At Blinking Gizmofest CES, Cable, CE Worlds Collide

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Last week marked the annual gadget mecca that is the Consumer Electronics Show, which never seems to disappoint in its array of useful, interesting and just plain weird stuff.

My favorite from last year was a his-and-her toilet seat, equipped with red and green lights to alert someone — in the dark — as to whether the seat is up or down.

Because the national and trade press teemed with coverage of home media servers, digital and HDTV television sets and the widening array of devices that do better with broadband connectivity, this column will instead attempt to translate the working challenges of the consumer-electronics (CE) community, as it continues to try to collaborate with cable.

COST-PHOBIC

There are a few plain truths about the CE industry that differentiate it from cable.

The first is extreme cost sensitivity. Every quarter, CE manufacturers confront a grim shuck and jive to achieve even single-digit margins. Every nickel of cost is real. Every flopped gadget is blood on the bottom line. Every bottom line is a gasping game of endurance.

Because of the thin margins on manufactured products, CE companies are increasingly interested in finding higher-margin wares. This may mean services, or hardware capabilities that require two-way connectivity.

Maybe there's a hard disk in a TV, which turns it into a digital video recorder. Or maybe there's a wireless keyboard that lets a TV collect entertainment from a remote server — cable's or otherwise. These are natural collision points, or at least a difficult batch of negotiations.

Another working challenge for CE manufacturers is pricing expectations. Fierce competition in the CE world conditioned us all us to expect regular and dramatic price reductions on the various products they make. Witness that pre-Christmas Wal-Mart stampede to a stack of astoundingly cheap, $40 DVD players.

A third CE challenge is constancy, which has a codependent: Quantity. Together, constancy and quantity advance the expected theater of price cuts. Gizmos that don't change can be scrutinized and honed for cost efficiencies; cost efficiencies drive volume. Gizmos that do change remain expensive to produce.

The stability thing is hard for cable. Upgrades become difficult. Consider a "cable-ready" CE device that lacks sufficient processing power or memory to accept a software download of a new service that comes along, say, three years after a consumer purchases the device. Then what?

The perennial problem of cable's legacy set-top base, and its inability to do more than it already does, morphs into a problem of a cable-and-CE legacy base that can't be switched out because it's glued together.

If your house is like mine — a geek-o-sphere — you probably have piles of chargers for piles of small, electronic devices that you no longer use. Now imagine a pile of large electronic devices, no longer used. Eek.

The perfect cable world, in the eyes of a CE manufacturer, is one that offers simple "rights of attachment" rules for its gadgetry. Gizmos attach to the cable plant, bandwidth-hungry services spill into them and everything works just fine, end of story. Beyond making cool things that consumers want, CE, in its perfect cable world, carries no obligations except to "not harm" the cable network.

Therein lies a problem. It is a solemn fact of life that extreme cost reduction can beget suboptimal quality.

Fifteen years ago, a big grumble was the shielding on TV tuners. Sometimes, it was so thin that signals leaked out. Leaky signals can and do attract Federal Communications Commission inspectors. (Years ago, I watched a lab engineer remove the back of a TV set and wrap a piece of tin foil around its tuner, just to keep signals from leaking out.)

Those were simpler times, before digital set-tops came in, with stacks of software, and two-way connectivity, and an assortment of interactive applications — the guide, video-on-demand, subscription VOD.

WHO DO YA CALL?

The concern is now this: A person brings home a CE device. It contains, within its plastic housing, some form of cable set-top box. Something goes wrong. How is the problem isolated, let alone corrected? You can't exactly ask a customer to remove the back of the set.

Cable's view of a perfect CE world is, not surprisingly, somewhat different. It starts with a desire for device performance that is at least equivalent to the contemporary cable set-top. That means enough processing power and memory to mirror the requirements for OpenCable Applications Platform middleware, applications, navigational systems and security.

It also means avowing to the inevitability of change, so that if a popular new service enters the scene in future years, it can be downloaded and accommodated in software.

The working challenges of the CE community are real. Just as real is the need for both sides to work through those challenges, to uncork the innovation in devices that work better with broadband.

The answers started to unfold last year. They continue to progress at a (very) accelerated rate. Just because something is hard, doesn't mean it can't be done.

There's a light at the end of this tunnel, and it shines on something slightly more important than the toilet.

Stumped by gibberish? See past translations atwww.translation-please.com.

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