3 Technologies from CES Will 2011 be the Year of the Connected Home?

CES was a great experience! The energy of the show felt entirely upbeat and positive, full of optimism for this New Year and the new technologies that will literally dominate our lives.

With such an abundance of amazing technological innovation happening all around us, I find it hard to believe that anyone can not be absolutely thrilled about the direction we are moving! So with that, I’d like to present a few of the technologies that I feel are going to be major influencers around our homes this year.

Windows Media Center and Windows Embedded

There was a ton of activity and buzz around what Microsoft has been doing with Windows Media Center in conjunction with Windows Embedded. Windows Embedded makes a lot of sense, especially when you take into account that Windows Embedded Standard 7 now incorporatesWindows Media Center into the mix. What this allows for is the ability for developers to build “a variety of smart, connected, and service-oriented advanced commercial or consumer devices.”

Gesture Technology (i.e. Xbox 360 Kinect)

Gesture Technology (also known as Natural Interaction because there are no controllers being held like the Wii and now PS3 have) could turn out to have a very big presence this year with all of the excitement around its potential uses, and most importantly, loads of development happening behind the scenes. We are talking about not just interacting with your TV, but also with your PC, and even eventually things around the home (like lighting) by using just your hand movements and voice. Trust me, this thing even out-does the clapper!

While this technology is very new, many people are recognizing the capabilities that lie outside of the gaming industry and touch upon the connected home and beyond. It’s going to be thrilling watching this ground-breaking new field grow!

The Connected Home

One thing is for sure: the idea of the “Connected Home” is still very real to a lot of people and more importantly, to a lot of manufacturers. We have only touched the tip of the iceberg, in my opinion, of where these new technologies can take our home entertainment experience. There are far too many fresh technologies coming out of CES that are geared toward creating or enhancing the Connected Home...

So while the Connected Home has been a topic of discussion for many years, there has also been innovation accompanying it along this journey. New technologies of today replace the new technologies of years past-innovation is always a forward motion path. Like all technology that sticks around for awhile, there comes a time that it will hit critical mass. You can see this trend in any technology we take for granted today, from the telephone to the TV to the cell phone. They are all examples of technologies that took years to catch on, but then suddenly, reached a point where everyone wanted it in their home.
This truly can be the Year of the Connected Home, but it will take a major push from people with louder voices than me to help people understand its meaning and benefits.

--- Content submitted from Home Toys ---

Facebook's 'Sponsored Stories' Turns Your News Feed Activity Into Ads

Facebook is rolling out a new advertising format called Sponsored Stories, which allows advertisers to prioritize content from the News Feed by turning your Facebook activity into promoted content.

Sponsored Stories are seen only by your friends that would normally see your stories in their News Feeds. However, according to the product's help page , there is no op-out option for Sponsored Stories.

Already, similarities are being drawn between Sponsored Stories and Twitter's Promoted Tweets, which presented advertisements in the form of content for the site. But Facebook's approach goes a step further by turning the activities of its users into revenue for the site.

Facebook hopes that these Sponsored Stories (aka "word-of-mouth recommendations") will engage users more than the site's targeted ads. "Seeing that a friend has checked in at Starbucks is a much more compelling reason to visit than a standard advertisement telling a user to go get a coffee," Inside Facebook writes.

For the complete article, please click here.

A Strategy Shift at Hulu? TWC and Bright House Expand ESPN Everywhere. Synacor Emphasizes TV Everywhere

More significant headlines from this week:

Hulu considers a strategy shift - becomes an online cable company? The Wall Street Journal had a very good article yesterday on the internal workings at Hulu. Among some of the inside conversations taking place: News Corp. (Fox) and Disney (ABC) are considering pulling free content from the site and offering more fee-based on-demand programming to other sites. Also, some at Hulu are considering turning the site into a "virtual cable network."

Time Warner and Bright House Cable Customers Get More ESPN Choices for TV Everywhere: Cable customers who subscribe to ESPN, ESPN2, ESPNU, ESPN Goal Line, or ESPN Buzzer Beater video subscription from these providers can now to watch a live stream of the same network online.

Synacor Establishes TV Everywhere Division: From CED Magazine, Synacor has created a division with a specific focus on TV Everywhere, particularly helping operators get their premium video offerings to mobile and portable devices. The company is expected to have solutions by Q2.

Adobe Enhances Flash Video, VOD Distribution

Adobe Systems Inc. signed an agreement with a Seattle-based company that affords media publishers enhanced security when distributing Flash-based transactional video-on-demand (VOD), subscription, electronic sellthrough and rental on PCs, mobile devices and pay-television.

Adobe said thePlatform’s mpx video management software gives content owners easier tools to deliver Flash-based premium video across multiple platforms. The top 10 video sites in the United States use Adobe Flash, making it the number one format (other than Apple’s QuickTime) for viewing video on the Web, according to comScore.

Ian Blaine, CEO of the Platform, said its software allows media companies to enforce content rights, business polices and monetization models, while making it appear seamless to consumers.

John Vartanian, chief technology officer with iN Demand, said the new tools would allow its pay-TV affiliates with a more secure streaming video delivery system. The company is a major distributor of Hollywood VOD movies to cable operators, including Time Warner Cable, Comcast, Cox and Bright House.

For the complete article, please click here.

FREE Webcast: SMB Technical Support Services

Join us for the SMB Technical Support Services: Taking Care of Business Webcast on February 10, 2011 at 1 p.m. Central time sponsored by PlumChoice Business Services.

Register at:
http://www.parksassociates.com/events/webcasts/2011/webcasts_plumchoice.htm

The U.S. Census Bureau estimates that there are more than 11 million small and medium business (SMB) enterprises in the United States (businesses employing between 1-99 employees). According to Parks Associates recently-completed U.S. small business survey (SMB Demand for Technical Support Services, December 2010), 44% of SMBs deal with computer troubleshooting issues on at least a monthly basis. Furthermore, about one-half deal with Internet access issues, 31% troubleshoot networking issues, and 27% deal with server problems. In total, SMBs lose dozens of hours a month in lost productivity dealing with technology troubleshooting.

With often very heterogeneous technology environments, the growing use of server technology, critical needs for data backup, and unique needs for IT support and management, the SMB market has significant demand for one-stop premium technical support services.

Presenters include:

Mike Cooch
Vice President & General Manager, PlumChoice Business Services

Kurt Scherf
Vice President, Principal Analyst, Parks Associates

Parks Associates and PlumChoice will provide attendees with a unique perspective on the SMB technical support marketplace by incorporating actual end-user market research and insight from the leading technology support company, currently serving more than 100,000 SMBs.

Google's ahead in the cloud

There is perhaps no company more entrenched in the cloud than Google.

To prove that point, the search giant has created the first computer operating system that's entirely online, so your computer won't even work without a Web connection.

The operating system -- named Chrome after the company's popular Web browser -- replaces traditional standalone computer applications. Google is hoping to rival the hold of Microsoft's Windows and Apple's Mac more traditional operating systems.

It won't be made public until this summer, but Google has launched a pilot program, putting free netbooks -- an unbranded bare-bones laptop called the Cr-48 -- running the OS into the hands of a few thousand early testers.

For the complete article, please click here.

Busy news week - Netflix, TiVo, ivi TV, Amazon and LOVEFiLM, Opera Software, Woomi, DivX TV

After a slighly lull following CES, earnings announcements and a full bevy of newsworthy announcements in the digital media and consumer electronics spaces have my e-mail inbox bursting. Here are a few items worthy of noting:

Netflix Subscribers Surge Past 20 Million
The guidance provided by Netflix's executives in Q3 2010 was subscriber gains of 2.7 million, and total subscribers between 19 and 19.7 million subscribers. In actuality, the company gained 3.08 million subscribers to end 2010 with 20.01 million (that's an increase of 63% from year-end 2009). Netflix's Watch Instantly service is now supported on more than 200 devices. Here's an interesting tidbit of trivia: Netflix says that the Apple TV is now generating more hours of viewing than the iPad.

ivi TV on the Ropes?
I've written about ivi.tv previously (here and here). The company's model is to take broadcast content from the Seattle, New York , Chicago, and Los Angeles and rebroadcast it online to subscribers who pay $4.99 a month. ivi TV officials believe that U.S. copyright law provides them with the right to rebroadcast the content as a de facto cable operator, but major broadcasters disagree. As they did with a service called FilmOn, the broadcasters are seeking an "enjoin" order, which would is basically a cease-and-desist order. In a court ruling last week, the broadcasters gained a victory.

Jim O'Neill at FierceIPTV summed up the court ruling from last week the best with this article:

A federal judge in Seattle late last week rejected a request from ivi TV for a declaratory ruling legitimizing its claims that it wasn't infringing on broadcasters' copyrights. District Court Judge James Robart wrote: "The totality of the circumstances here leads the court to conclude that ivi filed the action here because of imminent threat of suit by the Defendants, and to secure its own forum."

A bevy of broadcasters have sued ivi in New York seeking to stop it from broadcasting their signals. The Seattle ruling means that case can now move forward.

FilmOn does live on, at least in a role as distributor for independent or niche content. In fact, the company issued a press release today where it announced that it signed content agreements with Retro Television Network (RTV), The Ski Channel, The Documentary Channel, and Tuff TV.

Amazon Buys Full Control of LOVEFiLM
Unlike in the U.S., where Netflix dominates streaming video for TV shows and movies (our recently-completed study Digital Video: Three Screens and Beyond reveals that 22% of U.S. broadband households using Netflix's Watch Instantly feature), there is no pan-European equivalent. There are certainly some services to watch closely as their catalogues increase and their availability grows - among them are Acetrax, Qriocity (Sony), and Video Futur. LOVEFiLM is among the larger video distributors in Europe today, as it replicates the online DVD/Blu-ray Disc rental business of Netflix in the U.K., Germany, Denmark, Norway, and Sweden. It also has about 4,500 films and TV shows available online. This compares to 20,000 titles available for Netflix subscribers.

Amazon looks like it will take its vast distribution network - and digital video services - to Europe with its full acquisition of LOVEFiLM, announced last week. LOVEFiLM currently has 1.6 million subscribers.

Charter and TiVo Link Up
TiVo's future success is dependent upon lowering its dependency on the retail-based set-top box market and strengthening its relationship with operators and consumer electronics manufacturers that can license TiVo's software and user interface technology or use its hybrid set-top boxes (such as the TiVo Premeire). On January 18, TiVo reinforced its operator strategy by discussing its recent operator wins, including hybrid set-top box deployments with RCN and Suddenlink in the U.S. It notes that it expects similar agreements with Cox Communications and DirecTV in the future. TiVo's TiVo's software is currently ported to the set-top boxes of such European operators as ONO (Spain), Virgin Media (U.K.), and Canal Digital (Norway and Sweden).

On January 25, TiVo announced its latest operator partnership with Charter Communications. The cable operator will utilize TiVo's latest generation high definition user interface and TiVo Premiere set top box, as well as upcoming multi-room and non-DVR platforms. Beyond the initial phase, the strategy will encompass next generation platforms that will expand the service with new devices, features, and third-party applications. TiVo's discovery, search, navigation and recommendation features will bring Charter customers multiple forms of entertainment content, including linear TV, video on demand, online video, and IP applications.

Opera Software Gets Connected with Samsung and Broadcom
As I left CES, one takeaway is that - in the fourth generation of connected TV products - the market is still wide open for a host of technology developers to play a significant role. Whether it's system-on-chip companies, apps developers, user interface designers, content delivery and management specialists, aggregators, Web-on-TV technology providers, and advertising specialists, there is certainly no shortage of opportunity for this market.

Opera Software made two significant announcements in the past week - one with Sony and today with Broadcom. For Sony, the Opera Devices SDK provides the company's browser and other tools to bring Internet applications to Sony BRAVIA connected TVs and Blu-ray Disc players. In the Broadcom announcement, the Opera Devices DSK 2.9 will have out-of-the-box support on Broadcom's BCM7420 set-top-box SoC platform.

Woomi from Miniweb Interactive
Miniweb Interactive's history is in developing interactive features and user interfaces for television services. At CES, it unveiled Woomi, a connected TV services platform. It announced an early partnership with Turkish manufacturer Vestel.

Miniweb predicts that Woomi be available on over half of the world’s connected TVs by mid 2011. Going live across all Samsung smart TVs and Blu-ray players in the UK this month, woomi will then roll out to multiple European territories and the U.S. within the next three months. Woomi will also be distributed by Echostar Europe where it will be the main user interface for video discovery on a new, soon to be launched, set-top box. Also recentlynnounced are global distribution deals with Vestel, a Turkish white-label TV manufacturer, and with Chinese STB manufacturer, DTM.

DivX TV
At CES, DivX (Sonic Solutions, and now Rovi) announced new content and hardware support for DivX TV, its connected TV content platform, including Broadcom, Marvell, and Renesas.

Parks Associates is supporting DECT World & CAT-iq Conference

Parks Associates is supporting the DECT World & CAT-iq Conference on January 26th-27th in Amsterdam.

Bringing together the industry, the summit will analyse developments over the past 12 months and discuss the future of DECT and CAT-iq. With examples of DECT products live in the market and new technologies which are set to drive DECT use in both residential and enterprise markets, this year's conference is not to be missed.

For more information, please click here.

Game::Business::Law Summit at SMU

The gaming industry is going through radical transformations thanks to motion controllers, gesture recognition, 3D, digital distribution, social gaming, etc. The Supreme Court is also expected to rule on Schwarzenegger vs. EMA (Entertainment Merchants Association) in the next few months. If the Court decides to uphold the law, such decision will create stricter rules for game distribution.

In the midst of all these changes, it has become more and more difficult for game developers and publishers to navigate through different business models and to find the best monetization model for their games.

The Guildhall at Southern Methodist University in Dallas has organized a Game::Business::Law Summit, taking place Jan. 26 – 27, 2011. Several panels will investigate the current state of the industry, the implications of court rulings and the effect of emerging trends such as privacy protection and digital distribution.

We will be there and look forward to reporting about the summit.

UK Government Broadband Plan - The £98 Computer

Borrowing a page from computing projects in developed nations, Martha Lane Fox, the UK's "digital tsar", recently announced a program that will offer refurbished computers to UK consumers. These PC systems will be priced at only £98 and will include wireless broadband, flat panel screens, keyboard, mouse, telephone tech support, and delivery. Over 60 retail outlets are planning to sell these systems.

With a price that low for PCs, the UK will be performing an interesting experiment in supply and demand. The basic assumption of the program is that consumers cannot afford PCs. The interesting question will be whether the PC "have-nots" actually want a PC or to be online. While many of us who live and die by our e-mail and online access, there is a segment of the populace that just does not see the value of being online. So, will those without PCs snap up these £98 goodies? Will they be purchased by existing PC owners as computers for the kids? Will application developers spend their resources to create versions of their apps to run on these platforms (likely to be Linux)? Time will tell...

Analyst Roundtable What's Hot in 2011 WEBCAST - JAN 20

What will be the defining consumer and technology trends of 2011?

Join Parks Associates on Thursday, January 20th at 1 pm CENTRAL for the webcast, Analyst Roundtable What's Hot in 2011, and learn more about CES 2011 announcements and notable trends in the digital home and CE industries. This event provides primary consumer data and trending, predictions, and forecasts for a number of product and service categories.

Parks Associates research finds:
-- U.S. sales of smartphones will reach nearly 60 million in 2011
-- Internet tablets will reach more than 13 million in 2011
-- By 2014, annual worldwide shipments of Internet-connectable CE will reach close to 300 million units
-- 80% of flat-panel TVs sold in the U.S. and Western Europe will have 3D capabilities

***Register for this complimentary event:
http://parksassociates.com/events/webcasts/registration/webcast_registration-free.htm

++++++++++++++++++++++++++++++++++++++++++++
JAN 20 | 1 PM - 2:15 PM CENTRAL
Analyst Roundtable What's Hot in 2011 WEBCAST
***Presenters include: The Parks Associates Analyst Team ***

This webcast features analysis and forecasts from Parks Associates examining:
-- Connected consumer electronics
-- 3D TV
-- Gaming
-- Mobile and portable devices, with a focus on smartphones, tablet computers, and e-readers
-- Broadband and digital television services
-- Advanced advertising
-- Digital home technical support services
++++++++++++++++++++++++++++++++++++++++++++

We look forward to you joining us for this Webcast!

Boxee may go to subsidized deals to compete with Apple TV

Boxee may turn to subsidies to help get the price down and better compete in the market, company founder Avner Ronen said in an episode of the This Week in Startups show.He mentioned that the $200 street price for a Boxee Box was "way too expensive" to get mass market adoption and floated the idea as one option for future models. Nothing was definite in the talk and might not necessarily come about with a future deal.

Ronen also provided some brief hints at the possible future of Boxee. Gaming was a possibility as he noted that games had often driven technology adoption, but it would most likely occur through the browser in HTML rather than through proprietary apps.

Boxee hasn't given out sales numbers but has taken a mixed approach to competing with Apple. The hopes to subsidize the Boxee are a first sign of intent to more directly challenge the Apple TV and Roku's Internet Player, both of which hit or dive below the $100 price mark through their use of cheaper but roughly as efficient processors.

For the complete article, please click here.

Parks Associates is supporting The Gamification Summit

Parks Associates is supporting The Gamification Summit on January 20-21 in San Francisco.

The Gamification Summit brings together top thought leaders in game mechanics and engagement science for the first time. Hear what works and what doesn’t in this dynamic and fast-moving field through case studies, workshops, keynotes and panels delivered by experts such as Gabe Zichermann (author, Game-Based Marketing), Amy Jo Kim (gamification guru) and Jane McGonigal (TED fellow, author debuting her new book) and network with other leaders in the space. Attend Gamification Summit 2011 and learn how game mechanics and the new science of engagement are rewriting the rules of brand marketing, product design and customer acquisition.

For more information, please click here.

Motorola expecting to ship 800,000 Xoom tablets by April

As the glitzy Las Vegas curtain falls on yet another Consumer Electronics Show, tablet computers and 4G networks remain the talk of the town—specifically in relation to Motorola’s promising Xoom.

Moreover, the Xoom’s combination of a dual-core Tegra 2 processor, Google Android 3.0 (a.k.a. Honeycomb) and 4G LTE connectivity could well see Motorola’s slate even challenging Apple’s iPad in the tablet space.

The Xoom’s chances of success have today seen the emergence of shipping projections that suggest Motorola is hoping to shift somewhere in the vicinity of 800,000 units by the end of March.

Other features connected to the Xoom include a 10.1-inch HD screen (1200 x 800), a capacitive touch interface, front and rear-facing cameras (2.0 mega-pixels and 5.0 mega-pixels respectively), 1080p video playback, HDMI out, and a built-in gyroscope and accelerometer.

For the complete article, please click here.

Disney, Yahoo Look at Internet TV

Walt Disney Co. is discussing making video from some of its television networks available on sets embedded with Yahoo Inc.'s Internet-TV software, people familiar with the matter said.

Such new offerings would propel Yahoo into a broader battle to use the Internet to bring premium content to digital TVs, amping up the competition with traditional cable-TV and satellite operators.

Companies including Apple Inc., Google Inc., and Cisco Systems Inc. have entered the race to combine Internet video and conventional TV in a variety of ways, including selling separate devices that attach to cable boxes and building software into cable boxes and new TV sets

Disney, for instance, is eager to test the water with new digital models for distributing video, according to the people familiar with the matter. And News Corp. is talking with companies including Samsung Electronics Co. about licensing TV shows and movies from 20th Century Fox's library for use on tablet computers and Internet-connected TVs, according to people familiar with the matter.

For the complete article, please click here.

TV Everywhere Kicks it Up a Notch - CE Giants and the Cable Industry

It's the Monday after CES, so in addition to resting our sore feet, we're now starting to pull our thoughts together about some of the key takeaways from the show. From what I saw, I think that there were several items worth noting:

• More Connected TV Manufacturers Opening Up Apps to Third Parties: LG (Smart TV) and Panasonic (VIERA Connect) joined Samsung in supporting third-party application development for their connected TVs. We know that access to premium video such as TV shows and movies are the most significant driver for connected TV use today; opening up app development to third-parties is going to give the TV manfaucturers a low-cost way of experimenting with what other types of content are going to be important to consumers.
• Online Television at the Connected TV: To date, the only way for consumers to access current primetime television on a connected TV has been with a subscription to Hulu Plus. Google's struggles to secure content from the broadcasters has been well-reported. However, according to today's Wall Street Journal, Yahoo! may be in line to support ad-supported programming from Disney (ESPN, the Disney Channel, etc.). The Journal also reports that Samsung may be in line for programming from Fox. How ad-supported content makes its way to connected TV devices will be a key trend to watch this year. Companies such as mgMEDIA, JustAD.tv, and Zeitera are ones to watch.
• Online Video through Pay-TV Services: Cisco has announced a singificant initiative called Videoscape. This is intended to help service providers migrate their infrastructure to support IP video to set-top boxes and other devices, including connected consumer electronics. ActiveVideo Networks made its first "CloudTV" announcement with Funai. Amino Networks showcased a "companion" box to receive online content.
• Connected TVs and Casual Games: There were several announcements of note, and The Wall Street Journal covered them in a very good article last Friday. Among the announcements were companies such as VIZIO and OnLive, Panasonic and Gameloft, and STMicroelectronics and PlayJam.
• More Internet TV Boxes and Wireless PC-to-TV Solutions: Iomega joined D-Link as an OEM partner for the Boxee Box. And, with 9% of U.S. households connecting a computer to a TV to watch online video, the wireless PC-to-TV space has more solutions.
• Gesture recognition is coming to the TV: The success of Microsoft Kinect (eight million units sold in the first 60 days) and the major attention that products such as the Asustek/PrimeSense Wave Xtion lead me to believe that more natural interaction with both gaming and TV content are coming sooner rather than later.
• Appliance-based Storage Becomes Goes to the Cloud: Companies in the consumer storage space are all making remote access a standard feature on at least some of their drives and network-attached storage devices. Companies that I saw with solutions include Iomega, Western Digital, Seagate, Buffalo and others.
• Internet Security for Smartphones: As smarthones grow in popularity and use for e-commerce and banking applications, we're seeing a major push by traditional ISV (Internet Security Vendors) to extend privacy protection and anti-virus/phishing solutions to the mobile platform. Among companies with announcements in this realm were Trend Micro with Trend Micro Mobile Security for Android platforms. Companies such as Lookout and Mocana are others to watch.
• Internet Security for Connected TVs: Companies such as Mocana and McAfee (Intel)have just recently discussed the theats that could exist with connected TVs. Mocana recently published the results of some lab testing, where their engineers were able to successfully hack certain connected TVs and create fake Websites ("phishing") for Amazon.com and collect credit card information. In its recent 2011 Threat Predictions report, McAfee predicts that privacy leaks through connected TVs will become more of an issue, as malicious apps are created to steal consumer data. Look for security vendors to examine how best to protect the growing wave of connected TV devices.
• iPhone Backup Appliances and Services: I think that this is a nifty idea for those of us who aren't synching the iPhone with a computer on a daily basis. Plus, my five-year-old deleted a Christmas picture from my iPhone a couple of weeks ago. One product that caught my attention was the Iomega SuperHero Backup and Charger. Trend Micro also demonstrated SafeSync, a cloud backup service for iPhones and Android smartphones.
• The Smart Home Driven by the Broadband Provider: You coudn't miss Verizon's presence, as they were right in the middle of the press room. They showed off a new home monitoring and energy management solution called the Verizon Home Monitoring and Control Service. There were many other companies showcasing how home monitoring, energy applications, and security can be deployed as a broadband value-added service.

Among all of these headlines, I think that the announcements and demonstrations centering on how tablet computers (iPads, Android devices) and connected TVs will be able to access and interact with pay-TV services were among the most noteworthy. The major announcements included:

• Comcast to Support Live Streams and VoD on on Tablets and Connected TVs: Apple’s iPad® as well as Android™ powered tablets. The 2011 roadmap includes DVR and VoD content available on the connected devices in the short-term, and live TV streaming from Xfinity later this year. Samsung promoted "session-shifting," where a movie played on the tablet computer can be paused and then watched on the connected TV. The cable company will enable in-home streaming for live and On Demand content this year. Later this year, customers will be able to watch live news, TV shows and movies in their homes whenever they want.
• Samsung and Time Warner Cable Partner: Samsung also announced that Time Warner Cable customers would be able to access cable services through its connected TVs and tablets.
• Sony and Time Warner Cable: Sony's connected TVs will be able to receive content from Time Warner Cable. A write-up is available at Bloomberg.

Last year, we saw several European pay-TV providers dabble in the use of the connected TV as an alternative set-top box (LG, TeliaSonera, etc.), but this was the first time I had seen U.S. operators really showcase the potential of using secondary and tertiary screens as both control points and as viewing platforms for online content.

I really like what was showcased, in that it demonstrates how several major challenges to the cable operators can be addressed. First, there's the significant cost of deploying a set-top box to every television in the home. This can be greatly reduced with their support of retail-based products. It's like the vision of tru2way, but one that may actually work.

Second, it's going to provide some incentive to a consumer who may be considering dropping their cable service, but who sees the value in not being forced to consume all of the content on the TV. I think that this is where a concept like TV Everywhere should go. It's not just about offering a few paltry cable channels and programs online; it's offering a truly untethered experience for the subscriber.

Third - and I'll admit that this is a longer-term opportunity - it really got me thinking about how the operators can use complementary viewing devices as ways to provide non-intrusive recommendations and interactive features to viewers in a way that doesn't take over the TV screen and cause distractions. What if - for example - they can start to develop feedback mechanisms where the more they know about your viewing habits, they can push some additional content offerings your way on the tablet display? I think that this could start with their free VoD offerings. If they know that I regularly watch CSI, they can highlight previous episodes that I may have missed in their VoD library. Maybe they can start to offer recommendations to other types of programming that would interest me (wouldn't their channel partners love to see how a cable company can offer ways to grow the amount of time that a viewer spends on particular networks' channel?). Now, if they can figure out the whole targeted ad delivery thing, this would be quite an experience!

As always, CES is rough on the feet, but it is exciting to see developments that match technology capabilities to consumer demand. Where those two things intersect, I think you'll see more opportunity for success.

What "Cloud Computing" Could Mean to Consumers

In November, we shared some thoughts about what the "cloud" could mean for consumer products and services. For a review, you can click on this link. Microsoft's recent Windows 7 commercials have helped to bring broader market awareness about what practical end-user applications can come as a result of cloud-based services.

To review, the consumer cloud products and services as we categorize them are:

E-mail/Calendaring/Family Sync: These are features such as Apple’s mobileme, Microsoft’s Live Mesh, and service provider-offered (Deutsche Telekom is a great example, with a service called Connected Live Experiences at Home) calendaring, messaging, and media (photo) synching across devices such as computers and smartphones. Technology providers in this space include NewBay Software and a past sponsor of CONNECTIONS™ - viacube.

Online Backup Migrating to Cloud Services: The first iteration of online backup was merely as a away to automate back-up of home computers (Carbonite, Mozy, etc.). Services such as SugarSync, SpiderOak, and ZumoDrive are taking online backup and making it a cloud service by making the content accessible (and sharable) from multiple types of IP-connected devices. Motorola just purchased Zecter, the company that developed ZumoDrive. This would indicate that online backup of the smartphone will be more of a focus for handset developers and wireless/mobile carriers.

Consumer Electronics-based Cloud Services: Right now, we see three ways that this is being implemented:

• Attached Storage/NAS Clouds: We’re seeing the major consumer storage companies (Buffalo, Data Robotics, Iomega, Seagate, Western Digital, etc.) implement remote access and interaction with files, media, and content that is stored on attached drives and network-attached storage devices. Again, the interaction can be done with any IP-connected device, including smartphones. At CES, Iomega was heavily promoting this at CES, with something they call the Iomega Personal Cloud).
• Appliance-based Clouds: If a consumer doesn’t have attached storage or network-attached storage, there are appliances from companies such as Cloud Engines (Pogoplug™), CTERA, and iTwin that turn any device with local storage capabilities into a cloud server. Again, the key is the ability to interact with and access your content from any IP-connected device.
• Smartphone Clouds: Trend Micro showed SafeSync, which is online backup and remote access to your iPhone or Android smartphone content. Carbonite and SugarSync also offer this.

When it comes to digital media, the current iterations of “cloud media” services are what we would term “one-way solutions.” The model today is to host and push content toward the consumer and not necessarily provide for the upload and storage of existing copies of all of your movies and music. Digital music services will probably be the first to move to true two-way clouds, likely starting with Apple, Amazon.com, and perhaps Google.

Music Services: There are few digital music services that are cloud-based today (meaning the consumer can move an iTunes library to a hosted storage service and access it anywhere). The rumor is that Apple will be unveiling something like this.

Video Services: UltraViolet (DECE) and Disney’s KeyChest get the major headlines in this space. They are proposing services where a consumer still buys the physical copy of a movie (Blu-ray), but with that will come a digital copy that is hosted and available on different types of consumer electronics devices. In the meantime, Verizon is already offering Flex View, which allows FiOS subscribers to order a movie (rental or purchase) from multiple types of devices and then access it from different platforms – smartphone, computer, television.

Gaming Services: Again, a very one-way cloud model, where companies such as OnLive have console-style games that can be played on multiple types of connected consumer electronics. At CES, they announced a partnership with VIZIO, where OnLive gaming services will be available on VIZIO’s connected TVs.

Last week, we were quoted in a SmartMoney magazine article about consumer-oriented cloud products and services. The article also made its way to The Wall Street Journal. We certainly see an early market for cloud media in online backup services (Carbonite, Mozy, SugarSync, etc.) extend their functionality to include access to stored content and media on multiple types of IP-connected devices. We also anticipate that appliance-based consumer storage products (attached drives, network-attached storage, etc.) will take on "cloud" attributes, allowing consumers to access and update files and content from any connected device. At the just-completed 2011 CES, news from the Digital Living Content Ecoystem (DECE) - the UltraViolet consumer brand - indicates that we're a step closer to seeing a VoD-based cloud service become consumer-ready.

One quote in the article that I'd like to clarify is one in which I am quoted as saying that "People storing data in the cloud might also save money on their actual gadgets, because they may be able to get by with a smaller hard drive and a less powerful processor."

Actually, what I told the reporter is the opposite of that. We anticipate that - for the foreseeable future - online data/backup services complement local storage such as computers and attached hard drives, because they provide redundancy and the flexibility of multi-platform access. We don’t see this diminishing the need for robust storage in the home over the next five years, but it could eventually bring forth the long-anticipated arrival of “thin client” computing, where devices don’t have to rely on large amounts of storage and processing. But it’s a long-term evolution.

Entrants Flood Race to Rival iPad .

A race to respond to Apple Inc.'s hit iPad gadget enters a new phase next week, as a host of companies use a Las Vegas trade show to talk up a broad array of tablet-style devices.

Companies expected to introduce touchscreen tablets at the Consumer Electronics Show include big names such as Motorola Inc., Dell Inc. and Acer Inc., as well as smaller manufacturers. Trying to stand apart, the devices will offer displays of various sizes and different operating systems. Some will have two built-in cameras; others none.

The stakes are high for many players—particularly Microsoft Corp. and Intel Corp., kingpins of PC technology that have so far struggled to match the momentum in tablets of Google Inc.'s Android software and chip designs from ARM Holdings PLC.

A number of firms, including ViewSonic, Dell, Acer and Asustek Computer Inc., are hedging bets on Android with additional Windows-based models. Still others plan to emulate Apple by using their own software.

For example, BlackBerry maker Research In Motion Ltd. has said it will use the QNX operating system for its seven-inch PlayBook, which the company unveiled in October and plans to sell for less than $500. RIM, which bought QNX Software Systems in April, plans to show off the PlayBook again at CES.

For the complete article, please click here.

Qualcomm to Buy Atheros for $3.1 Billion

Qualcomm Inc. agreed to buy Wi-Fi chip maker Atheros Communications Inc. for $3.1 billion in cash as it aims to address growing demand for devices that use Wi-Fi to connect to the Internet.The deal—Qualcomm's largest acquisition to date—fills a hole in the company's communication-chip offerings. The importance of Wi-Fi has been growing as more devices—including smartphones, tablets and notebooks—connect to the Internet.

The deal, which values Atheros at $45 a share, comes during a flurry of acquisitions in the technology sector and puts pressure on Qualcomm's rivals, such as Broadcom Corp. Chip companies, including Intel Corp., have been using their high levels of cash to make purchases to add more features to their chips. Qualcomm has about $10 billion in short-term cash and marketable securities. Adding long-term marketable securities raises the figure to $18.4 billion, with $12.1 billion of that located offshore, the company said.

A takeover of Atheros gives Qualcomm greater exposure to Wi-Fi chips and other markets where it doesn't have a significant presence, including providing components for laptop personal computers, which now come standard with Wi-Fi chips.

The deal is expected to close in the first half of 2011 and modestly add to Qualcomm earnings in fiscal 2012. Atheros will be renamed Qualcomm Networking & Connectivity, and Atheros President and CEO Craig Barratt will join the company as president of the group. Mr. Jacobs said Qualcomm also plans to retain the rest of the Atheros senior management team.

For the complete article, please click here.

What's In Store for Technology in 2011

It has been a big year in personal technology, from the debut and early success of Apple's iPad, to the rise and continuous improvement of Google's Android smart phone platform, to the continued surge in social services led by Facebook and Twitter.

Apple: Coming off a highly successful 2010, in which it introduced a new category of portable computer—the multitouch tablet—and sold millions of the product, Apple will have to withstand an onslaught of competitors by wowing consumers again with the second version of the iPad. At the same time, it will have to make a widely expected transition for the iPhone from a single carrier in the U.S., AT&T, to a second, likely Verizon

Google: The search giant, also riding high, is now in so many product areas it competes with nearly everyone. In its core search business, it must focus on fending off a surprisingly strong challenge from Microsoft's Bing by giving consumers more attractive, actionable results.

Microsoft: The software giant still generates strong consumer loyalty with its older products, like Windows and Office and Xbox, all of which have had updates in the past year or two. But it faces big challenges in two hot areas: smart phones and tablets. Its new Windows Phone 7 platform has some nice design features, but also some missing capabilities that need to be addressed.

RIM: The BlackBerry maker had a good 2010 in some ways, though sales were propped up by two-for-one giveaways, and consumer surveys show enthusiasm fading for the iconic smart phone. The company has an answer: a new software platform called QNX, but is vague on when that will show up on the BlackBerry. For 2011, RIM's big move will be a new QNX-based tablet, the PlayBook, which looks speedy and highly attractive in the limited demos RIM has provided.

HP: The technology behemoth's laptops and printers have proved popular with consumers. But it hasn't had any real presence in smart-phones, tablets or consumer cloud services. To solve the problems, in 2010 HP bought innovative but struggling Palm, whose smart-phone operating system, webOS, and phones, the Pre and Pixi, got good reviews but sold poorly and didn't attract many third-party apps.

Facebook and Twitter: The twin leaders in social networking were red-hot in 2010, attracting vast numbers of users. They have huge opportunities for further success, but face challenges. Smaller services, like social-coupon company Groupon, continue to emerge with new social and community ideas consumers like.

For the complete article, please click here.

Sales of Internet-connectable TV devices soaring to 350 million by 2015

Consumer desire for on-demand and online video content will motivate sales of Internet-connectable TV devices to nearly 350 million units worldwide by 2015, setting the stage for intense competition in app development.

Parks Associates' Connected Living Room: Web-enabled TVs and Blu-ray Players forecasts worldwide sales of Internet-connectable HDTVs, Blu-ray players, game consoles, and digital video players such as Roku and Apple TV will grow approximately fourfold from 2010.

The market has reached the fourth generation of connected TVs, and all major manufacturers are debuting new models at CES with innovations in content aggregation, apps development, and user interfaces. Content options are finally catching up to the hardware innovations, and growing libraries of on-demand movies and TV available are starting to unlock the potential of connected TV devices as multifunction online entertainment and communications platforms.

The expanded presence of these devices will increase opportunities for apps developers – including third-party developers and giants such as Google, Samsung, and Yahoo! Consumers will also be key in deciding whether a controlled apps environment or the open-browser approach advocated by Google will be the dominant model for the connected TV market in the next five years.

Companies across the value chain – including content aggregation, broadcast television, delivery and management, CE, pay-TV providers, and retail – have significant opportunities to deliver content to a large number of new devices.

Access to premium and user-generated video is a main driver for adoption and use of Internet-connectable devices. Access to streaming music, online photos, social network updates, personalized news and information, and simple games are also popular features for current users and likely buyers.

The market for Internet-connectable device sales over the next five years has a strong international focus. With pay-TV penetration lower in certain European and Asia-Pacific markets and with the broadcast television community showing strong interest in supporting technologies for interactive television, connected TV devices will become de facto set-top boxes in many of these countries. At the same time, today’s pay-TV providers will embrace the delivery of managed video services to connected TV devices to differentiate, increase customer satisfaction, lower capital expenditures by deploying fewer set-top boxes, and reach new bases of customers.