer Kuro), but since the projector will be handling most of the movie duties, I wasn’t willing to spend too much of my budget on the plasma.

That left a showdown between Samsung’s 54 series and Panasonic’s 75U (there are slightly more expensive versions of each that add anti-glare shields, but that isn’t necessary in my room). Both sell for $1500 – $1700 except on Black Friday, when you can get another $100 – $200 off. After considerable evaluation in less than ideal circumstances (see below), I concluded that both are excellent options, and it really comes down to personal preference. The Samsung had much better contrast and more saturated colors. Everything “pops” on the Samsung. The Panasonic did slightly better with really noisy content, and had noticeably better black levels, which lent subtlety throughout the color range. Both can be adjusted to look better than they did in the store, and either would make a fine choice. I preferred the Panasonic.

However, the stores don’t make it easy to come to this conclusions, and I really have no idea how people not specifically looking for differences in black level vs. contrast ratio can make a rational buying decision. Only one of the stores (6th Avenue, a regional A/V chain) had a truly knowledgeable salesperson. None of the stores had tweaked the picture on any of the sets in any way (they were all set to whatever the manufacturer hoped would stand out on the showroom floor – the brightest and most oversaturated settings), which I expected from the big box retailers, but not the specialty stores. At least the aspect ratio was correct in most cases, so that’s an improvement, and nearly every unit was displaying widescreen material. However, while it was widescreen and may have been high definition once, it certainly couldn’t be called high definition by the time it got to the display, because not a single store had a clean signal feeding the sets. None. Not one. Not even at the regional specialty store with the knowledgeable sales guy. In every store, the signal was split and distributed to multiple sets, and by the time it got there, it was missing a lot of the original information.

A Dramatization: What the set should have looked like (left, click to enlarge) vs. what it actually looked like (right, click to enlarge):

Panasonic_as_it_should_be_3

Panasonic_as_it_it_was_3I seriously question how retailers can expect consumers to pony up thousands of dollars for televisions whose picture quality looks that bad (in the store). If an HDTV looked like that in my home, I’d return it.

At least it made evaluating each set’s processing a bit easier – every set was tuned in to a low resolution torture test. Different sets dealt with the lack of information differently: some made everything soft – so soft it looked like widescreen VHS – and some riddled the screen with digital artifacts so that everything appeared filtered through a 1980’s music video or was digitized to obscure nudity. There were a few sets with direct satellite feeds (or direct connections to an HD disc player); it seems cynical, but those tended to be more expensive 1080p models, and, possibly, higher margin sales for the stores. Conspiracy theory, or just plain retail incompetence?

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When did my day job kill my hobby?

Tpv77coverlI’ve been trying to catch up with my reading – nearly a year’s worth of home theater magazines have piled up. One thing I’ve noticed is an increased emphasis on flat panel TVs –  no surprise there, as that category  accounts for an enormous amount of sales activity. What I found odd was the sheer amount of coverage mobile devices now get in these publications. Sure, I expect convergence in Sound & Vision, which has steadily moved in that direction for years. But Home Theater Magazine? Aside from the odd TV with an SD card slot, what do digital cameras have to do with home theater? Someone has to explain to me why the iPhone gets flagged on the cover of The Perfect Vision, which used to be a magazine targeting videophiles.

I know the writers of  many of the articles – I see them at all the same trade shows and press conferences, and their content isn’t bad, it just seems badly out of place. Perhaps I’m a strange person to raise the question; after all, I left a thriving home theater research service at JupiterResearch several years ago to start up a Mobile Devices practice at Current Analysis.  I know that the iPod  has been a major challenge for traditional A/V vendors (you could probably make a strong case that   Apple and iPod dock vendors have stolen sales that once went to receivers, minisystems, and boom boxes) but when did the iPhone kill interest in speaker systems?

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State of HD Disc War

Hddvd_vs_bluray_sm

Engadget just posted a nice wrap-up of their CEDIA coverage. (I was not able to attend CEDIA; after Nokia’s big London event last week, I went to RIM and Motorola events this week and even had to follow the Apple announcements from afar due to scheduling). The big news both at CEDIA and in the press last month is around the HD-DVD Blu-ray war; HD-DVD gained a studio just when it appeared Blu-ray was pulling away with software sales, and both Samsung and LG have new dual-format players coming to market demonstrated at the show.

Back in January at CES, I attended the launch of LG’s first dual-format player, and it looked like it might assuage early adopters fears about getting into the market. Certainly, the new players, which support even more features of both formats, are welcome. However, with the software schism, prospects for success for either format have gotten much worse. The only way a HD disc format could succeed is if it brought new experiences to consumers along with overwhelming industry support.

With some content available only on one format and some on another, consumers are understandably gun-shy. So industry support is certainly far from overwhelming. But a more fundamental problem is why anyone beyond videophiles should care about either HD-DVD or Blu-ray.

(For a videophile, higher resolution is reason enough to embrace a new format. I’ve bought and re-bought DVDs several times just to get versions enhanced for 16×9 TVs and better transfers. I am decidely NOT normal. The problem is, there aren’t enough videophiles out there to make a mass market. Normal people need clear reasons to move to something new, and upsampled DVDs look pretty good.)

The last transition brought a lot more than just better looking video. The move from VHS to DVD brought:

  • noticeably better video on even the least expensive displays – VHS is downright fuzzy
  • slightly improved sound with even a basic setup, greatly improved sound when combined with an inexpensive 6 speaker Dolby Digital HTIB setup, and excellent sound with better equipment/room setup
  • longer lasting physical media
  • smaller physical media and packaging
  • a complete shift in industry pricing practices from business rental (where VHS movies cost $75 – $150) to consumer purchase (where DVDs started out at $20 – $30 and quickly dropped to $8 – $20)
  • no rewinding
  • random track access
  • extras such as director’s commentaries, deleted scenes, and related video material
  • multiple language tracks and subtitles

The move from DVD to either HD format is basically the DVD experience, plus:

  • improved video; this ranges from obvious improvement over upsampled DVD to none at all depending on the content, the display, and the setup/environment.
  • the potential for a further improved audio experience; right now this potential is limited to high end systems and is further limited by available content, hardware selection, and setup
  • the potential for interactivity, however, I have yet to see a compelling use of this technology. Keep in mind that DVD offered it’s own promising features that never amounted to much – remember "multi-angle?"
  • higher priced content

I made these points back when the formats were first announced, but it’s worth repeating now. Neither format offers average consumers enough to get excited about. If the PS3, which includes a good Blu-ray player as part of the package, had been a smash hit AND content providers all lined up to support the format, it might have had a shot at replacing DVD by default. But the PS3 has struggled out of the gate and is getting trounced by Nintendo’s Wii, which cannot play movies at all. Wal~Mart will be offering inexpensive HD-DVD players this Christmas, but if the content question is still in doubt (and titles are more expensive than DVDs), free players would not make much of a difference.

Consumers are moving to random access media. A strong case could be made for a new format that brought HD video resolution to a media server where it could be queued up at will from a visual menu, seamlessly distributed around the house, moved to portable/phone/car -based systems, and sliced and diced for instant access to greatest hits scenes (like a typical spliced-together YouTube video). This would be a significant improvement for consumers who today must load individual discs from racks of DVDs or download movies from iTunes to watch on a single PC or iPod touch. Of course, content owners won’t let this happen — they can’t even get out of their own way with HD DVD/Blu-ray. But if Hollywood doesn’t create and monetize a system like this themselves, consumers will eventually piece something like it together on their own with pirated/downloaded content and/or content ripped from DVDs. Sure, the video quality won’t be as good, but video quality alone isn’t enough to get consumers move to a new format – or keep them from moving to different format, either.

-avi

State of HD Disc War Read More

Count ’em: *TWO* CEDIA Expos

CediaCEDIA (the show) has been growing by leaps and bounds each year, so CEDIA (the organization) announced that they’re adding a Spring show in Las Vegas. I do think that there is room for another targeted CE show in the first half of the year; CES has gotten way out of hand. CES is so big and so crowded that it’s impossible for a small company’s announcement to stand out and nearly impossible to navigate for attendees.

But CEDIA is scaling back expectations for the event, saying that,

“Feedback from CEDIA members indicates that there is strong support for a second show that draws from a more regional electronic systems contractor base,” said Ken Smith, president of CEDIA.

"Regional contractors" are considered an appropriate target because the traditional lifecycle of CE products has the announcement at Fall CEDIA or CES in January, with products hitting the market in late Summer/early Fall in time for the holiday sales season. This doesn’t hold true for all products, of course, and is geared more towards the purchasing cycle of large retailers than indpendent A/V contractors – hence the focus on them for this show.

-avi

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