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IBM to Launch Linux Handheld
NEW YORK (AP) - Widening its adoption of the Linux (news - web sites) operating system, International Business Machines Corp. Friday said it would collaborate with Sharp Corp. of Japan on a handheld computer that runs the open source software.
The handheld, aimed at corporate clients, will be launched in the middle of next year.
It will be based on Sharp's Zaurus, which went on sale earlier this year and runs on Linux. The Zaurus has so far failed to catch on with consumers in a market dominated by handhelds running operating systems from Palm Inc. and Microsoft Corp.
IBM is a big supporter of Linux, which anyone can freely use and modify. While mostly used in Web servers and corporate systems, Linux is seen as a counterweight to Microsoft's dominance in desktop software.
"Linux makes a lot of sense, for multiple reasons," said Rodney Adkins, head of IBM's Pervasive Computing Division. "It's much more attractive for (software) developers to develop for, given its open nature."
The Zaurus will also run software written in Java, a programming language created by Sun Microsystems. It allows software to run on all manner of computers regardless of their operating systems.
The Enterprise Edition Zaurus will allow workers to wirelessly access corporate databases, check inventories and order supplies, the companies said. It will connect to IBM's Websphere business software package and its DB2 database program.
IBM supports similar functions for handhelds with Palm and Microsoft software.
OT: LOL, believe it or not i did very little (or maybe i did so much i cannot remember)- i just blame my warped sense of the world on my jesuit upbringing; here is a URL you might enjoy:
http://www.npr.org/programs/atc/features/2002/aug/firesign/index.html#firesign
why does this stock remind me of the titles to the albums of THE FIRESIGN THEATRE
Waiting For The
Electrician, Or Someone
Else Like Him
How Can You Be In
Two Places At Once
When You're Not
Anywhere At All?
Don't Crush That Dwarf, Hand Me The Pliers
I Think We're All
Bozos On This Bus !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
or how $2.6M in projected revenues becomes $2.6M in accountable losses
"write offs of accounts receivable" --i presume Dataplay
e.Digital Corp. Files Sept. 30, 2002 Form 10-Q Quarterly Financial Report
Business Editors
SAN DIEGO--(BUSINESS WIRE)--Nov. 14, 2002--e.Digital Corp.
(OTC:EDIG) today filed its Form 10-Q for the quarter ended Sept. 30,
2002 with the Securities and Exchange Commission.
For the quarter, the company reported a comprehensive loss of
$2,673,578 ($0.02 per share) on total revenues of $290,290. The loss
includes costs associated with inventory write-downs, price reductions
on the company's branded products, logistics and distribution
expenses, and write offs of accounts receivable.
Ran Furman, CFO, said, "As stated at our Annual Shareholder
Meeting last week, revenues for the September quarter were much lower
than expected, particularly for our consumer electronics business
unit. We have also applied extremely conservative accounting measures
and the Company took write offs in all applicable areas in the
September quarter. Product revenues and accounts receivable reflect
our revised accounting procedures under which we now defer revenue
from products sold to most of our retailers. Revenues for most retail
consumer electronics sales are only realized when products are sold
through to consumers, regardless of when they were shipped.
"We have taken action and continue taking action to streamline our
operations, control overhead, increase margins, and improve our
financial performance. Since June we have effectively reduced our
monthly burn rate by over forty percent, from $500,000 to under
$300,000, and we continue to trim costs where necessary. In addition
we are confident that we will be able to restructure all of the
Secured and Unsecured Notes prior to December 31, 2002," concluded
Furman.
Fred Falk, president and CEO, stated, "Regardless of the internal
and external reasons, we are very dissatisfied with the quarter's
financial results. The Company has been through a difficult quarter
and we are making changes and improvements. We are proactively moving
the company forward in business areas where the company can be
successful.
"We are placing strong emphasis on increasing revenues in the four
areas we outlined at our Annual Shareholder Meeting: 1) Selling
through European, Asian, and U.S. regional consumer electronics
retailers; 2) OEM development, non-recurring engineering fees, and
other services; 3) Licensing and royalties from OEM-branded
e.Digital-powered products; 4) Selling e.Digital-branded products
through our online store at www.edigital-store.com and other e-tail
channels.
"We are experiencing an increase in online sales of our consumer
electronics products, and, based on the success of digital music
player products during last year's holiday selling season, we expect
revenues to improve during the current quarter. Because the bulk of
holiday sales take place between Thanksgiving and Christmas, we will
be able to better gauge the extent of our revenue improvement in
December. We look forward to releasing further product and OEM
business development information this month and in December,"
concluded Falk.
About e.Digital
e.Digital Corp. designs, licenses, brands, manufactures and sells
digital audio products and technologies. The company's trademarked
digital audio players include the MXP(TM) 100, Treo(TM) portable
digital jukebox line, Silhouette(TM) ultra-slim MP3-CD player, and
Odyssey(TM) line of flash- and hard disk drive-based players.
e.Digital launched WeDigMusic.com to complement its digital audio
players by providing consumers with a one-stop-shop for streaming and
downloading music from thousands of artists on the Web. The company
also offers an engineering partnership for the world's leading
electronics companies to link portable digital devices to PCs and the
Internet. e.Digital develops and markets to consumer electronics
manufacturers complete end-to-end solutions for delivery and
management of open and secure digital media with a focus on music,
voice and video players/recorders, and automotive infotainment and
telematics systems. Other applications for e.Digital's technology
include portable digital music players and voice recorders; desktop,
laptop and handheld computers; PC peripherals; cellular phone
peripherals; e-books; video games; digital cameras; and digital video
recorders. Engineering services range from the licensing of
e.Digital's patented MicroOS(TM) file management system to custom
software and hardware development, industrial design, and
manufacturing services. For more information on the company, please
visit www.edig.com. To shop at the e.Digital online store, please
visit www.edigital-store.com.
Safe Harbor statement under the Private Securities Litigation
Reform of 1995: All statements made in this document, other than
statements of historical fact, are forward-looking statements.
Forward-looking statements are based on the then-current expectations,
beliefs, assumptions, estimates and forecasts about the businesses of
the Company and the industries and markets in which the company
operates. Those statements are not guarantees of future performance
and involve risks, uncertainties and assumptions that will be
difficult to predict. Therefore, actual outcomes and results may
differ materially from what is expressed or implied by those
forward-looking statements. Factors that may affect the Company's
businesses, financial condition and operating results include future
products and results, technological shifts, potential technical
difficulties that could delay new products and services, competition,
pricing pressures, the uncertainty of market acceptance of new
products and services by OEM's and end-user customers, effects of
changes in the economy, consumer spending, the ability of the Company
to maintain relationships with strategic partners and suppliers, the
ability of the Company to timely and successfully develop, maintain
and protect its technology and product and service offerings and
execute operationally, the ability of the company to attract corporate
financing and the ability of the Company to attract and retain
qualified personnel. These factors may also include, but are not
limited to, general market conditions, the Company's ability to
develop new products to meet market demand, the Company's ability to
maintain cost controls, the mix of products and services the Company's
customers require and the effects of natural disasters, international
conflicts and other events beyond the Company's control. More
information about potential factors that could affect the Company can
be found in its most recent Form 10-K, Form 10-Q and other reports and
statements filed by e.Digital with the Securities and Exchange
Commission ("SEC"). e.Digital disclaims any intent or obligation to
update those forward-looking statements, except as otherwise
specifically stated by it.
Editors Note: e.Digital is a trademark of e.Digital Corporation.
All other company, product, and service names are the property of
their respective owners.
--30--dw/sd* js/sd
CONTACT: e.Digital Corp., San Diego
Investor Relations:
Robert Putnam, 858/679-1504
robert@edig.com
KEYWORD: CALIFORNIA
INDUSTRY KEYWORD: COMPUTERS/ELECTRONICS ENTERTAINMENT INTERNET
MUSIC SOFTWARE EARNINGS
SOURCE: e.Digital Corp.
Today's News On The Net - Business Wire's full file on the Internet
with Hyperlinks to your home page.
URL: http://www.businesswire.com
"I shall not today attempt to further define [pornography]...but I know it when I see it."
--Justice Potter Stewart in Jacobellis vs. Ohio, June 22, 1964
Justice Potter Stewart !!!
pam--i was going to post this response but i changed my mind; well certainly edig is involved because we all remember FF's words:
E.DIGITAL CORPORATION ISSUES PRESIDENT'S NEWSLETTER
SAN DIEGO, CA - January 31, 2000 - e.Digital Corporation (OTC: EDIG) In a letter to shareholders of e.Digital Corporation issued this morning, President & CEO Fred Falk speaks at length about the company's current and future prospects. He talks about the company's MicroOS technology, quarterly results, recent trade show activity, and the emerging Internet music industry. He also outlines new potential markets for the company's handheld digital recording technology.
The following is a direct communication from e.Digital president and CEO Fred Falk:
Dear Shareholder:
On occasion I have addressed the shareholders of e.Digital to provide an update on our progress. Because many of you are new shareholders of the company, please allow me to summarize our recent progress and answer some of the questions we are fielding about e.Digital, its technology and its future.
CES (The Consumer Electronics Show) 2000
Because of the successful showing of our technology at the Consumer Electronics Show (CES) 2000 in Las Vegas earlier this month, we have received unprecedented interest from new OEMs (Original Equipment Manufacturers). At CES, our MicroOSTM-enabled Internet music player design was shown by IBM and Texas Instruments in their respective technology suites. Our technology news releases from CES received strong response from OEMs interested in e.Digital's technology and its importance in the rapidly emerging Internet music industry.
At CES, we met with companies in the home audio and the automotive audio industries who recognize that portable digital audio player technology is quickly merging into their markets. These companies see the advantages of our design and technology across multiple platforms. I anticipate new business opportunities will emerge for our Internet music player technology in these two large industries in addition to the portable player industry.
NASDAQ
Many of you have called or e-mailed us asking about the timing of our NASDAQ application. I am pleased to report that we believe e.Digital meets all the requirements for a NASDAQ listing and we are filing our NASDAQ application this week. A NASDAQ listing will be important for e.Digital to attract mainstream analyst coverage, as well as institutional investors beyond our current base. Please remember, the listing process and the timing of our planned listing is determined by NASDAQ.
Quarterly Results for the period ended December 31, 1999
Because our latest financials are important for our NASDAQ application, we have filed our Form 10-Q for the quarter ended December 31, 1999 today, ahead of our normal filing schedule. The complete report is on file with the SEC and can be viewed online at www.sec.gov by searching their EDGAR financial database for "e Digital". Revenues of $118,000 for the quarter reflect that some OEM shipments were temporarily delayed by industry-wide year-end shortages of flash memory and technical start-up issues by one of our contract manufacturers. We expect these conditions to be temporary and believe the December shortages will not materially impact planned total shipments for our fiscal year ending March 31, 2000. We continue to control our operating costs while maximizing the innovations from our technical team.
e.Digital's revenue results from a combination of fees from licensing, non-recurring engineering services, manufacturing services, warranty services, industrial design services, and royalty payments (per unit). The majority of our revenue stream will come from up front licensing fees and ongoing royalty payments from contracts with licensees like the one announced January 5 with Maycom. We believe this business model provides the highest return for our shareholders.
Strategic Relationships and Business Opportunities
Over the past two years we have announced strategic relationships with a number of industry leaders who share our vision of a new generation of powerful digital devices that incorporate, voice, music, data, images and full-motion video. We have forged and cultivated relationships with Lucent, IBM, Intel, Texas Instruments, Liquid Audio, Lydstrom, QDesign, SanDisk, Toshiba, Matsushita, RioPort and others. These relationships are opening multiple revenue opportunities for our technology.
Through our participation in the recording industry's Secure Digital Music Initiative (SDMI) over the last year, and our membership in IBM's VoiceTIMES alliance, e.Digital is helping build the foundation for the portable Internet devices industry. Different beneficial technologies are converging in ever-more-compact portable devices. Compatibility between future products is insured when standards are set and agreed to in the development stage. These portable devices will include Flash memory and IBM MicrodriveTM technology as the storage media. Our MicroOS file management system supplies the intelligence inside this new generation of digital products.
Through our patented MicroOS technology, we enable the convergence of multiple standards and technologies into small, powerful, hand-held devices. We offer our OEM customers and licensees a full menu of options. We work with--and plan to continue working with--the companies and organizations that set these standards.
We are also a full service OEM technology provider with the capability to incorporate our technology, perform the Industrial Design, and oversee manufacturing of the finished, OEM-branded product.
MicroOSTM
When flash memory became available for data storage several years ago, it was primarily used as backup memory. Data or code written to flash was WORM (write once, read many), difficult to edit, erase, or write data. In 1995, e.Digital was the first company to create and market a voice recorder using removable flash memory, a product that was later branded and sold by Sanyo. Out of these efforts, we developed a proprietary flash file management system named MicroOSTM that is the basis of our designs to this day. MicroOS is protected by four patents containing dozens of claims. All of these patents and their rights are the exclusive property of e.Digital.
MicroOS simplifies the design of products that use flash memory to store voice, image, text, or full-motion video files in portable devices. It also enables the portable devices we develop to easily exchange information with desktop computers, and through desktops, with intranets and the Internet. According to Semico Research, the global growth of flash memory devices will grow from sales of $4 billion in 1999 to sales of $8.5 billion in 2001.
MicroOS is a pure software flash file management system that is compact yet robust, and incorporates such features as:
Wear leveling - dictates use of cells within the flash to prevent uneven wear
Power management - important in portable, battery-powered devices
User interface - enables record, edit, insert, delete, play, fast forward and rewind functions with an intuitive command set
Bad block management - enables use of flash even if sectors become unusable
Portable device companies and consumer electronics companies recognize the importance of having an effective and robust flash file management system that enables all of these functions to take place in microseconds, while remaining transparent to the end user. MicroOS is proven effective and is extremely well suited for use in portable devices where physical space, cost, and memory are at a premium, but where maximum flexibility and functionality are a must.
Internet Music Industry
As projected by Forrester Research, 32 million portable Internet music player units will be sold by 2003.
Our licensing agreement with Maycom is especially significant, not only because they are the first licensee of our portable Internet music player design, but also because of their manufacturing reputation and capabilities. Maycom has the proven ability to get branded, quality products to the consumer market quickly. We expect this arrangement to produce licensing fees and ongoing royalties for e.Digital. Royalties from Maycom and future licensees of our portable Internet music player design are expected to range up to $10 per unit.
e.Digital's Internet music player design offers native multi-codec (coder/decoder) support that does not require transcoding music files. Transcoding is the practice of recompressing audio files through software to fit a single codec, resulting in reduced sound quality. Our designs have the ability to support several codecs natively, including Lucent's ePACTM, Dolby's AACTM, Microsoft's WMATM, MP3TM, and others, making sure each file is decoded directly, without copying or further compression. This is very important to artists and the recording industry who desire to have the best audio fidelity possible in these new second generation Internet music players. The January 29, 2000 issue of BILLBOARD magazine includes a special insert about Lucent Technologies and features e.Digital's multi-codec Internet music player design.
Because we work with the SDMI on supporting emerging technologies and standards, we have the opportunity to guide our OEMs in bringing to market second generation Internet music players. We have in place the industrial designs, partners, and manufacturing relationships to support secure desirable music content from the mainstream artists and record labels as soon as it is posted. Our SDMI participation is valuable as we are aware of the latest developments in digital rights management systems (DRMS), music codecs, and watermarking technology. Our MicroOS-enabled Internet music player design manages music files seamlessly and transparently, so that the consumer need not be concerned with codecs, etc.
Several recent events are significant to the development of secure music distribution over the Internet. The Time Warner/AOL merger represents major progress toward joining mainstream music content with secure Internet distribution. The Time Warner/EMI merger paves the way for established musicians and major record labels to distribute their content over the Internet for download. In an article entitled "A Little Net Music?", in the February 7 issue of Business Week Magazine, AOL President Robert Pittman predicts, "Just like the record industry got a shot in the arm when CDs came along, they'll get another shot in the arm with online music." With AOL's 22 million subscribers and Time Warner's 12 million cable subscribers and close to 30% ownership of the world record industry, we believe that between Warner/EMI and the other major record labels, the Internet music industry is poised for explosive growth. We have been working diligently to position our technology to bring OEM-branded players to market to support the Internet music revolution.
Voice and Full Motion Video Applications
e.Digital is also pursuing opportunities in the digital dictation arena. We are active in IBM's VoiceTIMES Initiative, whose goals include developing standards for the use of voice technology in a variety of products and platforms. We have built compatibility into our product designs not only for music but also for dictation and audio books.
As voice-to-text and text-to-voice technology improves we again state our vision that devices that talk and listen--rather than relying on typing, miniature keyboards, or pen-based systems--are the wave of the future.
With Apple Computers currently positioning the iMac as a movie machine, users are beginning to store video files in quantity on their PCs and Macs. We are developing reference designs of our technology to support downloaded video files in portable products. With the recent emergence of IBM's 340 MB MicrodriveTM, and increases in flash memory capacity, these types of applications are now possible in portable devices.
Emerging Standards
We are closely monitoring developments such as BluetoothTM, NTT DoCoMoTM, and other emerging protocols that give people wireless Internet access away from their desks. We welcome new technologies like Transmeta's recently introduced CrusoeTM Processor. We readily embrace these types of new standards, maintain contact with their developers and advocates, and strive to incorporate relevant technologies and standards into our designs for the benefit of our OEM customers and licensees.
As wireless phones add more features, that industry is beginning to include removable storage media. This represents a substantial opportunity for e.Digital to incorporate our technology into future generations of wireless phones.
Final Thoughts I believe that the current portable Internet products industry is at the same point in its growth as the wireless phone industry was approximately seven years ago. We are just beginning to see markets develop for portable products converging voice, music, video, and text data. Our goal is to make e.Digital a standard in millions of Internet-related digital products. The Internet-enabled handheld revolution has begun and e.Digital is positioned to participate in the rewards of this revolution this year and for years to come.
Sincerely,
Alfred H. Falk
President and CEO
yes, I would much rather listen to the Gospel according to Misha than any rationale comments about e.digital no matter the reason--Ooh I can feel the electricity in the air--
LAPD_IRON I'll keep my DivX
With the advent of DivX, there is no need for a DVD when you can get DVD quality in a full length file that will fit on a cd-r. I have 113 full length, high-resolution movies with Dolby Digital encoding in the audio and I paid nadda for any of them. I have a 21" Nokia monitor, Soundblaster Live Platinum sound card which is connected to 4 Harmon Kardon powered towers, a 10 and a 12 inch powered Infinity subs, and a cheesy Sony powered center channel. I put a people lounger sectional in my computer room and the only problem is my friends wanna watch movies when I wanna play Americas Army. There is no need to pay for something you cant keep when you can get the same thing for free and you can watch it over and over again.
by supabeast! on Monday November 11, @09:29AM (#4642343)
(User #84658 Info / http://www.supabeast.org/ / Last Journal: Thursday October 03, @04:20PM)
For $17.99 - $24.99 I can get most of these movies on DVD. The price of a DVD includes All the extra "features" and "enhancements" movie companies put on the disc are now gone, which should wipe out a good chunk of the cost right there. Take out another big chunk for the sound and video quality being generally crappy (A VHS rental tape would look/sound better.). This leaves me with a shitty copy of a movie that I could have rented for the same price.
Why not just charge a little more, sell a nice DiVX rip of the DVD, so that I can buy the movie, download it, burn it to a CD, and watch it all I want? The movie companies would make more money in the long run, because they no longer have to package and (physically.) distribute the movie. Of course, I might just serve the video up on Kaazaa, a private FTP, or an IRC bot, but someone else was already doing that when the movie was in the theatre!
I think it is nice that the movie companies are doing this, but they need to loosen up a little. Exisiting distribution paradigms are dying fast, the time has come to cut losses and just give consumers what the consumers are already getting for FREE, instead of selling a crappy version.
MPEG-4 format to boost digital video
By Evan Hansen, CNET News.com
Friday October 11,
An international standards team is close to approving a new compression format for digital video, promising improvements as well as a few uncertainties for emerging multimedia technology.
Known as H.264, among other designations, the new format is turning heads over claims that it can deliver DVD-quality broadcasts over the Internet using considerably less network resources than rivals.
Created in a unique partnership between US and European standards groups known as the Joint Video Team, the format, or codec, should be ratified as part of the MPEG-4 (Moving Picture Experts Group) multimedia standard by year's end, according to Robert Koenen, chairman of the MPEG Requirements Group.
"The codec is the result of technical advances in the arena of video compression," he said. "It's quite impressive, especially in light of the powerful hardware available today to run multimedia applications."
The main licensing clearinghouse for MPEG-4 standards, MPEG LA, has asked companies to submit for consideration any patents they believe cover the H.264 format by Friday. The early deadline aims to ensure that technology licensing for the format, which is hammered out separately from standards-setting, does not fall too far behind the ratification process, as has been the case in the past with MPEG-4.
Compressing bulky data files is key for delivery of video online and onto wireless devices--two markets long coveted by media companies but effectively ruled out in part because of cost and quality issues.
Few high-speed Internet access providers can guarantee data throughputs in excess of 500kbps, making the size of video files a top hindrance to Hollywood's Internet video distribution plans. H.264 goes a long way in solving the problem, having demonstrated DVD-quality broadcasts at bit rates slightly under 1mbps in tests. While that doesn't mean average consumers will begin seeing DVD-quality streaming over standard broadband connections anytime soon, it sets an important performance benchmark when compared with other formats.
The data savings realised in H.264 -- also known as MPEG-4 Part 10 -- could speed Internet and wireless video-on-demand services. It could prove valuable for cable operators that want to broadcast more channels over their pipes, and publishers seeking to cram more and higher-quality video files on digital media such as DVDs. Those industries, for now, typically use the older MPEG-2 video standard, which is up to four times bulkier.
H.264 also promises a 33 percent improvement over video formats currently implemented under MPEG-4.
While few doubt the power of the new format, its emergence could complicate the landscape for MPEG-4's video format offerings, which presently consist of two implementations: Simple Profile (SP) and Advanced Simple Profile (ASP).
Despite advantages over its predecessors in raw compression power, H.264 may not wind up as a simple replacement for SP and ASP. That's because H.264 is built on a new architecture that requires considerably more processing power than the generation of video compression formats now in use, making it less efficient in energy-sensitive applications that run on battery power, such as handheld devices and camcorders.
In addition, H.264 is not "backwards compatible," meaning software written for older MPEG-4 formats, including SP and ASP, will not automatically support it. Upgrading the older software to support the new format would be relatively painless, but could cause potential problems for consumers and companies forced to keep track of multiple formats.
H.264's pending approval could motivate some potential customers to wait until the new format is ratified and implemented before making the jump to MPEG-4, further delaying adoption of a standard that has been tied up in licensing troubles for years.
MPEG-4 setbacks
Although MPEG-4 was set as a standard years ago, still-unresolved licensing negotiations have held the technology back, leading to criticisms that its core technology, including its video formats, are out of date. Microsoft, for one, has consistently used that argument in refusing to endorse a standards-based approach in the development of its Windows Media multimedia technology.
"The video quality of MPEG-4 is far from state-of-the-art, to put it mildly," said Jonathan Usher, group product manager of Microsoft's Digital Media Division, claiming that Microsoft's recently released Windows Media Series 9 product is twice as efficient.
While Microsoft continues to back proprietary technology, it is not ignoring the new H.264 format, or codec, having won an appointment for one of its own as chairman of the codec's development oversight committee.
Usher tipped his hat to the compression power of H.264 as an "improvement" over ASP, but said the increased processing demands could make it less competitive in certain applications.
"It's about more than just the compression," he said. "It's about balancing compression with demands placed on the chip to crunch code."
Kevin Oerton, vice president of marketing at Waterloo, Ontario-based MPEG-4 software developer VideoLocus, countered that the H.264 format is still in development but appears to have struck a workable balance between compression and computational demands on the chip.
"H.264 requires about three to four times the computing horsepower of MPEG-2," he said. "But MPEG-2 is now trivial for most chips. All of the video standards have been defined in terms of Moore's Law. H.264 lives up from a semiconductor cost-analysis perspective."
Moore's Law, set by Intel co-founder Gordon Moore in 1965, predicted that computing power would effectively double every 18 months.
Like its predecessors MPEG-1 and MPEG-2, the standard includes a broad range of audio and video technologies that allow a wide variety of different applications, online and offline. The best-known feature of those previous generations was the MP3 (or MPEG-1, Layer 3) music technology, which accidentally became a household name because of the spectacular success of the Napster music-swapping service.
MPEG-2 provided the technical standard for most digital cable set-top boxes and for DVDs. The numbers then skip--there is no MPEG-3 standard.
MPEG-4, ratified as a standard by the Moving Picture Experts Group in 1999, has enough different pieces to keep video-technology junkies happy for years. It is able, for example, to crunch massive video files into pieces small enough to send over mobile networks. Backers tout it as one potential "killer app" for the fast mobile phone networks that will be built over the next few years and will desperately need new applications that can generate revenue.
It also includes file formats and other elements aimed at making video function almost like a Web page, allowing people to interact with the picture on the screen or to manipulate individual elements in real time. Features envisioned include the addition of e-commerce capabilities, allowing viewers to click on an item in a movie to call up product and ordering information.
Compression technology, which is just one element in this mix, is nevertheless key to putting the standard to use in marketable products. Video compression essentially squeezes the size of a file by pulling out data that is not likely to be noticed by the viewer when the clip is played.
The ability to give video itself the kind of interactivity that only Web sites and video games now enjoy has ignited the imaginations of advertisers and some Hollywood studios, and helped drive broad support from digital video developers.
Relative newcomers such as Envivio and iVast have released products based on MPEG-4, while Apple Computer has made it the cornerstone of its latest generation QuickTime 6 multimedia software.
RealNetworks has also agreed to support the format, offering an MPEG-4 plug-in from Envivio while it works to create native support in a pending version of its technology.
Licensing protests
The growing endorsement of the standard was almost derailed earlier this year when MPEG LA proposed preliminary licensing terms for the technology after years of negotiations with rights holders. The agreement sparked widespread protest for its terms, which included a hotly contested per minute coding fee.
The licensing terms were ultimately revised, but the experience has done little to inspire confidence that the group will be able to avoid future licensing impasses as the standard evolves and adopts new technology such as H.264.
Lawrence Horn, MPEG LA's vice president of licensing and business development, said the group has learned from the past and hopes to make the next licensing rounds as painless as possible.
"Although some people may criticize the process for not moving fast enough, we plan to be more proactive," he said, noting that the group has already begun the process of vetting potential patents for H.264 in advance of its expected ratification this year.
Horn said the group does not disclose companies or patents that have been submitted for consideration in the licensing pool.
Jonathan Fram, chief executive of MPEG-4 software developer Envivio, said his company has seen no sign that big potential MPEG-4 customers are staying on the sidelines because of the pending H.264 upgrade. He said the company has already signed up some 50 customers, including the National Film Board of Canada, although he said the market is more receptive in Asia and Europe than in North America, where cable companies heavily invested in MPEG-2 technology are dominant.
He said telecom companies hoping to compete with cable and satellite companies in video-on-demand delivery are showing strong interest in MPEG-4 now.
"No one is waiting," he said. "We can enable (telecom companies) to compete today."
Microsoft for now appears to be a bigger threat to MPEG-4 in the marketplace than cannibalization from within through H.264.
On Wednesday, the software giant's Korean subsidiary announced a deal to provide Windows Media 9 to Korea Telecom, South Korea's biggest telephone company, to support video-on-demand and wireless movie delivery to some 4.4 million customers.
If that's a sign of things to come, MPEG-4 buyers may not have the luxury of waiting until the new codec arrives.
"It's like buying a computer," said MPEG's Koenen. "You can always wait until something better comes along...but MPEG-4 is already a great proposition today."
MovieLink expected to use MPEG-4
By Stefanie Olsen
Staff Writer
April 8, 2002, 6:40 PM PT
LAS VEGAS--MovieLink, a joint venture among five major movie studios, is expected to launch its Internet video-on-demand service later this year using MPEG-4 technology, a studio executive familiar with the plans said Monday.
Peter Marx, vice president of emerging technologies with Vivendi Universal, told an audience at the National Association of Broadcasters that MovieLink will use MPEG-4, but later clarified that the service has not yet committed to just one format. The remarks are among the first public hints regarding the underlying technology MovieLink plans to employ.
"This will be the first time you can get a high-quality movie download," said Marx, contrasting MovieLink with existing Internet video services such as Intertainer that use streaming technology. He added that MovieLink will allow each studio to set prices for its movies separately, rather than dictate prices across the board.
MovieLink's backing would be a major coup for MPEG-4, which has been proposed as a new standard for digital video. The format offers new interactive features as well as fourfold improvements in compression over the current MPEG-2 standard. It has already won endorsements from a number of digital media heavyweights, including Apple Computer and Sun Microsystems. But it has also become mired in disputes over proposed licensing terms.
On the Internet, MPEG-4 faces competition from proprietary formats from companies such as RealNetworks and Microsoft.
MovieLink is backed by Sony Pictures, Viacom's Paramount, Metro-Goldwyn-Mayer, AOL Time Warner's Warner Bros. and Vivendi Universal. Its service is expected to launch in the latter half of the year, although a date has yet to be set. A rival service from Walt Disney and News Corp.'s 20th Century Fox called Movies.com is also in the works.
Naysayers contend that the MovieLink technology--which will deliver movies over the Internet to a PC--cannot compete with television and cable as the prime entertainment pipes into the home. Announced last year under the name MovieFly, MovieLink has proceeded slowly. It waited until January, for example, to appoint its first chief executive, industry veteran Jim Ramo.
Some analysts have suggested that the movie studios may be interested in setting up online distribution partly to strengthen their hand in high-stakes negotiations with cable companies, which are in the midst of developing on-demand products.
So far, the online entertainment experiment has resulted only in high-profile commercial flops, such as the collapse of the Digital Entertainment Network, Pseudo.com and AOL Time Warner's Entertaindom.
But the studios say they are eager to move quickly to the Web, in part to avoid the digital disaster that has struck the recording industry. A lack of consumer-ready Internet services may have contributed to what some now describe as an entrenched culture of online music piracy.
Long sheltered by a technology gap that made video-on-demand impractical, the studios increasingly face a race to market with cable operators and even Internet-based rivals.
Earlier this year, Taiwan-based site Movies88.com briefly offered Internet video-on-demand services charging consumers $1 for each movie. The site was quickly shut down by the threat of legal action, but it served as a proof of concept that VOD sites could soon populate the Web.
MovieLink does have a few advantages in its court. For example, it already owns the rights to the film catalog of five of Hollywood's biggest studios, bucking a general trend of reluctance among copyright holders to open their content to online distribution out of fear of piracy.
Marx's remarks came at an NAB panel titled "Convergence: New Economy Distribution Business Models for the Entertainment Industry."
PortalPlayer, Inc. supplies consumer electronics manufacturers with complete platform solutions for open and secure delivery and management of digital media. The company is developing and marketing advanced systems for digital audio recording and playback, using MP3 and other popular digital compression technologies, tightly integrated with electronic commerce and digital rights management technologies. PortalPlayer's strategy is to provide a complete product platform and supporting infrastructure - including web-based applications, PC media management software, firmware, and semiconductors - enabling its customers to quickly bring innovative new devices to market.
Products for the Digital Media Revolution
The delivery of digital content across the World Wide Web is revolutionizing the relationship between content providers and consumers. Electronic commerce gives artists and producers the ability to deliver their work immediately to a broad listener base. But the significant challenge of combating piracy by honoring the usage rules associated with the digital media must be addressed to realize the full potential of downloadable and streaming music.
The challenges faced by consumer electronics manufacturers, content providers and eCommerce companies are compounded by the difficulty of defining standards and technology solutions that address the concerns of all participants in the new digital media industry. PortalPlayer cuts through the current marketplace chaos through a comprehensive, "United Nations" approach. The company provides its customers with a complete set of technologies that can be implemented across a variety of products. This includes support for different Digital Rights Management (DRM), audio compression, digital "wrappers," and multiple storage media, such as Memory Stick™ and other types of secure card technology. This provides the company's partners with the flexibility to achieve product differentiation across families of highly scalable digital media platforms.
PortalPlayer is the first company to develop and market fully integrated hardware/software platforms to consumer electronics vendors that are manufacturing digital music enabled products. Last year (2000), PortalPlayer brought to market a series of digital audio platforms and services for use in portable and home electronics systems. These platform and media infrastructure solutions support a full range of open and secure digital media applications - from ripping a CD track into an MP3 format, to purchasing a coded and encrypted, digital rights managed song. Supported by licensing agreements and strategic partnerships with leaders in content distribution, DRM, and secure storage media, PortalPlayer products will enable the next generation of Web-based consumer entertainment appliances.
Realizing the Promise
MP3 (or MPEG1 layer 3) is a technical format that has become synonymous with digitized music distributed on the Internet. It is actually one of many formats, each of which uses sophisticated compression algorithms to make storage of digital recordings practical, without sacrificing the audio quality of the original. Using formats like MP3, a high-quality stereo recording of a three-minute song that typically would take up about 30 MB of disk space can be captured in a near-CD quality file requiring about 3 MB of storage: a 10:1 compression ratio.
Clearly, the combination of compression and access to the Internet's digital pipeline dramatically reduces the time and the cost of distributing music to consumers. Recording artists and labels gain the freedom to market and distribute material in any manner they please. However, many artists are concerned about the price of that freedom. Securing payment and ensuring copyright protection in the digital age are critical issues in the digital entertainment revolution.
PortalPlayer is a member of the Secure Digital Music Initiative (SDMI), an industry group defining the requirements for digital music security. All PortalPlayer products conform to SDMI specifications, allowing consumers to record and play digital content anywhere and everywhere they choose, while ensuring control of the copyright and providing specific digital rights associated with the music, such as play-once, 30-day play, and unlimited play.
Building the Next Generation of Digital Audio
The best known digital audio products today are small players that allow consumers to listen to audio files recorded, compressed and then downloaded from a consumer's desktop computer. First introduced in 1998, these portable players have captured the imagination of technically savvy consumers, creating a market of millions of units per year. Today, the consumer electronics industry has recognized that these portable players are just the tip of the iceberg.
As more people gain access to high-bandwidth Internet connections, market demand for products that support digital music will grow exponentially. This growth will be based on two closely related applications, downloadable audio for personal use, and streaming audio to deliver digital radio broadcasts via the Internet. To support both applications, familiar home and car audio systems will feature digital audio capability, and entirely new classes of products that use the technology will soon begin to reach the market.
PortalPlayer provides its OEM customers with the complete product infrastructure required to deliver exciting new products for the digital media revolution. These products include semiconductor chipsets, based on the PortalPlayer SuperIntegration™ Chip Architecture, upgradable firmware, application software to manage the capture, compression and storage of content, and server-based application software for Internet-delivery mechanisms. The company has an extensive network of alliances and licensing arrangements to ensure that all required technologies are delivered to the consumer electronics manufacturer in one comprehensive package.
It is inevitable that the Internet will change the economics of music and, ultimately, all multimedia distribution. PortalPlayer will play a role in this revolution, providing complete solutions - from chips to digital media management software - that enhance the digital media experience.
Company Information
Founded in May 1999, PortalPlayer is headquartered in Santa Clara, California, with major offices in Seattle, Washington, Charlotte, North Carolina and Hyderabad, India. The company has rapidly grown to more than 150 employees worldwide. PortalPlayer has received three rounds of venture capital funding, with investments from CIBC World Markets, Earthlink, FlatIron Partners, J.P. Morgan, LSI Logic, Morgan Stanley Dean Witter, MP3.com, TechFund, Vulcan Ventures, and individual investors.
PortalPlayer's management team includes leaders in technology and electronic systems development from around the world. Senior managers include:
John Mallard, President and CEO
Dennis Mahoney, Vice President Finance & Chief Financial Officer
Subir Ghosh, Chief Technical Officer
Michael Maia, Vice President, Marketing
J. A. Chowdary, President & Managing Director, PortalPlayer Pvt., Ltd.
Sanjeev Kumar, Vice President, Software Engineering
Jeff Hawkey, Vice President, Hardware Engineering
George Fang, Vice President, Worldwide Sales
Philips and Sony Lead Acquisition of InterTrust
Wednesday November 13, 8:07 am ET
AMSTERDAM, Netherlands and NEW YORK, Nov. 13 /PRNewswire-FirstCall/ -- Fidelio Acquisition Company, LLC, a company formed by Sony Corporation of America, a subsidiary of Sony Corporation (NYSE: SNE - News), Royal Philips Electronics (NYSE: PHG; AEX: PHI) and certain other investors, has executed a definitive agreement to acquire InterTrust Technologies Corporation (Nasdaq: ITRU - News). As a result of the transaction, Fidelio will acquire all of the outstanding common stock of InterTrust for approximately $453 million on a fully diluted basis or $4.25 per share. The most important objective of the transaction is to enable secure distribution of digital content by providing wider access to InterTrust's key Digital Rights Management (DRM) intellectual property on a fair and reasonable basis.
InterTrust is a leading holder of intellectual property in DRM. The company holds 26 U.S. patents and has approximately 85 patent applications pending worldwide. InterTrust's patent portfolio covers software and hardware technologies that can be implemented in a broad range of products that use DRM, including digital media platforms, web services and enterprise infrastructure.
InterTrust's Board of Directors has unanimously approved the acquisition and has determined that the transaction is advisable and in the best interest of its shareholders. All InterTrust board members owning shares including Victor Shear, Founder and Chairman of the board of directors, have agreed to tender all their shares of InterTrust common stock, representing approximately 20% of the outstanding common stock, in favor of the transaction. The acquisition, which is subject to customary closing conditions, including regulatory approvals, is expected to close in early 2003.
"Throughout Sony on a global scale, we operate with a keen awareness that the future growth of the consumer electronics, computer and entertainment industries will be heavily influenced by the ability to transmit digital content in a secure environment," said Nobuyuki Idei, Chairman and Chief Executive Officer of Sony Corporation. "This acquisition will significantly accelerate the ability to ensure secure delivery of digital content. This in turn will enable the development of many exciting new services for consumers and businesses."
"Philips is focused on the right of consumers to fairly access and enjoy digital content," said Gerard Kleisterlee, Philips' President and CEO. "Wider access to InterTrust's DRM Intellectual Property will allow both consumers and content providers to securely access and distribute digital content with their preferred devices. In doing so, barriers to digital content access can be removed to deliver enhanced consumer choice via new services. The deal will lead to a broad platform of DRM IP and new Philips products with integrated DRM technology. DRM is a key element towards a genuine digital revolution, and will be an important driver to reinvigorating the technology sector."
"Sony is committed to creating an environment where digital content can be securely distributed and enjoyed," said Robert Wiesenthal, Executive Vice President and Chief Strategy Officer of Sony Broadband Entertainment, Sony Corporation of America. "Through this transaction InterTrust's important DRM patents will be more widely available on a fair and reasonable basis."
"Philips is convinced that DRM technologies will be tremendously valuable in enabling the secure distribution of digital content, and in turn will facilitate a larger offering of digital content to consumers," said Ruud Peters, Executive Vice President and Chief Executive Officer of Philips' Intellectual Property & Standards. "Philips will continue to play a leading role in DRM."
About Sony Corporation of America
Sony Corporation of America, based in New York City, is the U.S. subsidiary of Sony Corporation, headquartered in Tokyo. Sony is a leading manufacturer of audio, video, communications and information technology products for the consumer and professional markets. Its music, motion picture, television, computer entertainment, and online businesses make Sony one of the most comprehensive entertainment companies in the world. Sony's principal U.S. businesses include Sony Electronics Inc., Sony Pictures Entertainment, Sony Music Entertainment Inc., and Sony Computer Entertainment America Inc. Sony recorded consolidated annual sales of over $56.9 billion for the fiscal year ended March 31, 2002, and it employs 168,000 people worldwide. Sony Corporation of America recorded over $18.5 billion in sales in the U.S. for the fiscal year ended March 31, 2002. Sony Corporation of America's homepage is: http://www.sony.com/SCA/index.html
About Royal Philips Electronics
Royal Philips Electronics of the Netherlands is one of the world's biggest electronics companies and Europe's largest, with sales of EUR 32.3 billion in 2001. It is a global leader in color television sets, lighting, electric shavers, medical diagnostic imaging and patient monitoring, and one-chip TV products. Its 184,000 employees in more than 60 countries are active in the areas of lighting, consumer electronics, domestic appliances, semiconductors, and medical systems. Philips is quoted on the NYSE (symbol: PHG), London, Frankfurt, Amsterdam and other stock exchanges. News from Philips is located at http://www.philips.com/newscenter.
May 10, 2000
e.Digital and InterTrust Announce Licensing Agreement to Integrate InterTrust's Digital Rights Management Technology into e.Digital's Portable Music Player Designs
Apr 25, 2000
PortalPlayer and InterTrust Announce Strategic Relationship to Provide InterTrust Digital Rights Management in Next Generation Digital Audio Platforms
A new agreement with PortalPlayer also was announced. PortalPlayer supplies consumer electronics manufacturers with complete chip solutions for open and secure delivery and management of digital media. PortalPlayer develops and markets advanced system on chip solutions for digital audio recording and playback using MP3 and other popular digital compression technologies tightly integrated with electronic commerce and digital rights management technologies.
Falk said, "As part of the agreement, PortalPlayer will refer pre-qualified customers to us for engineering services and product development using the PortalPlayer IP. This partnership opens the door for revenue producing opportunities, both from non-recurring engineering (NRE) fees and royalties as well as revenue sharing from PortalPlayer. It also provides us with another opportunity to incorporate new technologies into useful applications and attractive products for OEM customers, which in turn should generate additional OEM interest."
PortalPlayer Licenses ARM Technology For Digital Audio Applications - 5/23/2002
PortalPlayer has licensed the ARM7TDMI core for implementation in digital audio encode and playback devices. ARM core-based products from PortalPlayer are used by original equipment manufacturers (OEMs) and original device manufacturers (ODMs) to develop complete digital audio product families, from player-only portable devices to digital audio-enabled encoding and playback systems for the pocket, home and car.
PortalPlayer's complete platform solutions include a highly integrated System-on-Chip (SoC) controller, firmware, digital media manager application software and reference designs to speed system integration. PortalPlayer's SuperIntegration SoC controllers, based on the ARM7TDMI processor core, provide a programmable and upgradeable solution for digital audio playback and recording applications with the performance headroom needed to accommodate the evolving requirements of the digital audio entertainment market. Coupled with PortalPlayer's extensive firmware library, system designers can enable the set of audio encoders, decoders, digital rights management and audio effects processing features that exactly fit their target application. This flexibility and extensibility gives consumer product OEMs a significant time-to-market advantage.
The ARM7TDMI core, a 32-bit embedded RISC processor, is optimized to provide the best combination of performance, power and area characteristics. The ARM7TDMI core enables system designers to build embedded devices that meet the small size, low power and high performance requirements of applications such as wireless handsets and personal audio accessories.
Steve Jobs is recognizably the top cheerleader for Apple's products. And the inventor of such hyperbole as "insanely great" has not abandoned that characteristic for the company's iPod MP3 player.
"With iPod, Apple has invented a whole new category of digital music player that lets you put your entire music collection in your pocket and listen to it wherever you go," the Apple CEO said when he introduced the product in October 2001. "With iPod, listening to music will never be the same again."
Although no one could accuse Apple, let alone Jobs, of being shy about product promotion, it's a different story when it comes to its engineering and building processes. The company has always been tighter lipped than the Pentagon when it comes to releasing design chain details.
But that hasn't prevented some companies from satisfying their curiosity about what's inside the advanced MP3 player. Some serious reverse engineering and discussion within the electronics industry unearthed unusual details of Apple's development process.
It turns out that much of the underlying iPod design was performed by outside companies. The Cupertino folk haven't given up on their heritage of design excellence--they're just bowing to some inevitable directions in consumer electronics by borrowing from established experts linked together for what may be the first design chain for the iPod.
A Unique Design Chain Approach
Realizing that the MP3 market was still in its infancy, Apple developed a layered design chain tuned for an early-stage market to create the iPod. Even more unusual for Apple, it relied on a platform and reference design created by a third party, PortalPlayer, of Santa Clara, Calif. Founded in 1999, PortalPlayer has a stellar cast of Silicon Valley executives and investors, including renowned venture capitalist Gordon Campbell.
PortalPlayer had developed a base platform for a variety of audio systems, including portable digital music devices, general audio systems and streaming audio receivers. It appears that Apple picked PortalPlayer because its design expertise yielded the highest quality of sound, according to industry sources.
Because of the unusually restrictive nondisclosure agreements in place among Apple, PortalPlayer and other members of the sub-design chain, key officials were not able to directly comment on their work with Apple. However, some members of the subchain provided Electronics Design Chain Magazine with a glimpse inside the iPod core.
Once Apple and PortalPlayer became design chain partners, PortalPlayer then selected other design chain members and managed the design process. Four key criteria were behind the selection of other members of the design chain, none unusual for a consumer electronics product:
highest quality sound
off-the-shelf components
cost
time to market
Under the Hood
The trail to find iPod's design chain starts with some reverse engineering of the device by Portelligent Inc., an Austin, Texas, firm providing product and technology intelligence for consumer electronics companies.
"First and foremost, the product was elegantly designed in classic Apple fashion," says David Carey, president of Portelligent. "They did product design from the outside in." Carey says the company had a vision of what the player should be and what it should look like. The subsequent design parameters were dictated by its appearance and form factor.
That outside-in perspective helped determine a number of the components, including the planar lithium battery from Sony and the 1.8-inch Toshiba hard drive, which is the only company presently manufacturing that form factor. The essential units--battery, hard drive and circuit board--are layered, one atop the next.
"It was very thoughtful layering and nesting of the components mechanically," Carey adds. "There's not a lot of unused volume inside [the iPod]."
The rest of the device uses a dedicated MP3 decoder and controller chip from PortalPlayer, a Wolfson Microelectronics Ltd. stereo digital-to-analog converter, a flash memory chip from Sharp Electronics Corp., a Texas Instruments 1394 firewire interface controller, and a power management and battery charging IC from Linear Technologies Inc.
What Apple conspicuously did not do is use an ASIC or other custom chip to integrate all the functions it needed onto one piece of silicon, which would have presumably saved space and battery life.
"Like with many of the systems being done today, it has time-to-market and risk-management issues," Carey notes. When a company moves to a custom system-on-chip, "you run the risk of a design flaw, and it's far cheaper to buy the best [components]."
PortalPlayer's vice president for marketing, Michael Maia, can't publicly disclose why Apple and PortalPlayer decided not to use an ASIC or discuss other aspects of the iPod design, but his description of a generic systems customer in the marketplace could be considered applicable to Apple.
"There's a range of customers out there, from an OEM that does all its own design internally to the right-hand side that do all their design through ODMs [original design manufacturers] in Asia," Maia says. "There are guys in the middle who may specify the product down to the semiconductor level and then have the ODM build it."
PortalPlayer decided to develop a reference model for a high-quality portable audio player based on a standard product design strategy. It developed a series of designs that enabled customization, and at the same time provided a stable environment, thereby eliminating the need to start design from scratch.
PortalPlayer's Winning Relationships
Part of PortalPlayer's design chain strategy is to offer development tools as well as to form relationships with third parties that offer other capabilities. The result is a series of reference designs for different applications along with roadmaps for current and future application capabilities.
"Customers can get access to that, and in that, we work very closely with select partners that we have carefully chosen for a host of reasons," says Maia. "Wolfson [for example] has what our minds and ears tell us are excellent quality codecs."
In addition, "Wolfson has excellent quality technology and a good price point," he notes. As a result, PortalPlayer and Wolfson Microelectronics became design chain partners for the audio player reference design.
The design process was a matter of a few months of iterative loops. PortalPlayer would use the Wolfson silicon in a prototype circuit, then go back to the Edinburgh, United Kingdom, company with any problems. "Once you've tried the device, we can hone in on the issues," says Julian Hayes, vice president of marketing at Wolfson. "We're fairly expert at solving problems these days."
PortalPlayer selected Linear Technologies of New York City for the power management because its technology is leading edge and also because there were preexisting ties between upper management of the two companies.
But PortalPlayer had to develop a working relationship with TI, a competitor in other areas, because Apple insisted that the Dallas-based company provide the 1394 chip.
The flash memory from Sharp, of Mahwah, N.J., shows a different relationship, as PortalPlayer considers itself "agnostic" when it comes to memory chip vendors.
Risk Reduction
Using a platform like PortalPlayer's, in which systems are designed and chip designs verified, offers fewer worries to a company that is in a rush to market. With the design chain approach it has taken, Apple avoided the technical challenges of integrating DRAM and logic processes.
"To do everything in one part is a complex, risky and potentially costly alternative to integration of available components at the electronic assembly level," Carey says. Certainly, custom work can offer cost reductions in large volume, but there are two countering considerations for a company like Apple.
One would be volume, according to Mike Paxton, senior analyst of converging markets and technologies at Scottsdale, Ariz.-based In-Stat/MDR.
"If you listen to Steve Jobs, he said they sold 125,000 in the fourth quarter [of 2001], which is impressive," given that the iPod only began to ship in October, Paxton says. By checking that figure against discussions with component suppliers, he decided that it was probably accurate. But while such sales, if kept constant for an entire year, would make Apple the second- or third-largest MP3 player manufacturer worldwide, the volume is small compared to more common uses of custom chips.
In addition, the IC costs for a device like the iPod won't dominate Apple's bill of materials. Carey estimates that the hard drive is at least 50 percent of the expense, so the advantage of bringing design in house or working with a single chip vendor instead of a more extensive design chain using a variety of outside suppliers is reduced.
The other consideration is the typical trade-off when doing custom work: flexibility in design and vendor selection versus the potentially low volumes and relatively high unit prices.
All for One
Apple's design chain relied on off-the-shelf components integrated in an elegant way. Even critical pieces such as the digital-to-analog converters (DAC) are off-the-shelf discrete devices. The DAC "is a standard component that was designed for Wolfson for portable music players," says Hayes. The Toshiba drive is another standard part.
"With iPod, Apple has invented a whole new category of digital music player that lets you put your entire music collection in your pocket and listen to it wherever you go." Steve Jobs, Apple Computer
Where the value rapidly accumulates is in the intelligent coordination among the vendors and integration of their products. The combination and linkage of the DAC to other components is where the PortalPlayer-Wolfson design chain provided real worth. "There's a lot of embedded stuff" inside the design, says Hayes. "It has some fairly complex DSP algorithms to enable the features of the products that Apple may or may not be taking advantage of."
Apple and PortalPlayer also relied on other key design chain partners. While the Toshiba drive, for example, uses a standard AT interface, the connector is a custom design. And it appears Apple relied on Toshiba for guidance about heat dissipation and shock tolerance.
The nondisclosure agreement between Apple and Toshiba precludes the disk drive maker from describing its design chain role. However, a source close to the design chain says Toshiba did contribute to the overall design.
Don't Count Apple Out
It would be a huge mistake to assume that all the design work happened elsewhere and that Apple had no substantial input. A reference design is far from having a finished product, even electronically. The ultimate circuit design was still Apple's, as far as any outsider can tell.
"The value is putting it all together and optimizing the design to eek out the best performance, get the best power utilization, the best audio performance," says Wolfson's Hayes. "That is not a trivial task by any means. Sometimes it's very difficult in a cost constrained [situation] and small form factor to get the performance." Factors that can influence the final sound can be the circuit board layout, the circuit design itself, the handling of the power supply and the overall implementation.
"It's a combination of all those things that create that high-quality performance," Hayes adds.
In his opinion, and in that of many reviewers, Apple hit a home run. "Certainly I think it's about the best audio quality we've come across for that type of product in the marketplace in terms of intrinsic audio quality and delivered audio quality," Hayes says.
Then there is the user interface design, which has received strong reviews for the implementation of a 1394 interface for music downloads so fast that it could make your head spin. And it's easy to use.
"It's a fantastic user interface," emphasizes Hayes. "It's by far and away the best user interface of any product of this type. It sets it apart from any of the other comparable MP3 players of its ilk."
Choosing a development platform allowed Apple to focus on its true genius for form factors and user interfaces. "Those two are Apple's strengths," says Vinay Asgekar, director of research for semiconductor and high tech at Boston-based AMR Research. "Apple knows how to make a high-tech product consumer friendly. That has been its core strength from the introduction of the Apple Macintosh. That could be its strategy for iPod."
Troubled Waters
With all the positives, is there a down side?
"Managing that activity [among multiple partners] becomes extremely difficult," says Asgekar, as projects become harder to coordinate. "You have to make sure your supplier's development and marketing roadmaps match up with your development and marketing roadmaps."
While PortalPlayer's Maia is restricted from discussing how Apple managed its iPod design chain, he was able to describe how systems houses in general work with the audio subsection designer. A drawback for Apple, and other systems houses relying on reference designs, is protection of its product and market space. When fundamental parts of the design are done by others, there is an almost certainty that competitors will eventually ship products using the same basic technology. Obviously, a company like PortalPlayer makes the same silicon, firmware, tools and reference designs available to many other companies.
While PortalPlayer provides designs on an exclusive basis for some customers, Maia hints that the guts of the iPod may appear in other devices soon. So although Apple has been the first of PortalPlayer's customers to ship products using the platform, many more are slated to introduce their own offerings by this summer.
No doubt subsequent versions of the iPod will yield a revised design chain as different components and optimizations are discovered and needed. But for now, Apple's first design chain strategy and product have been a success.
ABOUT THE AUTHOR
Erik Sherman writes about business and technology for such publications as Newsweek, US News and Technology Review. Reach him at esherman@designchain.com.
Density destiny
CD-based audio players will take compressed audio beyond early-adopter audiences and into the consumer-electronics mainstream.
Brian Hager, Portable Audio Product Manager, Cirrus Logic -- CommVerge, 11/1/2002
Consumer demand for compressed-audio players has sparked a controversy over which type of portable player will dominate the marketplace. While there is sustainable market demand for a variety of formats, it's clear that the CD will win out over flash memory and hard disk drives (HDDs) as the high-volume storage medium of choice.
The CD is one of the most popular and proven consumer-electronics platforms of all time, thanks to its versatility and ease of use. CD-based compressed-audio devices can play "old" CDs as well as MP3/WMA files. In fact, CD/MP3 players can even play CD-Audio and MP3 files from the same disc.
Complementing this versatility is the CD's ease-of-use. Most music fans don't want to mess around with USB connections--they want to play their music using the same format that has served them well since the mid-1980s. And as CD burners become increasingly popular, the path is further cleared for the mainstream acceptance of CD-based players.
Instead of the one to two hours of music that typical flash-based players hold, CD-based MP3/WMA players can hold up to 22 hours of near-CD-quality music on a single disc. When using a 650-Mbyte CD-R and encoding audio files at 64 kbits/sec in the WMA format, one CD can hold almost an entire day's worth of music. Consumers can keep 20 albums on a single, lightweight CD that can be quickly and easily navigated via easy-to-use displays. In comparison, a flash player with 128 Mbytes of storage provides about five hours of music.
Among the flash, CD, and hard-disk formats, CD is by far the most cost effective, at around 20 cents for a blank, 650-Mbyte CD-R. Flash memory and HDDs cannot offer such high levels of storage capacity at the same low prices, and this translates into higher retail prices for players--as much as $500 in some cases.
In addition to the low cost of CD media, CD hardware is mature and therefore inexpensive. Portable CD players today retail for as little as $20, and the newest CD/MP3 players are as inexpensive as $49 in some cases. Compare this to the cost of flash-based players (typically more than $120) or HDD devices (typically retailing for between $200 and $500).
As costs for digital audio decoders continue to decline, and as the cost delta between portable CD players and CD-based MP3/WMA players shrinks, compressed audio will become just another standard feature of portable CD players, as well as of mainstream CD players.
In the end, consumers will determine the outcome of this controversy. HDD- and flash-based players provide benefits for some people. But the clear, compelling appeal of CD-based players will make the CD the dominant format for portable audio. And in the process, this class of audio player will take compressed audio beyond early-adopter audiences and into the consumer-electronics mainstream.
Super stores
Unmatched by any other portable storage format on the market, hard disk drives enable many users to carry their entire audio collections with them.
John Osterhout, Business Line Manager, Microdrive Products, IBM Storage Technology Division -- CommVerge, 11/1/2002
He didn't know it then, but the work that IBM innovator Reynold B Johnson began 50 years ago--on what would later become the first hard disk drive (HDD)--is today adding fuel to the analog-to-digital convergence in consumer-electronics products.
Half a century after its inception, the HDD is conferring its benefits on digital-audio players, where the value lies in users' ability to carry large amounts of audio content. Hard disks bring together the attributes that users of digital-audio players look for: high capacity, portability, and versatility.
For audio aficionados, 1.8- and 2.5-inch HDDs are finding their way into digital-audio players, offering up to 40 Gbytes of storage. At these capacities--unmatched by any other portable storage format on the market--HDDs enable many users to carry their entire audio collections with them. Hard disks also serve where portability is the most important factor; IBM's Microdrive, for example, offers 1 Gbyte of capacity, weighs less than a double-A battery, and fits into an industry-standard CompactFlash Type II slot.
Perhaps the most attractive feature of the HDD, beyond its capacity leadership, is its inherent cost advantage. The per-megabyte cost for hard-disk storage offers significantly better price-efficiency than competing flash-memory products. For example, you can buy a Creative Labs MP3 player with 128 Mbytes of flash memory for about $149. Or you can buy a 20-Gbyte, HDD-based player from the same manufacturer for $399. That's more than 150 times the capacity for 2.7 times the price. This cost benefit also makes hard disk drives attractive for product designers trying to capture the high-end market.
When compared with CD-based audio storage, HDDs boast a number of fundamental advantages beyond their sheer capacity. Hard disks hold a size advantage over CDs, not simply in terms of the actual storage device, but in how its size impacts the design of the audio system. This factor is critical, since the most popular MP3 players fit easily into a pocket or clip to a lapel.
In addition, hard disk drives offer a time-saving advantage over CDs in the data-writing process, allowing for the download of hours of music in just minutes. And since recording on a hard drive does not require a separate CD burner, new music can be loaded on the device from many sources. Finally, HDD-based devices are more adaptable to storing multiple data types, including MP3 files, traditional CD formats, video, and digital images.
The appeal of the hard disk drive is enhanced not only by its high capacity, small size, and portability, but also by its unmatched versatility. For instance, NASA recently used IBM Microdrives to store data-intensive images collected on Atlantis and Discovery shuttle missions. If HDDs can be trusted to capture NASA's history-making journeys, imagine what they can do to preserve your prized digital audio library.
Solid performer
With its solid-state design, flash memory leaves the other digital audio alternatives--CDs and hard-disk drives--in the dust.
Hank Lai, Senior Technical Marketing Engineer, Samsung Semiconductor -- CommVerge, 11/1/2002
Flash memory, with its small form-factor, high performance, and solid-state design, is unsurpassed as the storage medium of choice for digital audio players. This is especially true in the case of portable MP3 players, where consumers demand smaller, lighter designs with increased memory capacity.
Flash memory is unrivaled for its ability to be seamlessly integrated into a variety of wireless handheld devices. A single NAND-based flash memory device measures barely one inch square, is approximately 1/32 of an inch thick, and is almost weightless. With flash, designers can create an MP3 player barely larger than the memory device itself. This small form factor also makes flash a good fit for incorporation into PDAs, smartphones, and digital cameras, without adding unnecessary weight or bulk.
With its solid-state design, flash memory leaves the other digital audio alternatives--CDs and hard disk drives (HDDs)--in the dust. CDs and HDDs are mechanical and prone to skipping. Hard disks can crash. Portable CD players offer the convenience of a familiar medium, but are too large and heavy for outdoor enthusiasts.
In addition, flash's solid-state nature provides a smooth listening experience, uninterrupted by vibrations from running, walking, driving, and the perils of everyday life.
Still, a few digital-audio manufacturers focus exclusively on hard-disk memory, offering products that contain up to 40 Gbytes of memory storage. While HDDs are still necessary for bigger digital-audio storage applications, they are at a disadvantage for portable devices. Hard disk drives are large and heavy, they generate noise and heat, and their high power consumption rapidly drains battery life.
In addition, flash memory's storage capacity triumphs over HDDs because the availability of interchangeable memory cards provides digital-audio users with infinite storage options. In addition, the total system cost of a portable flash-based system is at cost parity with portable systems based on hard disk drives.
NAND flash also features a "refresh interface," which provides faster write/erase speeds than hard-disk drives. This option is very appealing to MP3 users, who demand maximum speed and performance to quickly build and erase playlists.
With its small form factor, solid-state design, and easy integration into a variety of handheld electronic devices, flash is the storage medium of choice for digital audio. As digital-audio players continue along their evolutionary path to become multifunctional, smaller, and lighter, flash memory will continue to gain momentum in the digital convergence era.
BUT THERE IS ONE THING THAT EDIG HAS GIVEN ITS SHAREHOLDERS--
PLENTY OF BUYING OPPORTUNITIES
my friends just call me travis--
http://www.prosaic.nu/box/travis.jpg
PortalPlayer designs software and a chipset called Tango for next-generation entertainment products, such as streaming audio receivers, portable digital music devices and other non-PC systems.
PortalPlayer is poised to go after the smartphone market as handset makers look for storage solutions for MP3 files downloaded over third-generation high-speed data links.
Sharp Focus
"We kept a sharp focus on providing a complete platform solution throughout the most severe boom-and-bust cycle ever experienced in the technology industry," said John Mallard, president and CEO of PortalPlayer. "The company is now shipping technology platforms for hard-disk-equipped jukeboxes and is ideally positioned to capture market share in this very hot product category."
Indeed, VC funding has been responsible for PortalPlayer's growth in difficult market conditions. The Santa Clara, California-based company was founded in May 1999. It now has 170 employees and operates additional offices in Seattle, Washington; Hyderabad, India; and Charlotte, North Carolina.
Digital Darling
How is PortalPlayer attracting VC big bucks while other technology companies are struggling to survive? Foresight is the key, according to Aberdeen Group research director Russ Craig.
"PortalPlayer realized early on that the whole digital music, MP3-based market was going to be quite sizeable, and they took the position that they were going to provide a platform," Craig told the E-Commerce Times. "They have built a single chip implementation of a device that will allow you to both play back and to record MP3 files."
More importantly, PortalPlayer has created a reference design and is teaming with companies that have complementary technologies. For example, PortalPlayer has inked a deal with Macstore that allows companies to produce MP3 jukeboxes that do not require a PC.
"These guys are so hot," said Craig. "This is the right way to go after this market. They have a much more cost-effective approach with the PC-free system, and it's a very low power consumption device, which means it hits the sweet spot of the market today."
Digital Rights Management
PortalPlayer is also attractive because it has branched out beyond semiconductors to secure a complete play. The company boasts software licenses from Microsoft and digital-rights management software embedded into the platform, making the company a "good guy" in the eyes of content providers.
"These guys essentially have the technology that gets around all of the lawsuits from the content people through the digital rights management software," said Craig. "PortalPlayer is the white hat, and it doesn't surprise me at all that they were able to raise this money."
The company is also ripe to go after the smartphone market, according to Craig, as handset makers look for storage solutions for MP3 files downloaded over 2.5G or 3G (third generation) high-speed data links.
Spending the Money
PortalPlayer said it plans to use the new funding to expand worldwide business development, marketing and sales activity, and to continue investment in products and platforms for its original equipment manufacturer (OEM) and original device manufacturer (ODM) customers.
The company reportedly is gearing up for an initial public offering. PortalPlayer executives were not immediately available for comment.
COOL COMPANIES 2002
PortalPlayer
Product/Service: Digital music platforms
Sector: Media
Website: www.portalplayer.com
iGuts
Executives at PortalPlayer have been proudly circulating a Fox Sports segment in which a reporter follows an L.A. Lakers shopping spree. The players are hunting for iPods, and as one explains, "Shaq said he wasn't going to let anyone sit on the back of the bus unless they had one." It just goes to show, says PortalPlayer CEO John Mallard, "this is the year of the jukebox."
That makes it the year of PortalPlayer too. Mallard co-founded the company in Santa Clara, Calif., in 1999, when, as he recalls, MP3 players could barely hold one CD. So PortalPlayer, wanting to expand this capacity, started making chips that power digital jukeboxes (which today have hard drives that store 2,000-plus songs). The company makes the iPod's chip and develops software that helps keep it and others humming. By Christmas, PortalPlayer says, it will supply the guts to more than 70% of handheld jukeboxes.
PortalPlayer is now moving beyond music. New software and chips will eventually allow iPod-like devices to hold photos, videos, TV shows, and even movies downloaded from a TiVo-like system. When that hits, one thing's for sure: Anyone who doesn't have one won't make it to the back of Shaq's bus.
-- Lee Clifford
well at least someone has gotten some VC recently
iPod chipmaker nabs $42 million
By Ian Fried
Staff Writer
June 11, 2002, 6:00 PM PT
PortalPlayer, whose chip powers Apple Computer's iPod, has received $42 million in fourth-round funding.
The lead investors in the latest round of funding were J.P. Morgan Partners, Investcorp International and Shamrock Capital Advisors. Other investors in PortalPlayer include CIBC World Markets, Linear Technology, LSI Logic, the Band of Angels Fund, Thomas Spiegel and Portal Partners.
"We kept a sharp focus on providing a complete platform solution throughout the most severe boom-and-bust cycle ever experienced in the technology industry," PortalPlayer CEO John Mallard said in a statement. "The company is now shipping technology platforms for hard disk-equipped jukeboxes, and is ideally positioned to capture market share in this very hot product category."
PortalPlayer, which was founded in May 1999, designs chips and software for digital audio players. So far the company has no announced customers, although its participation in the iPod is well documented.
The Santa Clara, Calif.-based company has 170 employees, including those at its headquarters, as well as offices in Seattle; Hyderabad, India; and Charlotte, N.C.
A PortalPlayer representative said the new funding, which follows the $38 million raised in prior rounds, is designed to be the last round of financing before the company files for an initial public offering, although the company does not have a time table for going public.
Steve Jobs is recognizably the top cheerleader for Apple's products. And the inventor of such hyperbole as "insanely great" has not abandoned that characteristic for the company's iPod MP3 player.
"With iPod, Apple has invented a whole new category of digital music player that lets you put your entire music collection in your pocket and listen to it wherever you go," the Apple CEO said when he introduced the product in October 2001. "With iPod, listening to music will never be the same again."
Although no one could accuse Apple, let alone Jobs, of being shy about product promotion, it's a different story when it comes to its engineering and building processes. The company has always been tighter lipped than the Pentagon when it comes to releasing design chain details.
But that hasn't prevented some companies from satisfying their curiosity about what's inside the advanced MP3 player. Some serious reverse engineering and discussion within the electronics industry unearthed unusual details of Apple's development process.
It turns out that much of the underlying iPod design was performed by outside companies. The Cupertino folk haven't given up on their heritage of design excellence--they're just bowing to some inevitable directions in consumer electronics by borrowing from established experts linked together for what may be the first design chain for the iPod.
A Unique Design Chain Approach
Realizing that the MP3 market was still in its infancy, Apple developed a layered design chain tuned for an early-stage market to create the iPod. Even more unusual for Apple, it relied on a platform and reference design created by a third party, PortalPlayer, of Santa Clara, Calif. Founded in 1999, PortalPlayer has a stellar cast of Silicon Valley executives and investors, including renowned venture capitalist Gordon Campbell.
PortalPlayer had developed a base platform for a variety of audio systems, including portable digital music devices, general audio systems and streaming audio receivers. It appears that Apple picked PortalPlayer because its design expertise yielded the highest quality of sound, according to industry sources.
Because of the unusually restrictive nondisclosure agreements in place among Apple, PortalPlayer and other members of the sub-design chain, key officials were not able to directly comment on their work with Apple. However, some members of the subchain provided Electronics Design Chain Magazine with a glimpse inside the iPod core.
Once Apple and PortalPlayer became design chain partners, PortalPlayer then selected other design chain members and managed the design process. Four key criteria were behind the selection of other members of the design chain, none unusual for a consumer electronics product:
highest quality sound
off-the-shelf components
cost
time to market
Under the Hood
The trail to find iPod's design chain starts with some reverse engineering of the device by Portelligent Inc., an Austin, Texas, firm providing product and technology intelligence for consumer electronics companies.
"First and foremost, the product was elegantly designed in classic Apple fashion," says David Carey, president of Portelligent. "They did product design from the outside in." Carey says the company had a vision of what the player should be and what it should look like. The subsequent design parameters were dictated by its appearance and form factor.
That outside-in perspective helped determine a number of the components, including the planar lithium battery from Sony and the 1.8-inch Toshiba hard drive, which is the only company presently manufacturing that form factor. The essential units--battery, hard drive and circuit board--are layered, one atop the next.
"It was very thoughtful layering and nesting of the components mechanically," Carey adds. "There's not a lot of unused volume inside [the iPod]."
The rest of the device uses a dedicated MP3 decoder and controller chip from PortalPlayer, a Wolfson Microelectronics Ltd. stereo digital-to-analog converter, a flash memory chip from Sharp Electronics Corp., a Texas Instruments 1394 firewire interface controller, and a power management and battery charging IC from Linear Technologies Inc.
What Apple conspicuously did not do is use an ASIC or other custom chip to integrate all the functions it needed onto one piece of silicon, which would have presumably saved space and battery life.
"Like with many of the systems being done today, it has time-to-market and risk-management issues," Carey notes. When a company moves to a custom system-on-chip, "you run the risk of a design flaw, and it's far cheaper to buy the best [components]."
PortalPlayer's vice president for marketing, Michael Maia, can't publicly disclose why Apple and PortalPlayer decided not to use an ASIC or discuss other aspects of the iPod design, but his description of a generic systems customer in the marketplace could be considered applicable to Apple.
"There's a range of customers out there, from an OEM that does all its own design internally to the right-hand side that do all their design through ODMs [original design manufacturers] in Asia," Maia says. "There are guys in the middle who may specify the product down to the semiconductor level and then have the ODM build it."
PortalPlayer decided to develop a reference model for a high-quality portable audio player based on a standard product design strategy. It developed a series of designs that enabled customization, and at the same time provided a stable environment, thereby eliminating the need to start design from scratch.
PortalPlayer's Winning Relationships
Part of PortalPlayer's design chain strategy is to offer development tools as well as to form relationships with third parties that offer other capabilities. The result is a series of reference designs for different applications along with roadmaps for current and future application capabilities.
"Customers can get access to that, and in that, we work very closely with select partners that we have carefully chosen for a host of reasons," says Maia. "Wolfson [for example] has what our minds and ears tell us are excellent quality codecs."
In addition, "Wolfson has excellent quality technology and a good price point," he notes. As a result, PortalPlayer and Wolfson Microelectronics became design chain partners for the audio player reference design.
The design process was a matter of a few months of iterative loops. PortalPlayer would use the Wolfson silicon in a prototype circuit, then go back to the Edinburgh, United Kingdom, company with any problems. "Once you've tried the device, we can hone in on the issues," says Julian Hayes, vice president of marketing at Wolfson. "We're fairly expert at solving problems these days."
PortalPlayer selected Linear Technologies of New York City for the power management because its technology is leading edge and also because there were preexisting ties between upper management of the two companies.
But PortalPlayer had to develop a working relationship with TI, a competitor in other areas, because Apple insisted that the Dallas-based company provide the 1394 chip.
The flash memory from Sharp, of Mahwah, N.J., shows a different relationship, as PortalPlayer considers itself "agnostic" when it comes to memory chip vendors.
Risk Reduction
Using a platform like PortalPlayer's, in which systems are designed and chip designs verified, offers fewer worries to a company that is in a rush to market. With the design chain approach it has taken, Apple avoided the technical challenges of integrating DRAM and logic processes.
"To do everything in one part is a complex, risky and potentially costly alternative to integration of available components at the electronic assembly level," Carey says. Certainly, custom work can offer cost reductions in large volume, but there are two countering considerations for a company like Apple.
One would be volume, according to Mike Paxton, senior analyst of converging markets and technologies at Scottsdale, Ariz.-based In-Stat/MDR.
"If you listen to Steve Jobs, he said they sold 125,000 in the fourth quarter [of 2001], which is impressive," given that the iPod only began to ship in October, Paxton says. By checking that figure against discussions with component suppliers, he decided that it was probably accurate. But while such sales, if kept constant for an entire year, would make Apple the second- or third-largest MP3 player manufacturer worldwide, the volume is small compared to more common uses of custom chips.
In addition, the IC costs for a device like the iPod won't dominate Apple's bill of materials. Carey estimates that the hard drive is at least 50 percent of the expense, so the advantage of bringing design in house or working with a single chip vendor instead of a more extensive design chain using a variety of outside suppliers is reduced.
The other consideration is the typical trade-off when doing custom work: flexibility in design and vendor selection versus the potentially low volumes and relatively high unit prices.
All for One
Apple's design chain relied on off-the-shelf components integrated in an elegant way. Even critical pieces such as the digital-to-analog converters (DAC) are off-the-shelf discrete devices. The DAC "is a standard component that was designed for Wolfson for portable music players," says Hayes. The Toshiba drive is another standard part.
"With iPod, Apple has invented a whole new category of digital music player that lets you put your entire music collection in your pocket and listen to it wherever you go." Steve Jobs, Apple Computer
Where the value rapidly accumulates is in the intelligent coordination among the vendors and integration of their products. The combination and linkage of the DAC to other components is where the PortalPlayer-Wolfson design chain provided real worth. "There's a lot of embedded stuff" inside the design, says Hayes. "It has some fairly complex DSP algorithms to enable the features of the products that Apple may or may not be taking advantage of."
Apple and PortalPlayer also relied on other key design chain partners. While the Toshiba drive, for example, uses a standard AT interface, the connector is a custom design. And it appears Apple relied on Toshiba for guidance about heat dissipation and shock tolerance.
The nondisclosure agreement between Apple and Toshiba precludes the disk drive maker from describing its design chain role. However, a source close to the design chain says Toshiba did contribute to the overall design.
Don't Count Apple Out
It would be a huge mistake to assume that all the design work happened elsewhere and that Apple had no substantial input. A reference design is far from having a finished product, even electronically. The ultimate circuit design was still Apple's, as far as any outsider can tell.
"The value is putting it all together and optimizing the design to eek out the best performance, get the best power utilization, the best audio performance," says Wolfson's Hayes. "That is not a trivial task by any means. Sometimes it's very difficult in a cost constrained [situation] and small form factor to get the performance." Factors that can influence the final sound can be the circuit board layout, the circuit design itself, the handling of the power supply and the overall implementation.
"It's a combination of all those things that create that high-quality performance," Hayes adds.
In his opinion, and in that of many reviewers, Apple hit a home run. "Certainly I think it's about the best audio quality we've come across for that type of product in the marketplace in terms of intrinsic audio quality and delivered audio quality," Hayes says.
Then there is the user interface design, which has received strong reviews for the implementation of a 1394 interface for music downloads so fast that it could make your head spin. And it's easy to use.
"It's a fantastic user interface," emphasizes Hayes. "It's by far and away the best user interface of any product of this type. It sets it apart from any of the other comparable MP3 players of its ilk."
Choosing a development platform allowed Apple to focus on its true genius for form factors and user interfaces. "Those two are Apple's strengths," says Vinay Asgekar, director of research for semiconductor and high tech at Boston-based AMR Research. "Apple knows how to make a high-tech product consumer friendly. That has been its core strength from the introduction of the Apple Macintosh. That could be its strategy for iPod."
Troubled Waters
With all the positives, is there a down side?
"Managing that activity [among multiple partners] becomes extremely difficult," says Asgekar, as projects become harder to coordinate. "You have to make sure your supplier's development and marketing roadmaps match up with your development and marketing roadmaps."
While PortalPlayer's Maia is restricted from discussing how Apple managed its iPod design chain, he was able to describe how systems houses in general work with the audio subsection designer. A drawback for Apple, and other systems houses relying on reference designs, is protection of its product and market space. When fundamental parts of the design are done by others, there is an almost certainty that competitors will eventually ship products using the same basic technology. Obviously, a company like PortalPlayer makes the same silicon, firmware, tools and reference designs available to many other companies.
While PortalPlayer provides designs on an exclusive basis for some customers, Maia hints that the guts of the iPod may appear in other devices soon. So although Apple has been the first of PortalPlayer's customers to ship products using the platform, many more are slated to introduce their own offerings by this summer.
No doubt subsequent versions of the iPod will yield a revised design chain as different components and optimizations are discovered and needed. But for now, Apple's first design chain strategy and product have been a success.
What are reverse splits?
A reverse stock split is the opposite of a straight split: For example, in a 1-for-5 reverse split, an investor with 100 shares worth $3 each will end up with 10 shares at $30. In any case, the value stays at $1,000.
While a split itself doesn't change the market value of a company, it is seen as a signal about its prospects. The market typically interprets a straight split as bullish and a reverse split as bearish, Johnson said.
Reverse splits are "a last ditch effort" to boost a share price when the company's own business cannot under present market conditions, he added. However, "in most cases, it doesn't work."
Companies do reverse splits to boost their stock price, at least in the short run, and stave off a possible delisting. Higher prices lure institutional investors, who typically stay away from cheap stocks with low liquidity - the pool of shares isn't large enough for big investors to easily trade holdings without causing major movements.
Johnson said the cut off price for institutional investors like mutual funds had been $12 to $15, but it's down to $7 to $8 in the bear market
A reverse split also shrinks the number of shares traded, decreasing dilution for companies that have had too many straight splits.
While AT&T is not in danger of being delisted -- trading well above the $1 minimum required by the New York Stock Exchange --analysts believe most of the stock's value lies in its cable assets, which is being sold to Comcast (CMCSK: news, chart, profile). After the sale, the fear is that AT&T might dive. Shareholders approved a 1-for 5 in July; the Comcast deal is expected to close by the end of the year.
Johnson believes that large-cap companies that do reverse splits generally have a better shot at succeeding than small firms.
Still, Marc Gerstein, director of investment research at Multex, advises investors to stay away from them.
"If I had a company that announced a reverse split, I'd sell it," he said. "I'd rather see them improve operations" to boost the stock.
Some companies even do more than one reverse split, which Gerstein sees as a true sign of desperation. This year, four companies undertook at least two splits: Timber (TBRR: news, chart, profile), Knowledge Networks (KNWK: news, chart, profile), Career Worth (CRWO: news, chart, profile) and Midwest Venture (MVHI: news, chart, profile).
As a result of a 1-for-100 split and a 1-for-250 split, Timber's loss per share ballooned past three digits since the number of shares has shrunk greatly - and too big to fit into Multex's database.
Knowledge Networks has had three reverse splits. "It has no present business or productive assets," Gerstein said. "Enough said."
Career Worth used to sell job listings on CD-ROM, but the Internet foiled its business. It's trying to get into the construction industry.
"In the first half of 2001, I had more cash in my checking account than they had in sales," Gerstein said. "That's frightening."
As for Midwest, Multex describes it as a "development stage company" that "intends to engage in the business of acquiring and developing property." It has no sales but lost $2 million in the first six months of 2002 due to higher general and administrative costs.
"I think I saw this in the Sopranos," Gerstein said. "These are companies you don't want to be owning."
Plunge in online music sales blamed on file sharing
By Dawn C. Chmielewski
Mercury News
Online sales of music CDs are plummeting three times as fast as traditional retail CD sales, another sign of the corrosive impact of file-sharing services on record sales, a New York research group reports today.
A comScore Media Metrix study reveals that while traditional retail music sales are off 6 percent for the first half of the year -- online sales fell 20 percent over the same period. And the pace is accelerating, with sales down 12 percent in the first quarter of the year -- but declining 39 percent in the third quarter.
Peter Daboll, division president of comScore Media Metrix, said many factors contributed to the decline -- including a weak economy and fewer hit songs. But the greatest effect is linked to the increasing popularity of online file-sharing and computer CD-burners.
Since the collapse of pioneering file-swapping service Napster, consumers have quickly flocked to alternatives such as Kazaa and Morpehus. Kazaa, the reigning king of song-swapping, has more than 10 million users in the United States alone -- a 20-fold increase since comScore first began tracking usage in June 2001.
The Recording Industry Association of America, the labels' Washington, D.C., trade group, said the study reaffirms what it has been saying all along -- that piracy undermines the marketplace for legitimate, online music.
``All legitimate businesses online have an incentive to fight piracy,'' said an RIAA spokesman, Jonathan Lamy. ``Obviously, as this study shows, it affects everyone.''
Daboll said the collapse of online CD sales could be a bellwether of further sales erosion at traditional retailers, like Tower Records or WalMart.
``Online sales seem a leading indicator of what's going to happen offline,'' Daboll said, whose research group monitors the online activity of 1.5 million Internet users.
Some leading Internet retailers disputed the comScore numbers -- saying that while online CD sales are down roughly 20 percent from the same time last year, ``it's not the god-awful gap that they're predicting.''
CDBaby, of Portland, Ore., the second-largest online retailer of independent artists, said its sales have doubled since last year. And it expects a seasonal spike in sales as the holidays approach.
John Steup, CDBaby's vice president and director of operations, said the comScore study could reflect consumer backlash against mainstream music, and the rise in popularity of unsigned bands playing the local clubs.
``People are buying what they're living,'' said Steup. ``They're not buying the tripe on the radio.''
--------------------------------------------------------------------------------
Dell's iPod plans don't extend to Europe
By Laura Rohde, IDG News Service
The slight thaw in relations between Dell Computer Corp. and rival computer maker Apple Computer Inc. will not extend to Europe, at least as far as the iPod MP3 player is concerned.
"There are no plans to offer the iPod in Europe at this time," said Dell U.K. spokeswoman, Laura Kemp [CQ] in an e-mail response to questions.
Last week, Dell announced it had begun selling Apple's 5GB, 10GB and 20GB iPods for Windows in the U.S., through its direct sales channel.
Apple representatives could not immediately be reached for comment.
Online Music Sales Plummeting, Study Says
Peer-to-peer services are growing exponentially, as Web surfers still want free music, researcher says.
Scarlet Pruitt, IDG News Service
Monday, November 04, 2002
Online music sales plummeted 39 percent in the third quarter of this year compared to last year, pushed by increased file sharing and CD burning, new research reveals.
The decline in online sales of CDs and other physical recorded media could pose a serious threat to the music industry, which appears to be losing its battle against the proliferation of free music available online. Furthermore, the research due to be released Monday by comScore Media Metrix shows that not only are online music sales dropping, they are declining at an accelerated rate.
Year-over-year 2002 online music sales fell 12 percent in the first quarter and 28 percent in the second quarter before diving 39 percent in the third quarter.
Furthermore, the researcher said that sales for the first three quarters of the year fell 25 percent over last year, from $730 million in 2001 to $545 million this year.
Something for Nothing
The decline corresponds to the rocketing growth of peer-to-peer file sharing services such as Kazaa and Morpheus, said comScore, based in Reston, Virginia. Both services had less than a million monthly U.S. home users in June 2001, but by March 2002 Kazaa had swelled to 5.8 million users and Morpheus boasted 7.2 million.
Furthermore, Kazaa continued to balloon, with more than 10 million U.S. home users in September 2002, according to comScore.
The growing popularity of file sharing services has not gone unnoticed by the music industry, which has tried to throw lawsuits, legislation, and consumer education in their way. Despite these efforts, the services have retained their grip, proving that irresistible lure of something for nothing.
Fighting Back
The Recording Industry Association of America, the group that represents the major labels, said last August that CD shipments for the first half of 2002 had dropped 7 percent over the year-ago period.
The figures provided by the RIAA were based on data from PricewaterhouseCoopers, which did not break out online and offline sales figures.
Upon releasing its figures in August, RIAA President Cary Sherman said that, "cumulatively, this data should refute any notion that illegal file sharing helps the music industry."
It makes sense then that the steepest sales declines would be online, among Net savvy users. According to research provided by the RIAA, 35 percent of young Internet-connected music buyers said that the first thing they do after hearing music they like by an unfamiliar artist is to download the song for free.
DataPlay leaves large debt
Boulder company files for Chapter 11 protection, owes up to $50 million
By Janet Forgrieve, Rocky Mountain News
October 23, 2002
Boulder-based DataPlay Inc., which closed its doors and fired its remaining 120 employees earlier this month, has filed for Chapter 11 bankruptcy protection.
During its four-year life, the company raised $120 million in capital to develop its quarter-sized discs and tiny drivers, which it expected to revolutionize the recorded music industry.
In its bankruptcy filings, the privately held company estimates that it owes between $10 million and $50 million to more than 200 creditors. The filing also says the company's assets total somewhere between $1 million and $10 million.
The debt listed on its roster of top 20 unsecured creditors totals almost $14 million. Unsecured creditors typically include landlords, vendors and suppliers.
One of the unsecured creditors is Flat Irons North LLC, which built, owns and leases the two 50,000-square-foot east Boulder buildings that served as DataPlay's headquarters.
Flat Irons President Bill Reynolds said back rent totals about $792,000.
"They haven't paid us for a while, so there's a lot of money they owe us," Reynolds said.
He expects to find a new tenant for the buildings next year, he said. Reynolds declined say how much DataPlay was paying in rent, but did say he expects to get significantly less from the next tenant.
The largest unsecured creditor listed is Hong Kong-based Vanco Technology Ltd., at $3.9 million.
DataPlay's staff at one point numbered about 240. The staff was cut in half during a round of layoffs in July.
When it closed its doors on Oct. 11, DataPlay said it hoped to find a buyer for either the whole company or at least the technology it has developed.
Phone calls Tuesday from the News to DataPlay founder and CEO Steve Volk, board member Tom Washing and lawyer Glenn W. Merrick were not returned.
According to the company's Web site, music players using DataPlay technology are still available for between $320 and $350.
Microsoft, Panasonic make CDs versatile
By Richard Shim
Special to ZDNet News
October 18, 2002, 6:09 AM PT
Microsoft and Panasonic are trying to get PCs and consumer-electronics devices to play well together when it comes to digital media.
The two companies will announce on Friday a new technology designed to let consumers easily sift through and open photos, music files and other digital content stored on a compact disc, whether they're using a PC or a consumer-electronics gadget such as a CD or DVD player.
Consumer-electronics devices have traditionally differed from PCs in the way they display and open digital files on CDs, making crossover use of compact discs a random and confusing experience for consumers, according to Michael Aldridge, a Microsoft spokesman.
The two companies are trying to smooth that wrinkle with their co-developed High-performance Media Access Technology (HighMAT). They'll license the technology and also use it in their own, respective products. Fuji Photo Film has signed on as an early licensee. Though HighMAT will initially work only with compact discs, the two companies have plans to extend it to other storage formats, such as DVDs.
"As digital entertainment continues to evolve in the home, we see many opportunities for PCs and (consumer electronics) devices to enhance each other through faster and easier interoperation," Will Poole, Microsoft vice president of New Media Platforms, said in a statement.
HighMAT is yet another technology, such as Universal Plug and Play, on which PC and consumer-electronics companies are working to bring their respective worlds together. The move is meant to take advantage of the increasing popularity of digital content and encourage consumers to purchase new consumer-electronics devices and PCs that can help them create and use that content.
"HighMAT allows (consumer electronics) makers to capitalize on the large base of PC users while it helps Microsoft to enhance the PC as a hub for digital home entertainment," said Susan Kevorkian, analyst with research firm IDC.
Microsoft will add HighMAT support in its final version of Windows Media Player 9 and in a future version of Windows Movie Maker. Panasonic will add it in CD and DVD players due out in 2003.
Aldridge said CDs created using HighMAT technology will be compatible with older players and PCs, but they won't enable those older devices to share a common interface.
Aldridge would not disclose the other companies Microsoft is working with to add HighMAT technology to their products.
Panasonic is a brand name for Osaka, Japan-based Matsushita Electric Industrial.
Matsushita, Microsoft promote new media storage standard
By Martyn Williams
October 18, 2002 5:46 am PT
MATSUSHITA ELECTRIC INDUSTRIAL Co., better known as Panasonic, and Microsoft have jointly developed a new way to store, access, and retrieve digital multimedia stored on recordable optical discs, they announced in Tokyo on Friday.
The technology, called HighMAT (high-performance media access technology), spells out a common way to store data such as digital music, photos, and video and also specifies the way in which devices can access this media and is intended to make accessing the data faster and easier for consumers.
At the base of the system is a set directory structure under which images, audio and video are stored. In addition, a metadata file is also stored on the disc providing information about the files and what they contain. Access to media is fast because HighMAT-compatible devices will be able to determine disc contents by accessing the single file rather than reading the disc's directory structure and having to fetch in turn information about each file stored on the disc.
"Until now CDs have had around 20 songs on them so if you want to access track 7, you just press the 7 button," Susumu Furukawa, corporate vice president for advanced strategy and policy at Microsoft, said at a Tokyo news conference. With consumers now using CDs to hold a diverse range of data and sometimes hundreds of files, finding particular files is not so easy, he added.
By utilizing the new system, consumers should see faster start-up times for CDs and also a more consistent interface to content stored on optical discs across a wide range of access devices, such as DVD players, car audio systems, and personal computers.
Users should also be able to manipulate and sort content on discs more easily because the HighMAT data file contains additional information about the content, such as artist name or genre in the case of music files. This means custom playlists can be quickly created, said Furukawa. The metadata for audio tracks is encoded at the time of ripping by using technology already built into Windows, whereby the Media Player contacts an Internet database and fetches information about the CD and tracks.
HighMAT is intended to be used with CD-R and CD-RW systems for storing consumer-created content and so Microsoft said it will build support for the system into the upcoming Windows Media Player 9 software and Windows Media Maker 2 software.
For third-party software developers, a software developer kit (SDK) will be made available so support for HighMAT can be built into CD burner packages, said Alex Limberis, director of business development at Microsoft's digital media division. The SDK is expected in January 2003, he said.
The system has support for five file types: Windows Media Audio, MP3, JPEG, Windows Media Video, and MPEG4.
"If this system is to become widely used, we have to limit the formats," said Limberis. "The reason is, if you burn a HighMAT disc, you can be assured that you will be able to play it on any HighMAT standard hardware."
Initial support for the system in hardware is coming from Matsushita and the two companies said Fuji Photo Film Co. Ltd. has also agreed to offer HighMAT encoding when customers opt to have their pictures on CD. The format is compatible with the existing ISO9660 file format and so discs will also be able to be played with existing software and devices.
Licensing to other hardware makers has yet to begin and the companies said they have still to decide on licensing fees.
"The business model is to charge consumer electronics device makers a fee," said Limberis. "However for producing discs and for companies like FujiFilm that are producing discs from consumer-created content, there will be no fees. This is more about interoperability between the PC and consumer electronics devices than about generating huge licensing fees."
First generation versions of HighMAT do not include data regarding copyright or rights management but the inclusion of such data is being studied for future versions, said Limberis.
re E-COM: note the date below--
Pronounced Technologies and Eclipse by Fujitsu Ten Team Up to Launch New In-Vehicle Voice-Interactive Control Systems
Patented Voice-Interactive Technology Enables Hands-Free Control of Radio, Phone, Etc.
RESEDA, Calif.--(BUSINESS WIRE)--April 13, 1999-- Pronounced Technologies has entered into an agreement with Eclipse(TM) by Fujitsu Ten(TM) to supply the voice-interactive operating software for new versions of the Eclipse Commander in-vehicle voice-interactive computers.
These Eclipse Commander computers will consist of a command module connected to an Eclipse CD player and will allow for voice command of audio controls, cellular phone operation and several in-vehicle electronics, with the flexibility for further expansion.
Pronounced Technologies' voice-interactive software will communicate directly with the Eclipse Commander model 9002. This command module connects to E-COM (Eclipse Commander)-ready CD players (models 5506, 5504 and 5443) and interacts with the task-specific software, equipping each system with speaker-independent voice command of the following: audio system controls; cell phone integration; and on-board vehicle electronics such as window operation and alarm setting.
These interfaces make the Commander models the first audio systems with complete voice control of audio and phone functions. Optional voice-interactive navigation system software is available at an additional cost.
The voice-recognition chip used is a high-quality engine that features a complex spell-checking system, rejection of out-of-vocabulary words, and high-noise robustness. It also enables the in-vehicle systems to respond to different voices (speaker independent), regardless of variable speech patterns, dialects, etc. Pronounced Technologies' chip reacts to voice commands in virtually real time, responding at a rate of 250 milliseconds.
``Our agreement with Eclipse by Fujitsu Ten marks a significant achievement in the consumer electronics market by applying speech recognition technology to audio systems and transforming them into fully functional in-vehicle computers,'' said Zaya Younan, president and CEO of Pronounced Technologies.
``Pronounced Technologies has refined its voice-interactive chip and software to control almost any in-car function through the stereo or CD player. Now car audio manufacturers are able to make the next generation upgrade to their existing audio systems by simply integrating our voice-interactive operating software for added features at a minimal cost,'' Younan added.
``The new Eclipse Commander models will be an extension of our existing navigation-ready Commander models,'' said Ray Windsor, vice president of marketing for Eclipse by Fujitsu Ten. ``By integrating Pronounced Technologies' voice-interactive chip and software into our products, we're able to respond to consumers who wish to control their radio, phone and other electronics through voice commands, but don't necessarily need a navigation system.''
All Eclipse Commander voice-interactive systems will be available late April at car audio and consumer electronics specialty retailers.
Pronounced Technologies is a leading developer and manufacturer of speaker-independent voice-interactive products and software, designing the world's first easy-to-use and low-cost voice-interactive mobile navigation system, enhancing the safety and convenience of consumers. The company's management and engineering team focuses on the development of consumer applications for their patented voice-interactive technology.
Pronounced Technologies is located in Reseda.
Eclipse by Fujitsu Ten is a manufacturer of mobile audio components for OEMs and aftermarket applications and motoronics for OEMs. Eclipse, the aftermarket brand of Eclipse by Fujitsu Ten, is a full line of award-winning high-performance mobile audio products including CD players, cassette decks, amplifiers and speakers. Eclipse products are distributed exclusively through the specialty retail channel of distribution.
Eclipse by Fujitsu Ten is based in Torrance, Calif.
Contact:
Pronounced Technologies, Reseda
Shae Andrae, 818/654-2750
or
Aldrich & Associates Inc., Long Beach
Brian Iannessa, 562/436-5156
brian@aldrichpr.