YEAREND-Consumer electronics embrace digital era
Reuters - 02:53 p.m Dec 23, 1998 Eastern
NEW YORK(Reuters) - The digital revolution in consumer
electronics, including personal computer gadgets, began to gain
attention in 1998, and it is expected to take a stronger hold of
the market in the coming year.
In 1998 the consumer electronics industry set the groundwork
for the switch to digital products from analog products, as
companies formed alliances and introduced new products in the
personal computer gadget, digital camera and digitial television
arenas. Digital technology produces sharper, higher-resolution
images and crisper sound.
''Everything is going from analog to digital,'' said Kevin
Hause, an analyst at International Data Corp. He added the shift
will drive the consumer electronics market for the next five to
six years.
Personal computer-type gadgets are perhaps most reflective of
the oncoming digital age, and 3Com Corp.'s Palm Pilot is
everyone's favorite example. It offers calendar and address
book functions and the latest version will allow access to the
Internet and real-time data such as stock quotes.
''These products let you take pieces from the Internet away with
you,'' said Matthew Nordan, an analyst at Forrester Research.
In 1999, 3.5 million units of devices similar to 3Com's Palm
Pilot, smart phones and near-personal computers will be sold in
the U.S., with a vast majority of them pocket-sized, Forrester
predicts.
As PC gadgets become hot items, home networking will grow,
and may down the line reach a ''Jetsons-esque'' level, in which
everything in the home is computerized.
In the near-term, however, networks that enable users to
connect multiple PCs to printers and other PC gadgets in the
home will grow, especially as users get broadband Internet
access, analysts said.
Other digital products that have gotten attention recently include
CD-writable products, which allow consumers to record on
compact discs, and minidisc players. Diamond Multimedia
Systems Inc. has elicited an uproar from record studios with its
device that allows music to be downloaded from the Internet.
''We will see more varieties of products and different storage
capacities coming to market -- provided Diamond survives the
litigation process here,'' Hause said. ''It's going to be an
interesting race to watch.''
On the video end there is DVD, which is entering the home
entertainment realm. However, PaineWebber said in its 1999
technology forecast that DVD will not make major progress in
the market against CD-ROM's due to continued vendor
wrangling over standardizations.
Still, the products are attracting users. In the first 18 months of
sales, 365,000 people started using CD's, 394,000 VCR's and
1.07 million DVD, said Jeff Joseph of the Consumer
Electronics Manufacturing Association (CEMA). Digital VCR's
are expected to be the next hot video item, as consumers become
attracted to their real-time pause and personalized viewing
abilities.
Although digital cameras are still mostly practical for advanced
personal computer users, according to International Data analyst
Ron Glaz, sales are picking up and manufacturers are coming
out with more types of products at lower prices, especially in
the higher-resolution megapixel varieties.
Manufacturers have introduced digital camera products that are
not dependent on PC's, such as printers that allow digital
cameras to print their pictures sans computer.
''(Buyers) won't be the individuals who bought a VCR and still
have the light blinking. The product is still for the
above-average PC user,'' Glaz said.
For kids, some of the hottest gadgets have been interactive toys,
as Hasbro Inc.'s Furby has penetrated many households this
season. Forrester analyst Seema Williams expects interactive
toys to continue to be a hit with kids.
''I do not not see the underlying technology (sensors, infrared)
in these machines getting much cheaper, but rather the way they
use the technology getting smarter,'' Williams said.
And then there was this past autumn's high-definition TV
launch. The year 1998 witnessed digital TV's first steps toward
the mainstream, with manufacturers and networks putting forth
high-resolution HDTV.
In November, digital signals were transmitted in major U.S.
markets and stores began carrying high-priced HDTV sets for
curious consumers. Although some in the industry are pegging
the advent of digital TV to be as momentous as the introduction
of color TV, many industry analysts expect it to be a long time
for the now-costly technology to have any impact on the
mainstream consumer.
CEMA expects the industry to have sold about 150,000 HDTV
sets by the end of 1999. However, other analysts are more
conservative, saying it will take at least until 2002 or 2003 for
all the issues involved to be settled and standardization to occur.
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