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ot-Battle looms over successor standard to DVD
Kuriko Miyake, IDG News Service\Tokyo Bureau
November 07, 2002, 23:10
Two competing technologies which enable more than 20G bytes of data to be stored on each side of an optical disk are nearing commercialization, leading to fears that the industry could be split between support for one format or the other.
Toshiba Corp. and NEC Corp. have proposed their Advanced Optical Disc (AOD) technology as a standard to the DVD Forum, a consortium of 212 companies. The forum is expect to settle on full specifications for AOD by the second quarter next year, said Hideyuki Irie, a DVD Forum official.
Earlier this year, the basic specifications for an alternative high-capacity standard known as Blu-Ray were announced by nine companies: Matsushita Electric Industrial Co. Ltd., Royal Philips Electronics NV, Sony Corp., Hitachi Ltd., LG Electronics Inc., Pioneer Corp. Samsung Electric Co. Ltd., Sharp Corp. and Thomson Multimedia SA.
The AOD is based on a 405-nanometer-wavelength blue laser and can store up to 20G bytes of data on one side of a disc of the same size as a conventional DVD disc. AOD drives are expected to be commercially produced next year, according to Mitsumasa Fukumoto, an NEC spokesman.
Blu-Ray, which also uses a 405-nanometer blue laser, can store up to 27G bytes of data on one side or 50G bytes on two sides, and is expected to be commercialized soon but no targeted launching date is set, Sony's Tsuyoshi Sakaguchi said.
High-capacity DVD drives are expected to be in demand in Japan once high-definition broadcasting begins next year. The 20G-byte capacity is large enough to record about two hours of high-definition video.
The industry is concerned about a battle between the AOD and Blu-Ray standards in future, according to Irie.
"The forum has been trying to merge the two formats into one standard and hasn't given up on doing so, but technically speaking, it is very difficult unless each side approaches and compromises with each other," Irie said.
However, the forum sees little possibility of those approaches being made, Irie said.
The same standards issue exists in the conventional 4.7G-byte DVD world.
DVD has three main formats -- DVD-R/RW (DVD recordable/rewritable), DVD-RAM and DVD+R/RW. The first two are backed up by the DVD Forum, which also supports DVD Multi, a standard to comply DVD-R/RW and DVD-RAM. DVD+R/RW is supported by Sony Corp., Hewlett-Packard Co. Mitsubishi Chemical Corp., Yamaha Corp. and Ricoh Co. Ltd.
Sony, which is also a DVD Forum member, recently unveiled a DVD-R/-RW/+R/+RW drive but not many companies from either side are planning to follow.
http://www.idg.net/ic_962742_1794_9-10000.html
culater
ot-Are Tech Innovations Drying Up?
By Peter Dizikes
November 11, 2002
http://www.newsfactor.com/perl/story/19941.html
Some prominent research figures are putting a positive spin on the end of the technology bubble by saying it has helped them get back to basics.
The technology slump of the past two years has cost thousands of workers their jobs, decimated some companies and slowed down the economy. Will it also result in fewer innovations from America's high-tech firms?
That question can produce contentious responses inside Silicon Valley. But it's also a significant long-term economic issue. A U.S. Commerce Department study shows that information technology companies accounted for nearly 30 percent of national growth between 1995 and 2000, despite comprising just 8 percent of the national GDP. And tech firms grew in large part due to innovations cooked up in America's research labs.
Indeed, research is the lifeblood of the technology industry. And yet, with businesses having chopped information technology spending, the fallout has hit the labs. According to one study, spending on research and development (R&D) in the technology sector declined 8 percent from mid-2001 through early 2002, a total drop of $1.7 billion.
"You're not seeing companies invest as much in basic research as they once did," says Mike Katz, managing director of consultant PricewaterhouseCoopers' Global Technology Center in Menlo Park, Calif. "That is a little worrisome."
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Can a Recession Help Research?
Good times or bad, however, America's bellwether technology firms love to emphasize their commitment to research -- understandably, considering that Wall Street tends to punish companies slashing R&D budgets. Microsoft and General Electric, for instance, have been heavily publicizing the expansion of their research efforts. And some prominent research figures are putting a positive spin on the end of the technology bubble by saying it has helped them get back to basics.
"In a boom time, you're having trouble keeping up with the boom," says Dick Lampman, head of Hewlett-Packard labs in Palo Alto, Calif. "But in a down time, people can refocus."
Jim Mitchell, head of Sun Microsystems' labs in Santa Clara, Calif., says the end of the tech bubble "was traumatic at first," especially when Sun laid off about 4,000 workers. But he adds: "Right now, I'm having more fun at Sun than I've had in a long time. You tend to get more focused on the essentials ... it's actually kind of nice."
Indeed, say some key industry figures, technology research is not so much suffering because of the downturn, but evolving. While the old, idealized image of high-tech research involves a place like Xerox PARC, where inventions flowed freely in the 1970s and the parent company simply left the scientists alone for years, times have changed.
Thus the tech slump seems to have accelerated two broad shifts in the world of research. Scientists, instead of being holed up in the lab, work more with the developers at their companies, churning out new products. And their projects are more frequently driven by the needs of customers -- who, at this point, seem to have a better understanding of technology than the free-spending hordes of a few years ago.
The Holy Grail of 'Technology Transfer'
Take Sun, which, like many tech firms, has cut its R&D funding slightly -- to $1.8 billion in the 2002 fiscal year, down from $2.0 billion in 2001, although that does represent a higher percentage of company revenues being used for research. Sun labs has performed some research triage -- but expects to have the same impact on the company as before.
"We looked very hard at what we were doing, and we did stop a few things in order that we keep other [projects] fully funded," says Mitchell.
As a rule of thumb, Mitchell tries to ensure that he has at least four "harvestable" projects on tap every year. He also directs researchers to spend up to 20 percent of their time working with Sun's product division to bring its ideas to market -- the often-arduous process of "technology transfer."
"Most research labs fall down not in doing the research but in getting it to be a product for the company," says Mitchell, a veteran of Xerox PARC in the 1970s, where scientists' computing breakthroughs were essentially ignored by the parent company. So at Sun, "Basically the research team goes into the product division and works with the engineers" until issues are resolved.
To be sure, this kind of integration predates the tech bust. Robert Morris, head of IBM's Almaden Research center in San Jose -- the envy of many in the industry -- says the trend took off in earnest about a decade ago. Which is, not coincidentally, when IBM overhauled its research operations, even linking evaluations of researchers to the performance of certain company divisions, in an effort to avoid what Morris calls "the silo effect" of isolated research.
Still, in these lean times, it's especially important for research labs to have an active role at any company. At Sun's board meetings, says Mitchell, "I always get asked, 'How much technology transfer do you do every year?'"
The Enlightened Customer
Research divisions are also gaining new directions by dealing more directly with customers. Many agree that businesses still buying technology after the boom have sharper questions to ask -- and are more frequently stimulating to researchers.
"In the Internet craze people were just throwing money at systems," says HP's Lampman. "Now they've had to start thinking."
In particular, one issue businesses are thinking about more often is computer security -- "a rapidly rising issue," according to Lampman, due to the events of Sept. 11, 2001, as well as the prevalence of computer viruses, worms and other well-publicized security flaws. In turn, HP is concentrating on "architectural" security solutions that presume customers will not just passively install systems, but update their security measures and generally take a more active role as consumers.
Security is also a rising priority at IBM, says Morris, where customers will often ask to meet with particular researchers now, having seen or heard about their work. The result, he says, is that "they both learn from each other." That process, says Morris, spurs individual researchers to be more productive.
"The problems have to come from customers and not just be things you've thought of in a lab," says Morris. "That does not contradict the commitment to research. It means you change the way you do research."
'Technology Keeps Moving'
Of course, even IBM tries to balance its customer-spurred research with longer-term efforts. Take, for instance, the company's much-touted "Millipede" project, which employs nanotechnology -- the manipulation of matter at the molecular scale -- to shape plastic in order to provide data storage. The technology, which promises to store the equivalent of 25 DVDs on a surface the size of a postage stamp, figures to be at least five or 10 years from fruition.
IBM's recent decision to sell its hard-drive business -- which at one time helped define the company -- has led to speculation it is essentially making a big bet that nano-scale products will define storage in the future. But Morris is playing it close to the vest when it comes to the purpose of the research.
"We're certainly not willing to say it could replace the disk drive," says Morris. "It's something we're exploring."
Work in nanotechnology, he points out, has a strong institutional impetus at IBM, where it has been taking place since the 1980s. That kind of commitment to a particular form of technology can be self-sustaining, attracting talented researchers and spurring advances regardless of customer needs or the potential for short-term payoffs.
Indeed, for all the talk of integration within companies and with customers, says Andrew Dawson, general manager of ITT's Harrisburg Design Center, there will always be a certain amount of farsighted thinking and discovery taking place in the nation's research labs.
"Technology keeps moving and accelerating independent of the current market timing," says Dawson.
Now if only the economy would improve.
culater
ot-Forget the Files and the Folders: Let Your Screen Reflect Life
By DAVID GELERNTER
HE end of the Microsoft trial is great news whatever you think of the defendant - because the trial was all about the past, and we in the technology world have no more time to waste on that topic.
The trial focused on Microsoft's Windows operating system - on the power Microsoft gets from Windows' huge worldwide penetration; on the burdens that other software companies bear because of their limited access to the Windows software; on accusations that Microsoft was suppressing innovation. The courts have officially labeled the gigantic software company a monopoly, and Microsoft will be subject to careful scrutiny for abusive activity.
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Meanwhile, operating systems are lapsing into senile irrelevance. An operating system connects the user (and the user's software) to the ensemble of machines we call a computer. But nowadays users no longer want to be connected to computers. They want to be connected to information, a claim that sounds vague but is clear and specific.
Every piece of digital information you own or share will appear (in the near future) in one universal structure. (Just ask Bill Gates: as he said cogently last July, "Why are my document files stored one way, my contacts another way and my e-mail and instant-messaging buddy list still another, and why aren't they related to my calendar or to one another, and easy to search en masse?") A universal structure demands universal access: you'll be able to tune in this structure from any Net-connected computer anywhere.
I have time for only one screen in my life. That screen had better give me access to everything, everywhere.
What is this universal information structure? A narrative stream, which says, "Let me tell you a story. " The system shows you a 3-D stream of electronic documents flowing through time. The future (where you store your calendar, reminders, plans) flows into the present (where you keep material you're working on right now) and on into the past (where every e-mail message and draft, digital photo, application, virtual Rolodex card, video and audio clip and Web bookmark is stored, in addition to all those calendar notes and reminders that used to be part of the future and have since flowed into the past to be archived forever).
And so the organization of your digital information reflects the shape of your life, not the shape of a 1940's Steelcase file cabinet. Storage space and computing power are dirt cheap; our task isn't to "use them efficiently," it's to "squander them creatively." Instead of searching through your stream for some document, you focus it (as if you were focusing an information beam - which is like a flashlight beam cutting through the digital fog, except that the beam is made of information instead of light). You wind up with a selection of documents, a "substream" that tells some particular story. Your narrative stream as a whole consists of all the interwoven stories that make up your life - your own personal ones as well as the stories of all the groups and communities you belong to.
This kind of information management is simpler, more powerful and more natural than the Steelcase-inspired software we've got today - the files, the folders, the desktops and all those other high-tech office accessories straight out of 1946.
How do I know it will work? Because our company has built it, and it does. (A preliminary desktop version of narrative information management can be downloaded free at our Web site, www.scopeware.com.) Microsoft has similar goals for its Longhorn system, but Longhorn won't be available for two years. We needed one-screen narrative information management yesterday. Our software is up and running today.
Windows is no tool for the future and doesn't claim to be. Technology's future can't possibly be based on treating computers as if they were hyped-up desks and file cabinets - passive pieces of ugly furniture. Computers are active machines, and information-management software had better treat them that way. But Windows can play a central role in giving the future a leg up. It can supply a stable, ubiquitous platform for the future to stand on.
We built our system on Microsoft Windows because Windows is a reliable, solid, reasonably priced, nearly universal platform - and for the software future, "universal" is nonnegotiable. We need to run the system on as many computers as possible and manage the maximum range of electronic documents.
Of course, another operating system, Linux, is also clamoring for attention. Linux and Windows are both children of the 70's: Linux grew out of Unix, invented by AT&T; Windows is based on the revolutionary work of Xerox research. In technology years, these loyal and devoted operating systems are each approximately 4,820 years old. (Technology years are like dog years, only shorter.)
Each is nonetheless still solid enough to be a good, steady platform for the next step in software. But Windows is the marketplace victor and has now won a decisive legal imprimatur. There is no technical reason for us to move to Linux; why should we switch? Why should our customers?
Some argue for Linux on economic and cultural grounds: Microsoft, people say, has driven up prices and suppressed innovation. But this is a ticklish argument at best: after all, over the decade of Microsoft's hegemony, computing power has grown cheaper and cheaper. Innovation has thrived. Our software is innovative; it has not been suppressed. On the contrary, more and more people get interested.
Operating systems are the moldy basements of computing. We used to live down there, but are now moving upstairs to healthier quarters. We rely on the courts and antitrust laws to keep Microsoft from abusing its enormous power. We need Microsoft itself to be the universal stepladder that lets us climb out of our hole and smell the roses.
David Gelernter is professor of computer science at Yale and chief scientist at Mirror Worlds Technologies.
culater
ot-Wi-Fi goes to Washington
A new technology could not only restart economic growth but also help connect everyone, everywhere to the Internet—at low cost.
Reed E. Hundt, Stagg Newman, and John E. Richards
The McKinsey Quarterly, 2002 Number 4
Remember when technology-based start-ups were going to put established companies out of business? The surviving incumbents are now having a last laugh. But their schadenfreude may be short-lived in the telecommunications industry because a new technology called Wi-Fi (wireless fidelity) is threatening the business models of the mobile carriers, the phone gear makers, and the providers of high-speed DSL and cable modem services.
Wi-Fi—known among techies as 802.11, a reference to its underlying technology standard—is an alternative means of Internet access. Simply hook up an inexpensive Wi-Fi base station (chip plus transceiver) to a high-speed Internet connection such as DSL, a cable modem, or a T1 line and place this base station within a couple of hundred feet of a house. All users in the vicinity who have a very inexpensive Wi-Fi device in their PCs or PDAs can then share low-cost, high-speed access to the Internet, without having to pay individually for more expensive dedicated DSL or cable modem service.
Even better, with exciting new technologies such as mesh and ad hoc networks, improved Wi-Fi devices could create overlapping Wi-Fi networks in hotels, airports, office buildings, and malls. Strings of linked Wi-Fi networks can stretch through apartment buildings, campuses, and neighborhoods. Forget about digging up streets for fiber to every building or about erecting forests of towers; Wi-Fi can stretch the fabric of Internet connectivity, cheaply and painlessly, over any community to points where traffic is aggregated onto high-speed fiber backbone networks.
Wi-Fi exploits the spectrum used by gadgets such as cordless telephones and microwave ovens—airwaves that haven’t been auctioned or allocated to an exclusive user. This is the proverbial free lunch of spectrum. At last, Internet access can be easy, cheap, always on, everywhere. And Wi-Fi access is fast: indeed, with a fiber rather than a DSL or cable modem connection from the backbone network to the Wi-Fi base station, the transfer speed of Wi-Fi can be faster than the typical speeds of those technologies.1 A fiber connection of this sort would make it easy to download, stream, and swap movies—or vast volumes of corporate data—not only to computers but also to a new generation of flat screens equipped with Wi-Fi chips. Users will be able to make telephone calls by speaking into microphones in their lapels or on the edges of their computer screens. Guglielmo Marconi, the inventor of wireless communication, will have the last laugh on Alexander Graham Bell, the inventor of the telephone.
What’s the rub? Telephone companies could find that Wi-Fi will replace the additional, or "discretionary," phone lines that residential and business customers have had installed to supplement the traditional single "lifeline" connection. That change alone would probably make every telephone company in the United States unprofitable. Mobile carriers too could lose a substantial portion of their revenues (particularly future wireless data revenues) to Wi-Fi networks.
For the mobile and wireline phone companies, the market-based reaction would be to embrace the new technology and extend its applications. But the likely alternative—though one that would poorly serve the economy and consumers—is for those companies to use the power of governments to slow or thwart Wi-Fi’s advance. Already, in Taiwan only communications providers licensed by the government can operate commercial Wi-Fi networks. Some European countries appear to have similar, albeit ambiguous, regulations. Under such rules, Starbucks, which has put Wi-Fi connectivity into many of its shops, may not be able to charge an additional nickel a cup to patrons who want to have the Internet along with their coffee. Meanwhile, in the United Kingdom, regulators in effect prohibited service providers from offering commercial Wi-Fi services but recently took the wise course and reversed this rule, and BT has already indicated that it will offer them.
Wi-Fi might also be squelched if governments decided to favor other industries that use the same radio frequencies. In Florida, one ham-radio operator has gone to court to shut down a Wi-Fi operator on the grounds that the apartment dwellers using this form of wireless Internet access were interfering with his radio. The electrical-lighting industry has petitioned the US Federal Communications Commission (FCC) to permit the use of the spectrum in a way that would create difficulties for Wi-Fi. And satellite operators have complained that Wi-Fi broadcasts will obstruct signals to and from satellites.
Such spectrum battles are chronic at the FCC. Each of them will give the government a choice: to promote Wi-Fi or to restrain it. Even if the FCC sided with Wi-Fi on all issues of competing use, consumers would still have to reckon with the possibility that the government might protect existing communications services by forcing Wi-Fi to meet regulatory requirements for the security of signals and the quality of service. Actually, meeting these standards would be a laudable goal, but it should be achieved through competition and innovation, not government mandates. Imposing such requirements is a time-tested regulatory way of deterring competition and delaying change.
Finally, the biggest risk is simply that the FCC might fail to allocate enough spectrum for free, unlicensed Wi-Fi and its many offshoots. If this new technology sweeps the country and the globe, as experts claim it can, spectrum auctions might become unnecessary to promote competition. Looking beyond auctions for revenues, the US Treasury Department might have to settle for reasonable taxation of a newly burgeoning information sector. But if governments become addicted to auction revenues, they may resist the allocation of free airwaves to Wi-Fiers.
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Change is the elixir of growth in any economy, especially in the high-tech and innovation-driven economy of the United States. Now is the time for the US government to embrace Wi-Fi and, for that matter, many related new technologies. Let inventiveness again lead the country to new plateaus of high growth and to new solutions for the problem of bringing everyone into the Internet age.
culater
Notes:
Reed Hundt, the chairman of the FCC from 1993 to 1997, is now a senior adviser to McKinsey; Stagg Newman, chief technologist of the FCC from 1998 to 1999, is a consultant in McKinsey’s Washington, DC, office; John Richards is a consultant in the Silicon Valley office.
1This approach, however, wouldn’t necessarily cut the DSL and cable providers out of the business, since these companies own most of the backbone networks and would therefore be the natural providers of fiber connections from them to Wi-Fi base stations.
ot-There may be trouble ahead ...
Jonathan Eales [29-10-2002]
The tech sector may be tough, but business goes on. Buyers are becoming cannier in their spending, just as sellers are having to work harder at walking the tightrope between balancing profitability and customer value.
But the good news, according to our recent research of the financial services sector, is that investment in core technology continues to move ahead.
Of 127 IT managers surveyed, three-quarters are making investment in their website their number one priority over the next year. Respondents are also intent on implementing e-business applications and knowledge management tools, at 71 per cent and 62 per cent respectively.
Fewer than one third say that they have any plans to invest in mobile applications. Much higher up the list come e-commerce, customer relationship management, portals and e-procurement.
What we can deduce from these findings? Clearly, the mood among those in the know seems to be cautiously confident. Despite the ravages of the past year, organisations are still putting their faith in core technology to pull them out of the slump.
So where does this leave the seller? To weather the downturn, they obviously have to be aware of the new business reality. This involves not only providing products that can be aligned to real commercial needs, but being clear during the negotiation and contract phase about what is included and what is not.
Users are always on the look out for a good deal, of course, but they also want to see benefits, good service and support.
We should remember that this industry has always been subject to boom and bust, cyclical revivals and flat lines.
At the moment we're in a transitional stage, waiting for technologies like mobile-commerce, wireless and broadband to take off. When they do, we'll see companies developing applications that will push the boundaries of what's new, smart and useful.
So it looks like there's light at the end of this long dark tunnel. Just don't forget any of the lessons you picked up along the way.
culater
ot-Ford puts digital radios in new cars
By Rene Millman [08-11-2002]
Much needed boost for next-generation receivers
Ford is set to be the first car manufacturer to offer digital radios as standard in all of its new cars from next year, in a move that will give the technology a much needed boost.
Commercial radio companies and the BBC have waited a long time for a car company to kit out motor vehicles with next-generation radios capable of receiving many more stations than normal FM and AM models.
According to reports in The Guardian, Ford will offer an in-car digital radio in every model from 1 January, a year earlier than expected.
The radios, made by German manufacturer Blaupunkt, are the same size as normal car stereos and will receive AM, LW and FM stations as well as playing MP3 files from a CD or memory card.
Ford dealers will have a at least one car in their showrooms fitted with a digital tuner so that customers can experience the greater range of stations and compare sound quality with FM.
Up until now many people have been put off of Digital Audio Broadcasting (Dab) receivers because of the high cost, although this has been resolved in part by the recent appearance of digital tuners costing £99.
Many others complain that Dab sounds inferior compared to a good FM radio as broadcasters seek to squeeze as many different stations onto airwaves.
The radio industry is keen to push the benefits of digital radio onto a sceptical public and sees cars as an effective weapon in overcoming consumer doubts.
The Digital Radio Development Bureau has predicted that 300,000 digital radio sets will be in place in the UK by the end of 2003.
Thank you for your e-mail, Bill. Mr. Collier was unable to attend the
meeting. He remains with the company.
Best regards,
Robert Putnam
Senior Vice President
e.Digital Corporation
13114 Evening Creek Dr. S.
San Diego, CA 92128
http://www.edig.com
Phone: (858) 679-3168
Fax: (858) 486-3922
robert@edig.com
By: zacks_a_momo
05 Nov 2002, 08:36 PM EST Msg. 1071055 of 1071073
(This msg. is a reply to 1071049 by lnomeland.)
collier and cocumelli were in the back of the theatre i saw them
they kind of keeping a low profile
http://ragingbull.lycos.com/mboard/boards.cgi?board=EDIG&read=1071055
By: zacks_a_momo
05 Nov 2002, 08:38 PM EST Msg. 1071060 of 1071074
yes they were there
in the back of the theatre
i walked right past them
http://ragingbull.lycos.com/mboard/boards.cgi?board=EDIG&read=1071060
Microsoft's media monopoly
Bill Gates wants to control the delivery of digital entertainment into your home. And according to a lawsuit brought by a pioneering software company, he's prepared to crush anything that gets in his way. First of two parts.
- - - - - - - - - - - -
By Farhad Manjoo
Oct. 29, 2002 / Richard Lang looks out of his lawyer's office at the bright orange Coast Guard cutters clipping the San Francisco Bay. It's a chilly morning in the middle of October, and Lang, the CEO of a video software company called Burst.com, has spent the last hour talking about unfair competition in the software industry and about how he became a victim of Microsoft's vicious effort to dominate digital entertainment. But he's been distracted the whole time, pointing out the choppers and the sailboats. You get the sense that Lang is vaguely embarrassed to be here, that he would rather be out there on the bay, or somewhere else far away, working on ways to improve digital technology rather than explaining why he's suing the biggest company in the industry.
Richard Lang is suing Microsoft because, he says, the company violated Burst.com's patents covering video delivery on the Internet and engaged in "unfair competition" to prevent Burst from gaining a foothold in the market. Lang says that in the late 1990s, as software companies battled each other for dominance in the emerging world of digital media on the Internet, Microsoft colluded with its main competitor, RealNetworks, in an effort to prevent Burst and other firms from entering the market. And then, after it had sufficiently weakened Burst, Microsoft "stole" its intellectual property, says Lang, incorporating in its latest Windows Media Player the video-streaming technology that Burst had developed -- and had shared with Microsoft under nondisclosure agreements -- during more than a decade of research.
Microsoft denies any wrongdoing in the case and has vowed to fight Burst's allegations. Since 1998, Microsoft has been named in dozens of patent-infringement lawsuits, and the company -- which has lost almost none of them -- has suggested that many of the plaintiffs are failed ventures whose claims are at least partly motivated by the attractive target posed by Microsoft and its $39 billion in cash. Burst.com is one such failed venture. The company is still around, but its prospects are far slimmer than they once were, and the main reason for that, Lang claims, is Microsoft's bullying.
There's some debate among insiders in the streaming-media industry over whether Lang has a legitimate, actionable reason to be sore at Microsoft, or whether he is, as a few privately suggest, an opportunistic, litigious hoarder of patents. The courts will have plenty of time to figure that out; his case, which was filed in June, is expected to last -- if it's not dismissed or settled first -- at least until 2004.
But Richard Lang's personal saga -- the tale of how he came to see the future of video on the Internet, to form a company around that vision, and to nevertheless fail to make a bundle on his ideas -- is just a small part of the larger, ongoing fight over who will control media standards in the digital era. It's not hyperbole to say that in the future, when all the media we consume is digitized, the company that controls the media formats and the players to decode those formats will have enormous influence over the culture at large -- and it's no secret that Microsoft would like to have such influence. During the past couple of years, Microsoft has poured $500 million into the Windows Media set of technologies, a staggering sum considering that Microsoft has made no money from the software yet. In some ways, the company is pursuing the same strategy it used so successfully during the Web browser wars, marshaling its formidable resources against competitors and flooding the marketplace with good, free technology -- and perhaps edging very close to the line of what's legally permissible.
Microsoft's misdeeds in the browser fight are well known; they formed the basis of a federal court's decision, in 2000, that the company was a monopoly and had violated antitrust laws. And now it looks as though that misbehavior will form the basis of Burst.com's case. On Oct. 24 in Baltimore, U.S. District Judge Frederick Motz, who is overseeing the preliminary motions in Burst's case, ruled that to prove its case against Microsoft, Burst can use some of the "findings of fact" handed down by the court in the antitrust suit.
Microsoft says that Motz's ruling, which didn't indicate how many of the 412 findings Burst can use, doesn't significantly hurt its chances in the suit. What's clear, though, is this: All the while Microsoft was fighting, in court and in the media, a charge that it was an unfair monopolist, it was throwing its weight around the world of digital media. Microsoft had to make sure, Lang says, that a small firm like Burst couldn't stand in the way of Microsoft's efforts to integrate media delivery into its operating system.
"They didn't want some little company putting a tax on Windows," Bruce Wecker, one of Lang's attorneys, said.
And in the end, Microsoft succeeded. For all practical purposes, Burst has gone bust. Lang maintains that the company is still licensing its technology to set-top box firms in Korea, and that some American hotel chains are providing video through its software. But the company has vastly slashed its payroll and is struggling to stay alive; meanwhile, deep-pocket winners are poised to dominate the future of media. It's not inconceivable that sometime in the next 10 years, all the media delivered to your computer or your digital TV will come in the form of a Windows Media file. And if that happens, we might look back and see Richard Lang's failure as the event that laid the foundation of a proprietary media world.
Few people who watch video on the Internet have ever heard of Burst.com. Even folks who work in the "streaming industry" and call themselves experts regard Burst.com as a relative newcomer to the field. RealNetworks, which became the early leader, and Microsoft, which put a lot of resources into catching up with Real, dominate the delivery of audio and video on the Internet. But Lang says that his company has long had admirers -- including the rock group U2.
In 1990, U2 became minority owners in Burst.com -- then called Instant Video Technologies -- with an investment of $2 million. The band wanted "to give something back to [our] fans," U2's lead guitarist, the Edge, said to the Hollywood Reporter at the time. But the band was also charmed by Lang's long view. In 1983, Lang had co-founded, with Terren Dunlap, a company called Go Video, which sold a then controversial (now passé) dual-deck VCR. By the late 1980s, Lang says, he was certain that videotapes were soon going to become obsolete, "and my focus started to shift to what would follow them." His determination that magnetic tapes would be replaced by electronic pulses of video traveling through networks -- even though such networks at the time were more a pipe dream than a certainty -- attracted investors, like U2, who liked to think big.
The band members and other investors were told that the company didn't expect to become an overnight success. "What we said to U2 at the time was to expect no technology for at least five years," Lang says. He explained to investors that although the company had some grand concepts for video delivery, the specific technologies still had to be invented. Back then, indeed, Lang had no idea that he would be sending video over the Internet -- satellite, cable, online services, and the vague but much hyped 500-channel "information superhighway" seemed the best ways to do it.
In 2000, in an effort to signal to customers that the firm had something to do with the Internet, Instant Video Technologies was re-christened Burst.com. ("Talk about bad timing," Lang says now of the name change.) The firm was named Burst because "bursting," as opposed to "streaming," is central to how Lang, in the early 1990s, determined that media should be delivered over a network as inherently temperamental as the Internet. Lang says that streaming data over a network, the standard way of sending Internet video since the mid-1990s, is conceptually identical to television or radio broadcasting: A video is played at the TV station, the pictures are encoded and pushed over the airwaves in real time, and when they get to your TV, they're decoded and projected onto the screen. In streaming, everything is digitized, and the airwaves are replaced by the Internet.
But Burst.com saw this model as flawed, because the Internet isn't like the airwaves -- it's more like a system of suburban freeways. The route between any two computers changes from moment to moment, becoming free at one instant, clogged the next. Lang's technology recognizes this fluidity -- and capitalizes on it. When the connection between the broadcasting computer and the receiving one is free, the server "bursts" a large segment of the video to the viewer, which can store the extra information on the computer's hard drive. The system is smart and elegant, and it leads to significantly better video -- so good, in fact, that Microsoft, which started out streaming, now uses a variation of bursting in its latest video player.
But Burst.com's media-delivery method did not catch on in the marketplace. The company's researchers spent most of the early '90s researching the burst technology and, Lang says, "building up our patent portfolio." That deliberateness seems to have been Burst's first, and perhaps its pivotal, mistake. Instead of rushing to market with something that worked but wasn't perfect, it waited.
And Burst was upstaged: In the summer of 1995, a Seattle company called Progressive Networks announced it had solved the problem of delivering audio over the Web. Its software, called RealAudio, compressed sound files and "streamed" them over the Internet. The audio quality wasn't very good, and the player often skipped and sputtered over a dial-up connection, but the company, founded by a former Microsoft executive named Rob Glaser, was an instant hit. Many major radio stations and networks soon signed on to its vision of streaming media. (In 1997, Progressive Networks, which by this time was delivering both RealAudio and RealVideo, changed its name to RealNetworks.)
And when streaming became the dominant metaphor for media delivery, Lang says, "that whole momentum that Real created really pushed people off our idea, which was bursting."
The technical differences between bursting and streaming are complex, but at bottom, which you prefer is suggestive of your worldview. A streamer is essentially an optimist, one who believes the Internet is reliable enough to broadcast, in a steady "stream," the thousands of bits of information that compose a video and to get them to their destination relatively intact. When you stream data, you send it in real time: A one-hour video takes an hour to send. By doing this, says Lang, you're implicitly making an assumption about the network. You're deciding that the network works and that it will work for the full duration of the show you're sending.
A burster is a pessimist. Lang doesn't trust the Internet; he sees it as inherently unreliable. You can't count on its being up and at full capacity for the full duration of your program, he says, and "so what we did was say, when there's more bandwidth" -- when the network is not busy -- "you deliver more." You don't wait the full hour to send the show but, instead, send it "faster than real time," transmitting the whole video in the few minutes that the network might be working well.
But the streaming metaphor was more attractive than the bursting metaphor, says Richard Doherty, the director of the Envisioneering Group, a technology research firm. "Everyone loved the word 'stream' because it sounded smooth and dependable," he says. "It's easy to understand. Nobody wanted to use the word 'bursty' media, 'machine-gun' media. People wanted to stream."
The first fight in the development of media delivery on the Internet was over the desktop: Which company's player would become the one that Web surfers first turn to when they download a video from the Internet? RealNetworks took the early lead in that battle, but Microsoft, with its Windows monopoly and mountains of cash, was not far behind. According to the generally accepted history of how the industry developed, the two firms, whose headquarters are just miles from each other, were soon attempting to pound each other out of existence.
Lang disputes that history. Far from being arch rivals, Microsoft and RealNetworks had an understanding with each other, Lang contends -- they would compete, but they wouldn't play too rough. The companies would divide the market, and small companies like Burst would be kept out. This deal, Lang alleges, allowed Microsoft to kill off Burst, causing Burst to beg Microsoft to license the firm's technology. And when Burst opened up its technology to Microsoft's executives, Microsoft took very close notes -- and, Lang says, the burst technology eventually ended up in Microsoft's software.
RealNetworks showed up on Microsoft's radar in the late 1990s, when Real's head start in streaming appeared to be giving it a lead in multimedia that Microsoft didn't appreciate. According to the findings of fact issued by the federal district court in D.C. as part of the Justice Department's antitrust trial against Microsoft, Microsoft saw RealNetworks as a threat to its way of doing things.
"At the end of May 1997, [Bill] Gates told a group of Microsoft executives that multimedia streaming represented strategic ground that Microsoft needed to capture," those findings state. "[Gates] identified RealNetworks as the adversary and authorized the payment of up to $65 million for a streaming software company in order to accelerate Microsoft's effort to seize control of streaming standards. Two weeks later, Microsoft signed a letter of intent for the acquisition of a streaming media company called VXtreme." (The complete findings, which run a breezy 103 pages and from which Burst.com quotes liberally in its complaint, are available here.)
"At this time," Lang says, "the battle for the desktop was on." But his company's strategy for creating its own desktop player quickly fizzled. Burst had built its media player on the Java Media Framework, which Intel had been working with Sun to develop. The JMF, as it's called, was to be a cross-platform player that would play a variety of media formats -- a prospect that Microsoft saw as a threat to the Windows platform. Intel's support for the player was frequently described as a being a sore point between Microsoft and the chipmaker, and in 1997, according to the findings of fact, Microsoft and Intel entered into a deal that led Intel to drop support for the system.
It's probably a stretch to say that Microsoft wanted Intel to drop support for the JMF as a way of specifically hurting Instant Video Technologies. (According to the findings, it was a way of hurting Sun, the main developer of the Java programming language.) It's not clear that Microsoft even knew of Lang or his company at the time, but Intel's move had the effect of crippling Lang's firm anyway. Burst had worked closely with Intel's Java developers, and now that they were "dropping us," as Lang puts it, Burst saw no choice but to abandon its dream of creating a media player. Instead, Lang says, the firm now focused on creating a plug-in to let bursting work on other players.
And for a while, the plug-in idea worked well, Lang says. The plug-in that Burst created for Microsoft's Windows Media player enabled Windows users to get video that looked better than that delivered with Windows Media alone, and it transferred video more efficiently over the network, saving about 25 percent of bandwidth over streaming video.
Lang says that Burst's technology had become good enough that U2 decided to offer its summer 2000 PopMart concerts for free on the Web using Burst's software. In the first six months of that year, Burst made $500,000 in software sales, and it raised $12 million in investments, including $5 million from the phone company SBC. Even Microsoft was taken with the company's technology -- it invited Burst to participate in Microsoft's booth at the National Association of Broadcasters show that year in Las Vegas.
And then suddenly, Lang says, Redmond soured on Burst. Shortly before the U2's concert tour was to begin, Microsoft released Windows Media Player 7 -- and, to Lang's horror, Burst's engineers discovered that the new player didn't support Burst's plug-in.
"They made changes to their code that only affected Burst," Lang says. In its complaint, Burst says that it had "long and frustrating discussions with Microsoft to establish workarounds or other fixes, but Microsoft strategically used its power to disadvantage and delay Burst." As a result, everyone who downloaded the new player couldn't watch the U2 concerts, and Burst was deprived of the first major "showcase" of its technology.
Was the new Microsoft player's incompatibility with Burst accidental, or intentional? Was its timing coincidental, or calculated? According to Lang and his attorneys, the changes Microsoft made to the Windows Media Player were so tiny that they seemed designed to stymie Burst: "It was a surgical change," Lang says. (In its legal response to Burst's filing, Microsoft explained away this "surgical change" by stating: "As a matter of law, Microsoft has no obligation to deprive its customers of technological improvements in order to help its competitor Burst.")
Bruce Wecker, one of Burst's attorneys, concedes that not all of the facts are available yet to prove that what Microsoft did was deliberate. "Because we haven't had discovery in the case yet, we're at a phase where we don't know all they did," he said. If the case comes to trial, said George Frost, another attorney in the case, "we can put their engineers under oath."
End of Part 1. Tomorrow, in Part 2, Burst.com shows Microsoft its "special sauce" under a nondisclosure agreement. Less than a year later, Microsoft's streaming technology looks a lot like Burst's. Read Part II.
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Goliath crushes David
Even as it was fighting its antitrust battle with the feds, Microsoft was already on to Round 2: Winning the streaming-media wars. Second of two parts.
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By Farhad Manjoo
Oct. 30, 2002 / [Read Part 1.]
If Burst.com CEO Richard Lang is right, and his company's video-delivery technology was better than everyone else's, then two questions must be addressed. Microsoft had identified the delivery of digital entertainment as a key market, and it had a formidable foe to beat in that market: RealNetworks. If Microsoft had hoped to catch up to RealNetworks, why wouldn't it have wanted a plug-in that improved its technology, instead of making the new version of its media player incompatible with Burst? And why wasn't it afraid that RealNetworks would get access to Burst's technology instead?
Burst answers those questions with two of its most damaging charges against Microsoft. Lang says that at first Microsoft wasn't fully aware of what made Burst so good. So in late 1999, under a nondisclosure agreement and as part of an effort to get Microsoft to license Burst technology, Burst showed Microsoft the company's "secret sauce," Lang says. The company disclosed technical information that went beyond what was published in its patents.
At least one of those meetings, Lang says, was with Will Poole, an influential Microsoft executive who directed the company's efforts in digital media. "And we could see the light bulbs go off," Lang says of the meeting. "We could see they got it. They understood why Burst was better."
But Microsoft declined to license Burst's technology at that time. Again why would it make that decision, if it was afraid of competition from Real? Lang's most explosive allegation is that Microsoft was in fact not afraid of competition from Real, because the two companies had long ago agreed to divvy up the market. On July 18, 1997, RealNetworks and Microsoft signed an agreement that, according to Burst, was something of a Faustian bargain for RealNetworks: In it, according to legal filings made by Burst, Microsoft essentially agreed not to "target" Real if Real gave Microsoft "veto power" over RealNetworks' software development, including Real's ability to deal with other companies.
According to this theory, then, Microsoft was never afraid that Burst's technology could go to anyone else, because it controlled what Real did. Therefore, it had no incentive to license from Burst.
By the end of 2000, Burst was a company in trouble. "The Nasdaq had begun to implode," says Lang, "and our investors were asking if we were ever going to license to Microsoft or RealNetworks. And it didn't make sense to us or our investors. We knew our technology was quality, but we couldn't see why one of them wouldn't want to sign with us." Lang reduced the company from 100 workers to five.
Burst continued to pursue a licensing deal with Microsoft, and in January 2001, after the firm showed Microsoft benchmark tests done by Approach, a technology company, which proved that Burst was more efficient than Windows Media, Microsoft said it wanted to license Burst's technology. It offered Burst $1 million for all rights "exclusively and in perpetuity" to Burst's software -- an offer Lang considered "a joke." He made a counteroffer, which Microsoft rejected. Negotiations ended.
"They knew we had nowhere else to go," Lang says, "and they left us on the vine to die."
The actual agreement between Microsoft and RealNetworks is secret, so it's unclear what sort of relationship Microsoft had with Real. News reports at the time painted the deal as nothing more than a routine Microsoft investment in interesting technology: Microsoft would gain a 10 percent "nonvoting" stake in the company, and Real would try to push Microsoft's streaming format in its player.
Was the deal between Microsoft and Real anything more than that -- was it "collusion"? That charge will perhaps be the most difficult, and the most important, for Burst to prove. That's because, if the Burst case ever goes to trial, Real and Microsoft's "conspiracy" to keep others out of the market for video streaming will be the only evidence that Microsoft had a motive to appropriate the technology, as Burst says it did, after Burst showed Microsoft the technology under a nondisclosure agreement.
In its one filing in this case -- a motion to dismiss the case based on what it suggests are Burst's flimsy antitrust claims -- Microsoft says that Burst is offering an incorrect reading of the contract it signed with RealNetworks. "The contract was manifestly pro-competitive," Microsoft says, and it "simply does not contain any provision that prevented RealNetworks from dealing with Burst." There was also no provision, Microsoft says, that prevented Microsoft and Real from aggressively competing with each other -- meaning that if Burst's technology really was as good as it says it was, either company was free to license it.
"If there was collusion," says Jim Dessler, a Microsoft spokesman, "that would mean there would be no innovation going on, and innovative companies such as Burst and others would have had advantages." But he suggested that was not the case as, during the past few years, Microsoft and Real competed aggressively against each other, and each "innovated" in the video market.
Dave Richards, RealNetworks' vice president of consumer systems, declined to discuss the Burst.com case, but he listed a number of improvements that RealNetworks had made to its system after the first release, and he said the firm did consider Microsoft a competitor "in certain areas."
Richard Doherty, who follows media development at the Envisioneering Group, also finds the accusation that there was collusion between Microsoft and Real difficult to believe: "I find that hard to justify. I would say that on both the technology and marketing side, that one-upsmanship has been something that everyone has enjoyed. Microsoft and Real have each out-innovated each other more than anyone else could have come close to. And if you look at the people involved on both sides, I don't see that agreement coming from them: from Will Poole and Bill Gates to Rob Glaser and his tech team. If you met Rob Glaser, you'd know that the last thing he'd be involved in is some sort of conspiratorial gentlemen's agreement with Gates."
But Lang says he has no doubt that Microsoft and Real worked together to keep others out of the market. He says that the antitrust trial -- in which a RealNetworks executive testified that he remembered the "cashectomy" Microsoft had performed on Borland software and wondered whether RealNetworks could become such a target -- indicates that Real knew that Microsoft could hurt the company if it wanted to.
The "findings of fact" portrays an aggressive Microsoft: "Microsoft's intentions toward RealNetworks in 1997, and its dealings with the company that summer," it states, "show that decision-makers at Microsoft were willing to invest a large amount of cash and other resources into securing the agreement of other companies" whose work threatened them. (Citing attorney-client privilege, Bruce Wecker, Burst's lawyer, declined to say why, if Burst was arguing collusion between Real and Microsoft, it wasn't also suing Real.)
In December of 2001, about a year after Burst showed Microsoft its "secret sauce," Microsoft announced "Corona," its next version of the Windows Media products. One of the technologies featured in Corona -- now called Windows Media 9 Series -- is FastStream, which, according to Microsoft's first press release on the system, "automatically optimizes the delivery of streaming audio and video to take advantage of the full bandwidth available to the user."
When Lang heard of this technology, he thought it sounded very similar to what Burst had been doing. He looked further into the system, and as he heard more, he says, he got increasingly suspicious. FastStream, he says now, is Burst's technology. "I don't think there's any question they're violating our patents," he said. More than that, Burst alleges that Microsoft incorporated ideas that Burst had given the company that weren't included in its patents. "Even if they didn't copy our sauce," he said, "we showed them the ingredients. They knew what had to be in it. They could say they made their own sauce, but they knew our ingredients."
It's true that Microsoft's FastStream technology does sound very much like Burst's system. Michael Aldridge, a Windows Media exec, described the technology to me. "In previous streaming technology, both ours and anybody else's, when you send out a 200 kb/s [kilobits per second] video on a 500 kb/s network, it wasn't intelligent enough to find out that I had an extra 300 kb/s of headroom," Aldridge said. The new Windows Media is "able to do faster-than-real-time delivery, so more of the file is residing locally than was capable previously. The simple example I would give you as a rule of thumb is, I'm watching a music video. In the first minute of the five-minute video, I might already have the whole thing residing [on my hard drive.] So that even if I lose my network connection I'd still be able to view my content. That helps to iron out some of the irregularities of the network."
Aldridge's description of FastStream, especially his use of the phrase "faster than real time," is almost identical to Lang's description of Burst.
But Aldridge also said that Microsoft had been working on this system for four years and that it had spent a lot of resources perfecting the product. And Bill Gates has said that during the last couple of years Microsoft has spent $500 million on Windows Media technologies -- "which is a lot, even for Microsoft," says Matt Rosoff, who tracks the company for the research firm Directions on Microsoft.
Which leads to another question: If Microsoft was spending so much money on digital media anyway, and ended up with a technology that at least sounds like Burst's, why wouldn't it have just licensed Burst's system? What could have been its reason for "stealing" from Burst -- and would it have risked litigation to do so?
Microsoft didn't comment on the specific intellectual-property claims in this case, except to deny them broadly. "I think it's also important to say, not addressing this case specifically, that you had the bubble in the tech sector which was fueled by unrealistic expectations concerning the value of business and in some cases unrealistic expectations regarding the return on intellectual property," Dessler said. "Now that the bubble has burst, people are looking at ways to mitigate their losses and we're seeing a growing number of patent-infringement suits. Unfortunately that's a part of the business now." He added that Microsoft is an "intellectual-property company, and we respect and understand the value of those rights in the industry."
Why would Microsoft have brazenly stolen Burst's technologies instead of licensing them? "It's our suspicion that they thought they could get it without having to pay," says Burst attorney Wecker, referring to the Real deal. In other words, Microsoft had no incentive to license Burst when it knew that Burst would have nowhere else to turn.
But Burst had a portfolio of public patents protecting the technology -- wouldn't Microsoft have seen that as an obstacle?
"Patents are useful," says Wecker, "but they can be challenged." In other words, Microsoft may have violated the patents only because it thought it could get away with doing so.
According to Mike Madison, a patent expert at the University of Pittsburgh Law School, patent cases are extremely difficult to prove. A defendant usually argues that a patent is not valid, and then if the firm loses on that claim, it argues that its process doesn't violate the patent. Proving that a patent has been violated is expensive and time-consuming, which plays to the advantage of big firms with lots of money.
None of this means that Microsoft is guilty of any wrongdoing. Doherty, of Envisioneering, says that regardless of who holds the patent, what may count is the "implementation of those patents." If you look up the engineering notes at all the firms, he says, "you'll likely see a lot of parallel discoveries. If you deposed everyone you might find that someone in Burst came up with the idea on March 13, and someone in Microsoft came up with it on March 15. Now, Burst is entitled to feel proud, but what usually happens is that even though someone patents something early, the people who make money are the ones who come out with products closer to market."
Did Microsoft have an incentive to violate Burst's patents, though? As a matter of pure speculation, it's clear the company would have had some cause to not care too much about Burst's intellectual property. Not only might the company have felt relatively certain that it would win a patent case, but the stakes are in any case huge.
"Microsoft's strategy is to popularize the Windows Media format," says Directions on Microsoft analyst Rosoff. By most accounts, Microsoft's video formats are already better than open standards already in use. They yield smaller files of higher fidelity than MPEG-2, which is what DVDs and MP3s are coded in, and MPEG-4, which many competitors of Microsoft hope will become the "next generation" format for digital video.
Already, many digital music players and DVD players can play Windows Media audio files, and Aldridge, at Microsoft, says that some DVD players might soon play Windows Media video discs in addition to standards-based DVDs. "I can't imagine people going out en masse tomorrow or even next year to throw out their DVD players to buy new Windows Media DVD players," says Rosoff, "but Microsoft looks at the long run. And in the long run it may be possible."
And the first step in making the format popular for devices is making it popular on the Internet. And the key to making it popular on the Internet is make it stream faster than every other player. But Microsoft's route to that last step, according to Lang and his lawyers, was blocked by Burst's patents.
In the beginning, says Lang, he trusted Microsoft. "This was during the antitrust trial, but despite what everybody said, I had always given them the benefit of the doubt. And you've got to remember they always acted friendly."
But as things started to fall apart for his company, it became clear to him that Microsoft wasn't going to let Burst succeed. "And this company -- we played by all the rules. We'd had the vision early, way early. We did it all by the rules, and even when we encountered all these roadblocks we still went ahead. And in the end we were right -- it was our technology that was the best."
That should have been enough, he says -- but it was not. Which is why he's now here, at his lawyer's office. "If there's such a thing as justice in the business world, we'll end up recouping the value of our technology," Lang says as he looks out at the bay. "Litigation was never our business plan."
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About the writer
Farhad Manjoo is a staff writer for Salon Technology & Business.
http://www.salon.com/tech/feature/2002/10/29/microsoft_media_one/index.html?x
http://www.salon.com/tech/feature/2002/10/30/microsoft_media_two/
culater
Hybrid handhelds
Multifunctional devices may be the future for handhelds, but for now, there are hybrids.
By Dean Takahashi
October 31, 2002
John Mashey would love to combine his laptop, cell phone, and personal digital assistant into one device. This chief scientist and partner at the venture capital firm Sensei Partners in Menlo Park, California, likes to complain about the hassles of today's gadgets. "I want a device that sits on my belt and connects wirelessly to an earpiece," he says. "I hate having three versions of my telephone directory on three different devices."
Mr. Mashey's frustration is not uncommon. The long-promised ultimate, multifunctional handheld isn't here yet, but some hybrids are starting to appear. And consumers are finally able to choose between carrying multiple single-function devices or one combo device.
A dozen new cell phone/PDA hybrids have hit the market this year, to build on last year's launches of devices like the Kyocera QCP 6035 Smartphone and the series of Treo communicators from Handspring. Audiovox, Motorola, Nokia, Research in Motion, Samsung, Sendo, and T-Mobile all have wireless handhelds. Beyond the cell phone/PDA, other types of combo devices are in development, like an MP3 player from Kemco for the Nintendo GameBoy Advance, Tablet PCs from major PC makers like Acer and Fujitsu and sponsored by Microsoft, and full Windows XP handheld computers from startups like OQO and Tiqit Computers. Rumors are also rife that Apple Computer will enter the hybrid business with a cell phone/PDA combo that Sony will build. The number of such devices may be small now, but demand for wireless Internet devices is likely to drive growth.
Consumers are aware of the many devices that have failed in the past--they were poorly designed and suffered from bulky and hard-to-use features. Lower prices, however, are driving this latest round of new devices. The cost for components like semiconductors and displays has dropped considerably. Flash memory, for instance, cost about $30 for 32 megabytes a year ago. Now it's about $15. What's more, chip makers like Intel, MediaQ, Motorola, National Semiconductor, Neomagic, Texas Instruments, and Advanced Micro Devices' Alchemy unit have been at work for several years designing low-cost, low-power chips that are ideally suited for hybrid devices. Another factor is the proliferation of wireless technologies, like 802.11b and Bluetooth, which are making handheld devices easy to connect to each other and, therefore, far more useful for business travelers who take their offices on the road.
"It probably costs $50 for the parts to do the cell phone, and another $100 to do the PDA," says David Carey, president of Portelligent, a market research firm that specializes in assessing costs of handheld computing devices. "The barriers to entry have been dropping," he says, "and the components aren't as complex anymore."
Among the newest companies is Danger, a two-and-a-half-year-old startup in Palo Alto, California. It is selling the Hiptop device, a combination cell phone/PDA that uses the general packet radio services standard to connect at data-transmission rates of 40 Kbps (nearly the speed of a typical analog modem). The company has raised $48 million and plans to target cellular carriers with its Hiptop. (The first taker, T-Mobile, will market the device as the Sidekick.) Danger has built a back-end server infrastructure that allows it to convert any Web page into an image that can be viewed on the Hiptop's 240-by-160-pixel black-and-white screen. It's designed to enable users to access their personal data anywhere within the cell phone's reception area.
Andy Rubin, president and CEO of Danger, says his device has an edge over competitors' products because the company is offering it at cost--roughly $200--to cell phone carriers, which can then resell it to consumers for a low price, or bundle it with calling plans. By contrast, comparable devices from Handspring and Palm sell for more than $500.
Mr. Rubin says the company plans to make money by charging carriers for services that Danger will provide, like back-end processing, Web hosting, and application downloading. Danger might also make money by charging royalties to developers that create software applications for the Hiptop.
His plan may sound highly ambitious and risky, but that kind of business model may be necessary to get consumers to adopt an unproven technology. John Latta, president and founder of 4th Wave, a market research firm, notes that devices priced at $200 or less are far more attractive to the mass market than those priced at $500, and have the potential to sell millions of units more.
By plugging a digital camera into the Hiptop, users can easily snap pictures and email them to friends. Hiptop's processing power is limited, but its battery lasts for weeks because it operates on a slow 24-MHz microprocessor based on the low-power ARM chip architecture. Mr. Rubin says the device gets a boost from Danger's infrastructure, which does the heavy lifting by using servers to do such processing jobs as reconfiguring Web pages to fit the screen format.
The goal is to make businesspeople more productive as they travel, and to minimize the time they waste firing up their laptops and visiting business centers to do simple tasks like finding directions or checking email.
The question is whether consumers will buy the new gadgets. Some of the phones, like Nokia's 9290 Communicator, are heavy and bulky. It weighs half a pound and is about the size of two decks of cards laid end to end, making it tough to put in a pocket and awkward to hold while making a phone call. As for Danger's Hiptop, the device provides only limited connection speeds for now--it may be years before customers can subscribe to high-speed data services known as 3G. "At this rate, I think success is going to be measured in years, not months," says Mr. Carey of Portelligent, which has been testing a hybrid. "They have to retrain people to learn how to use these things in everyday life."
However, new technology and better bandwidth will make these hybrid gadgets more useful over time: in a single year, the price of chip components generally falls 30 percent, while performance increases 60 percent. A year from now, chips like the ARM11 from ARM, a manufacturer of microprocessors in Cambridge, England, will make it so much easier and cheaper to run video over cell phones, that they will make Danger's Hiptop look expensive, says John Rayfield, vice president of marketing at ARM's U.S. division. Color-display prices will fall gradually, too, and in time the quality of the displays and graphics chips will improve, making it easy to use most handhelds to play games that feature high-quality 3D graphics. And users won't need to affix digital camera attachments to their devices; the camera will be built in.
Devices like the Tablet PC are aimed at business professionals who are willing to pay $2,500 for a combined notebook computer and electronic note-taking pad that will fit into a handheld the size of the Compaq iPaq Pocket PC. Consumers will have the full functionality of the Windows desktop, albeit with limited battery life for now, in their pockets.
As broadband wireless services become available, activities like Web surfing and video watching will become more interactive. And shorter-range wireless technologies, like Bluetooth, will make it easy to print documents from handhelds.
In the next ten years, researchers like Vaughan Pratt, a professor of computer science at Stanford University and Steve Mann, a professor of electrical and computer engineering at the University of Toronto, envision "wearable" computers. This will permit computers to become less obtrusive, as computing functions get built into all kinds of everyday objects. The success of these devices will depend on advances in technologies like voice recognition and more flexible displays.
But time is on the side of the hybrids. Prices of semiconductor components are expected to keep declining, and chip makers are learning that performance at all costs isn't cutting it anymore: they're sacrificing performance for lower costs and reduced power dissipation. Of course, an eventual economic recovery will lead to an upturn in the semiconductor industry, and prices will stabilize. By then, consumers may be hooked on these new gadgets.
"Another spin or two of Moore's law, and we should have a single device that is really useful," says Mr. Mashey. "The plethora of devices we have now will be a historical anomaly. They will all be subsumed into fewer devices."
Dean Takahashi is the author of Opening the Xbox (Prima Publishing, 2002) and a staff writer for the San Jose Mercury News.
http://www.redherring.com/insider/2002/10/handhelds103102.html
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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.
http://www.e-insite.net/commvergemag/index.asp?layout=article&stt=000&articleid=CA253107&...
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Solid performer
Hank Lai, Senior Technical Marketing Engineer, Samsung Semiconductor -- 11/1/2002
CommVerge
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.
http://www.e-insite.net/commvergemag/index.asp?layout=article&stt=000&articleid=CA253109&...
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Super stores
John Osterhout, Business Line Manager, Microdrive Products, IBM Storage Technology Division -- 11/1/2002
CommVerge
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.
http://www.e-insite.net/commvergemag/index.asp?layout=article&stt=000&articleid=CA253108&...
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ot-Ultrawideband: the next wireless panacea?
By Nicholas Cravotta, Technical Editor -- 10/17/2002
EDN
http://www.e-insite.net/index.asp?layout=article&articleid=CA250832&doc_id=91862&title=T...
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How to Achieve Digital Nirvana
Downloaders and the entertainment industry will both have to bend a bit on copyright
How can we get to a world where online music, movies, and video are widely available, not just tentative experiments? This tantalizing vision is largely stalled, though not because of inadequate technology. Instead progress is held up by warfare among the entertainment, computer, and consumer-electronics industries with lawsuits and lobbying their weapons of choice. To get to the digital future that will benefit everyone, this has to end. But progress will require some important concessions on all sides.
Consumers, including the folks who've enjoyed free music from Napster and its successors, will have to realize that unless the owners of content get paid, there won't be any content. In the future, digital-rights management, a fancy term for copy protection, will limit what you can do with downloaded music and video--specifically, how many and what sort of copies you can make.
The entertainment industry, for its part, must realize that it cannot use new technology to take away rights that customers have long taken for granted, such as the ability to make copies for personal use. And the leading technology and consumer electronics companies, which have mostly sat on the sidelines afraid to offend either the entertainment industry or their customers, must play an active role in developing new standards. For starters, I think everyone should subscribe to some basic principles for a new digital world.
First, the right of fair use must be preserved. Consumers who buy music or videos should be able to watch or listen where they want, using the player of their choice. That includes the right to copy downloaded music into MP3 players or a TV show into SonicBLUE's (SBLU ) upcoming Personal Video Player. But consumers must realize that fair-use rights are limited. For example, there is no right to give copies of copyrighted material away--Napster-style sharing is just plain wrong, as is making a copy of a CD for a friend.
Second, the entertainment industry has to realize that copy protection can never be perfect. As retailers know, a certain amount of pilferage is a cost of doing business. The trick is to keep the losses manageable. By demanding perfection, the entertainment industry is just throwing up roadblocks to digital delivery. "Hollywood isn't willing to budge even an inch," complains L. Gregory Ballard, CEO of SonicBLUE, which is fighting a lawsuit in which TV studios claim its ReplayTV video recorders violate copyrights by letting consumers delete commercials and transfer recorded shows to other Replay machines.
Making digital-rights management work for everyone is a technical challenge. It is hard to develop a system that allows the downloading of content to different devices but limits the ability to create copies of songs or movies for others. But I'm sure that the smart people working on it can design an effective system.
The best way for this to happen is for everyone to support open standards, openly arrived at. The entertainment industry's attempts to develop proprietary schemes have been disasters. Both the Secure Digital Music Initiative and the Content Scrambling System for DVDs failed when the encryption schemes were quickly broken.
A big question is: Who can lead the effort to develop a sensible approach to digital rights? Consumer-electronics companies have no history of cooperative standards efforts and a long tradition of format wars. Microsoft (MSFT ) clearly wants to lead, but too many others fear the colossus of Redmond's real goal is to extend its Windows monopoly to rights management. The best candidate might be chipmaker Intel (INTC ), which has taken a strong public stand against the entertainment industry's more extreme positions while working alongside it, particularly with AOL Time Warner (AOL ), to develop hardware solutions.
In the end, both consumers and industry will have to give up something to get a lot. Consumers will lose some freedom to make copies, but will gain much richer online choices. Industry will give up some control and will have to accept some losses to piracy, but could gain vast new markets--as it did after the Supreme Court rejected its attempt to bar the sale of VCRs. It will take some time and a lot of goodwill, but the result could be a win-win outcome.
By Stephen H. Wildstrom
http://www.businessweek.com/magazine/content/02_44/b3806034.htm
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Computer chips & next generation telemetry
Jason Thibeault takes a look at how smart computer chips could change the concept of telematics, as we know it. (10/28/2002)
When we imagine the ubiquity of Telematics, we have to imagine a future where technology is not "in our faces." Our computing lives are no longer dominated by the Personal Computer, the Mini Tower, the PDA, or even our mobile phones. We think less of accessing a "computing device" when we want information and more about accessing a software application to accomplish our task. In this future computing is so pervasive, so transparent, that we are not limited by the how we access.
Unfortunately, what we have now is so far from that-like the difference between building with Lincoln Logs™ and LEGO Mindstorms™. I have written about this future before ("Telematics - Driving in Your Home," and "Telematics 2") but only out of whimsy. That is, until now. As technology has become smaller, faster, and more flexible, our ability to link technologies together to create "networks" and "platforms" of connectivity (embedded into almost everything we touch-from books to ATMs to our cars) is becoming more of a reality. Companies like Equator Technologies, Inc. (www.equator.com) are developing single-source chips-embedded technology that is soft-coded rather than hard-coded built upon open, industry-standard operating systems like Linux-which will make Telematics (and other technologies) as transparent as the chips that control the timer on our coffee machines. Other companies are building the communication backbones to provide connectivity for such "master chips". SiGe (www.sige.com) is developing an ultra-low power and small-footprint communications chip (such as GPS, Bluetooth, and wireless) capable of integration into any "front-end" device (like a PDA or car).
Equator Technologies manufacturers two chips, the MAP-CA™ and BSP™-15 DSPs. According to their website, these two chips "move the central functions of digital imaging, communications, and media applications into software, enabling a revolution in product functions, flexibility, and time-to-market." Of course, this is a fundamental departure from traditional electronics manufacturing where the functionality has largely been embedded within the hardware. Look at DVD players and video camcorders-there is no way for the consumer to improve upon the playback, aspect ratio, or resolution because the video algorithms are hard coded into the hardware technology.
According to Jean-Luc Droitcourt, Director of Marketing for Equator, this is a "fundamental shift in the approach to developing chip technology." The BSP™-15 DSP has an integrated CPU as well as the ability to implement any number of operating systems (i.e., Linux or Windows CE). "This means everything is downloadable," says Jean-Luc. "If a new video algorithm is available it can just be downloaded. The software controls everything, not the hardware."
SiGe's forthcoming product, PointCharger™, is a highly-integrated GPS receiver with a complete receiver chain in a 4mmx4mm package. It has less than a 10ma power draw, which is 1/3, the current draw of its competitor products. Combined with SiGe's ST Micro Baseband, this becomes a complete GPS solution-antenna, processor, and receiver-in a 4cmX4cm package, which is significantly smaller than a Compact Flash or SD/MMC card.
According to Geoff Haynes, of SiGe, "this product brings a significant improvement to the current GPS solutions in terms of sensitivity. Our PointCharger product is 10% to 15% more sensitive than the GPS technology currently in cellular phones and other devices." And, like Equator Technologies, SiGe is looking to software vendors and partners to provide critical components. "We are partnering for the RF and Baseband software, looking for suppliers that have written applications for similar architectures.'
It is easy to see how these two technologies could integrate to create an extremely small, totally self-contained computing platform-processing, video output, and communications. And, how they might benefit the telematics space. For those with little imagination, there is the obvious-infotainment. Equator's chip, integrated with onboard entertainment such as in-dash navigation systems, in-seat LCDs, etc, could promise low-cost alternatives to today's expensive systems. Their single chip could control a broadband network running throughout the entire car providing DVD playback, MP3 playback, hands-free mobile video conferencing, and a host of other video and audio-based services. SiGe's chip could then power the communications infrastructure, providing not only location-based services (through the in-dash GPS navigation system), but also other types of voice (and voice-less) communication.
And, because both are largely software based, when new video processing or more sensitive GPS software becomes available, it can simply be downloaded and updated without the expensive cost of hardware replacement-perhaps even wirelessly.
But it's beyond that obvious application where the "platform" bodes the most promise. The BSP™-15, because it is a "totally self-contained computing environment" is flexible enough to support a number of different systems-entertainment, safety, security, environmental, etc. For example, cameras attached to the car's rear-view mirror could analyze the iris and pupil reaction to light, setting off an internal alarm when the driver is about to fall asleep. Additional cameras on the front bumper could analyze road conditions hundreds of feet above. With billions of processes per second, advanced video software could analyze potential hazards and offer navigational corrections (or even make slight adjustments in steering). Integrated with SiGe's communications technologies, there is countless information gathered from the BSP™-15 that could be communicated to a variety of sources. For example, in the case of the iris and pupil reaction analysis, when a driver is about to fall asleep, authorities could be notified of a pending accident. But, SiGe's PointCharger™ product (and future iterations) could also be used to connect the car to a wireless network of connectivity-from Bluetooth to 802.11b. With new VoIP (Voice over IP) technologies, all cars could have voice-enabled technologies without cellular signal.
Equator's and SiGe's integrated, low-power chips seem promise the flexibility that OEMs have been looking for as well as portend unlimited opportunities for the future. Not only do these two chips provide for audio, video, and communications. A combination of chips like these could become the backbone for all computing services within the automobile and yet remain open enough for third-party providers to create innovative applications.
According to Thilo Koslowski, the Lead Automotive Analyst for Gartner/G2, this is exactly where things are headed. "OEMs are looking for Telematics technology that provides users applications while they are driving," he says. "Some of the (OEMs) are beginning to realize that Telematics is about providing a valuable service, not about making money." Mr. Koslowski's opinions are borne out by Ford's recent closing of Wingcast. "The future of telematics is not in providing user's content," says Mr. Koslowski (although GM would probably disagree), "but in providing them value through applications."
Mr. Koslowski, Mr. Droitcourt, and Mr. Haynes share the same fundamental opinion-that technology like Equator's and SiGe's chips will enable the automobile to become a "node" on a larger IP-based network. And as we have come to expect from our networks, there is no limit to what we can access-video, audio, voice, and text. The car, just like the PDA, will simply become a "platform" for accessing information and services through innovative and valuable applications (in this case, Telematics). In some cases, that information will be road conditions or GPS location. In other cases, that information may be movies or satellite radio.
Of course, it's unclear if technology like this will ever make it into the supply chain. Although both the BSP™-15 and PointCharger solutions portend the birth of a "platform," they also requires the OEM to radically alter the infrastructure of the car-if chips like these are to become the central computing component for all the car's electronics, then it requires an entire re-tooling of the onboard systems. That, of course, equates to investment on the part of the OEMs.
Regardless, though, of how much it costs to implement, we have finally reached a point within our technological advancement where the promise of transparent ubiquity can be realized-embedded chips covering all aspects of computing (processing, connectivity, and storage) with flexible enough structures (open operating systems such as Linux) to allow service providers the ability to deliver value-added applications, rather than convince consumers to buy a new piece of hardware.
All that's left now is to watch, wait, and hope that automotive and other electronic OEMs put aside their Lincoln Logs™ for a much more expensive, but ultimately beneficial, computer system from LEGO
http://www.telematicsupdate.com/homepage2.asp?news=32958
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ot-Speech Recognition Efforts Target Consumer Electronic Apps
By Mark Long -- e-inSITE, 10/25/2002
Fonix and NEC, as well as Clarity and Dspfactory, are developing collaborative efforts for improving the speech recognition capabilities of devices targeting consumers.
Fonix has announced the development of Speech Interface Software technology that will run on 64-bit MIPS-based microprocessors from NEC. Both the processors and software releases are targeted at automotive applications such as cell phone dialing, navigation systems, Internet access, climate control and entertainment functions.
Designed to provide "hands-free" control over automobile functions, the Neural Network Technology from Fonix has been designed to enable accurate speech recognition in noisy environments. According to the company, the technology does not require the user to train his or her voice to the system. The neural network architecture also offers support for DSP-type instructions for enabling greater speech functionality, reports the company.
Targeted at embedded systems designers, NEC's 64-bit NEC's VR4122 and VR4131 microprocessors are based on the MIPS architecture. Both forward code-compatible and highly scaleable, the processing chips have also been designed to permit application software to be used across the board with only minor modifications. NEC's VR4122 and VR4131 microprocessors are already in mass production, and Fonix' Speech Interface Software is also available right now.
Clarity LLC and Dspfactory have entered into a strategic partnership under which the two companies intend to improve the clarity of audio communications in a wide range of portable communication devices. The joint effort will combine Clarity's Clear Voice Capture (CVC) software with Dspfactory's BelaSigna chipset. The combined offering will be targeted at designers of PDAs, cell phone and mobile hands-free systems.
Clarity's CVC technology has been designed to lock onto the speaker's voice, separating it from interfering background audio clutter while optimizing the user's ability to communicate with any enabled portable device. Dspfactory's BelaSigna provides the analog/digital signal conversions after which the low-power chipset's WOLA DSP filterbank slips into high gear.
"Dspfactory has developed a unique chip that is a fraction of the size of a person's smallest fingernail, yet delivers the signal processing capability to enable powerful software solutions like Clarity's CVC technology that improve clarity and intelligibility," said Clarity president and CEO Raymond Gunn in a statement. "Clarity expects to deploy this technology with many of its customers' applications and develop products with other Clarity Partner Program members to create intelligent microphones for many consumer products."
http://www.e-insite.net/index.asp?layout=article&articleid=CA255060&title=Article&spaced...
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ot-Airlines set to install inflight e-mail
Mile-high Web access could help airlines boost revenues
By Ron Lieber and J. Lynn Lunsford
THE WALL STREET JOURNAL
Oct. 24 — Airplane flights, perhaps the final refuge for travelers who want a break from their e-mails, are about to get connected.
AFTER YEARS OF ordering passengers to go offline upon takeoff, a number of airlines are set to make it possible to e-mail or even surf the Internet while mile-high. Early next year, Lufthansa will become the first airline to offer high-speed Internet access to passengers. British Airways will follow suit soon after. Both carriers will be using Connexion, a major new Boeing initiative. It should also help the beleaguered airlines boost revenues, since they typically get a cut from such services.
Meanwhile, the old GTE Airfones that now often sit ignored in the seat backs on airlines such as United and Delta are getting substantial upgrades. Last month, Verizon, which now owns GTE, started rolling out JetConnect on carriers including Continental Airlines. The service allows passengers to plug their laptops into the Airfones and play games or send instant messages. Airfone plans to eventually add high-speed e-mail to the mix.
JetConnect currently is priced at a flat fee of $5.99 for the entire flight, which is notable given that Airfones have long gone unused because of their stratospheric prices. A typical Airfone call costs nearly $4 a minute.
The airlines are launching the services at a time of widespread disregard for the airline rules that prohibit the use of a range of gadgets, from cellphones to BlackBerries. The Federal Communications Commission bans cellphone use on airborne commercial flights. The FCC hasn’t banned BlackBerries, but the Federal Aviation Administration advises airlines not to allow them, either, lest the gizmos interfere with a plane’s own electronic systems.
But many BlackBerry users — some so addicted to instant e-mail gratification that they refer to the device as “Crackberry” — check in with impunity while flying because they know they usually won’t get caught. Many have figured out that the machine can work quite well up in the sky, even at cruising altitude. (One dirty little secret: It may help to point it out the window.)
Cellphone use aloft isn’t uncommon either. Last Friday, in fact, an afternoon flight on Southwest Airlines from Houston to Dallas was forced to abort its landing twice and return to Houston when the navigation equipment stopped functioning properly. On a hunch, the pilot asked the flight attendants to see if anyone had been using cellphones — and found two.
The pilot made an announcement that the flight’s problems were probably due to the cellphone use. However, the airline didn’t attempt to have the two offending passengers fined, according to a spokeswoman, because they complied with the flight attendant’s request to shut them off.
“I’m an easy-going person when it comes to human foibles, but there were several people on the plane who wanted them arrested,” says Evelyn Biery, a Houston bankruptcy lawyer who was on the flight.
Airlines and the government threaten fines of $1,100 for breaking their rules. The penalty can jump to $25,000 for people who argue about it and get into an altercation.
But enforcement is spotty at best. Flight attendants have particular trouble telling whether a BlackBerry is set to transmit — which is prohibited — or whether the user is simply tapping out an e-mail and saving it to send later. It’s “part of the huge dilemma we are beginning to face,” says a United spokeswoman.
In fact, it’s often fellow fliers, not flight attendants, who sound the alarm. Last year, Jason Saul, a Chicago software executive, was using his BlackBerry as his United flight was preparing to take off. A nearby passenger spotted him and started yelling that he would make the plane crash. Ultimately, the flight was delayed slightly. “We want to err on the side of safety and make absolutely sure that the threat does not exist,” an airline spokesman said.
One reason the BlackBerry works pretty well up in the air is that it needs only a short burst of time — a few seconds or less — to collect a bunch of e-mails and send some off. A cellphone, by contrast, needs to stay connected for the entire length of the call.
There’s been little research to back up the airlines’ precautionary safety measures. A government study at the University of Oklahoma (conducted by a group that’s partly funded by the wireless industry) looked into whether cellphones can interfere with some plane systems, and concluded they don’t. However, separate research by U.K. regulators tested two parked planes and found that cellphones might cause interference.
John Sheehan chaired a 1996 study that examined gadgets such as laptops and game players on planes — but not cellphones or e-mail devices. While his study found little likelihood that the devices will harm a plane, he has no doubt that it could happen. Should airlines allow people to use BlackBerries in the air? “Absolutely not,” he says.
An official at BlackBerry’s parent company, Research in Motion, says it encourages customers to follow airline rules.
Boeing’s Connexion service uses satellites to send and receive data from Web surfers onboard the aircraft. Passengers will be able to plug their laptops directly into seat-mounted jacks. Boeing claims the hookup will be simple enough that anyone can do it. But just in case, the first few flights on Lufthansa and British Airways will have techies on board. “We hope — and the flight attendants hope — that they will be left out of the service loop,” a Connexion spokesman says.
Lufthansa will offer the service at first on a Boeing 747 running between Frankfurt and Washington, D.C. British Airways plans trials a month later.
Boeing and the airlines are still working on the most critical part of the puzzle — pricing. A Boeing official says surveys suggest that travelers would be willing to pay $25 to $35 for access on a flight of about seven hours.
The JetConnect services aren’t as technologically sophisticated as Connexion yet. In fact, it isn’t a live Internet connection, but a server on the aircraft that has news and other information stored on it, which is updated every 15 minutes.
Copyright © 2002 Dow Jones & Company, Inc.
All Rights Reserved
http://www.msnbc.com/news/825345.asp
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MPEG zooms in on new video codec
A new compression format for digital video is turning heads over claims that it can deliver DVD-quality broadcasts on the Internet using fewer network resources than rivals.
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 fewer network resources than rivals.
Created in a unique partnership between U.S. 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 by Friday any patents they believe cover the H.264 format. 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 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.
Although 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 realized 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 that seek 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 offers, 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 problems for consumers and companies forced to keep track of multiple formats.
H.264's pending approval could motivate some 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.
Though 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, CEO 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."
http://www.businessweek.com/technology/cnet/stories/961707.htm
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No Tapes, No Discs, No Top-10 Limit
By J. D. BIERSDORFER
AKING control over what you listen to — and for how long — is a tremendous power bequeathed by today's car audio systems. For example, there's the cross-country trip. Not long ago, drivers traveling coast-to-coast used to risk being trapped in an AM radio world of hog reports and local bank commercials between Dave Dudley's trucker songs. Needless to say, things have improved. Computer hard drives have melded with car stereos and even the humble radio has joined the space age.
Imagine a single compact disc with enough music to let you drive from New York to Ohio without hearing the same song twice. CD's recorded with music encoded in PC-friendly digital audio file formats like MP3 or Windows Media Audio can hold 10 to 20 hours of tunes on one disc.
But not all dashboard CD players can play these types of discs, which can be easily created with a CD recorder and music-management software on a computer. Now several manufacturers — including Alpine, Kenwood, Sony, Pioneer and Panasonic — are offering one or more dashboard console receivers (referred to as head units) that can play traditional CD's, MP3 CD's — and even satellite radio — for less than $300.
And some high-priced head units add more sonic gizmos — even pictures in some cases: the Sony MEX-5DI CD/MP3 receiver (about $1,000; www.xplodsony.com) has a full-color flat screen that displays still or moving images and also sports a Memory Stick (Sony's own pocket-size memory card) slot so the driver can upload personal favorite pictures from a digital camera or computer to the CD tuner.
A regular CD can hold 700 megabytes of music, but if a mere 10 or 20 hours of continuous tunes are just not enough, there are other options that offer 500 hours in a row (or more) of music. Last fall, a company called PhatNoise released its own PhatNoise Car Audio System (about $800; www.phatnoise.com), a digital audio jukebox designed to work with many existing head units already installed in the car. PhatNoise also provides customized versions of its product for other audio companies like Kenwood's Music Keg.
PhatNoise-based systems can provide at least 500 hours of MP3 music (and even more in the Windows Media Audio format) on palm-size 20-gigabyte cartridges. The cartridges, which also come in 30- and 40-gigabyte sizes, can be taken out of the PhatNoise car system and connected to a computer with a U.S.B. cable. PhatNoise also provides music-manager software, which offers a guide to converting audio tracks from CD's into MP3 or Windows Media Audio files and to designing customized playlists. In addition, the company recently announced a deal with Audible.com to provide subscriptions for audiobooks and other types of spoken-word content to PhatNoise owners.
The Neo Car Jukebox by SSI America (www.ssiamerica.com) is another variation in the hard-drive-based car stereo MP3 player category, although in this case the whole unit slides out from under the dashboard and can be attached to a home stereo system, Windows-based PC or Macintosh computer. The Neo Car Jukebox comes in three storage capacities: 20 gigabytes (about $400), 40 gigabytes (about $480) and a whopping 80 gigabytes (about $530) and are respectively capable of holding 400, 800 and 1,600 albums in the MP3 format.
Long before MP3 playlists or even Beatles/Stones-mix tapes, radio ruled the road. One of the first affordable car radios was the 5T71 model by the Galvin Manufacturing Company. The 5T71, which cost about $120 at the time, was introduced around 1930. (While the product name was not memorable, the company soon came up with a brand name that better combined the notions of motion and sound: Motorola.)
Because AM and FM radio signals are broadcast from land-based towers, they have a limited range. A satellite radio system, on the other hand, beams its signal to the ground from space — which means that a driver could travel from Boston to San Francisco without having to change the station. The two main content providers are XM Satellite Radio (www.xmradio.com) and Sirius Satellite Radio (www.siriusradio.com), which charge a small subscription fee for monthly service.
THE fee includes access to dozens of commercial-free music channels in a variety of genres, but to get the signals a car needs a satellite radio antenna and a receiver. Many satellite-radio-ready head units are already available, and Alpine Electronics (www.alpine-usa.com) recently released its XMA-T200RF Universal XM Satellite Radio Package (about $300), which can also add XM radio to existing automobile sound systems.
Head unit prices generally do not include speakers, amplifiers or antennas, which can increase the overall cost by several hundred dollars. For neophytes wanting to price a system, the Car Audio and Video link on the Crutchfield Web site (www.crutchfield.com) provides a wealth of information. The site even offers an interactive questionnaire for the prospective buyer to find stereo systems available for a specific make and model of a car.
Although the new technology in car audio systems may seem overwhelming at first, the options abound. Any of these systems allows you to have more control over what is streaming through the speakers; best of all, you may never have to hear another low-budget mattress commercial again
Copyright The New York Times Company
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My Car Sounds Better Than Yours
By DAVID F. GALLAGHER
OME car owners can spend hours getting their fingers dirty under the hood. Robert Bean is more likely to be in the trunk, tweaking the PC that powers the custom-designed MP3 audio system in his 1996 Mitsubishi Eclipse. Mr. Bean, a junior at Texas A&M University, has a giant control screen built into his dashboard and enough music on the computer's hard drive for nine days of nonstop driving.
Hardware fanatics like Mr. Bean, dissatisfied with the features or the prices of commercial MP3 products, have made a hobby out of patching together digital audio systems from used or mail-order parts. Many of these enthusiasts show off their creations and share technical tips on the Web, fostering an online subculture that is both collaborative and competitive.
Typical members of the subculture are not gearheads — they seem more interested in how fast their PC boots up than in their engine's performance. Besides, customizing computers rather than cars is cheaper. "I would like to add a turbo to mine," Mr. Bean said, "but that starts at about $2,000, which is twice as much as the computer cost."
Ryan Veety, a 22-year-old computer programmer in Middletown, N.Y., said he spent hundreds of hours on the MP3 system in his 1993 Eagle Vision, which is described in minute detail on his Web site, www.ryanspc .com. When he started working on the system four years ago, there were no MP3 products available for cars. "I started out simple — it was just the guts of a standard PC laid out in the front seat," he said. "Everything was originally built from spare parts I had around the house."
Mr. Veety has upgraded his system, accumulating a small heap of audio and power equipment in the spare-tire well of his trunk. Last spring he added what is now a necessary feature for car MP3 fans. A wireless link allows the PC in his house to talk to the PC in his car, making it easy to transmit music files to the car's hard drive. "As I buy CD's, I convert them to MP3 at home, then download them to the car in the morning before I leave for work," he said. Transmitting one CD takes about five minutes.
Mr. Bean has a similar wireless link in his Eclipse, but it is the control panel on his system that has won him admirers online. He built a 10-inch laptop screen into his dashboard, just above the gearshift, and took weeks carefully molding and sanding the fiberglass around it to make it look factory-installed. The effect, as seen in his photos on www.arbytech.com, is as if a car from the future were teleported into the present. Mr. Bean is working on getting the screen to display album covers and even driving directions, in addition to the touch-screen music controls it has now.
There are links to more than 400 descriptions of similar projects on a site called MP3Car.com, a hub for car-audio hackers. On the site's message board people wrestle with issues like how to supply power to electronic parts that were not meant for cars. Mr. Veety said that although interest in custom setups had waned recently as commercial options have increased, the underground would live on. "All the nongeeks have been buying manufactured units, but the die-hard tinkerers will always think they can build a better one," he said.
Geoff Hurley, a programmer in Arlington, Va., said there were other, less tangible reasons to do it yourself. His 1996 Jeep Grand Cherokee Limited, which he has dubbed the LinuxJeep, has a PC inside that runs the Linux operating system to power his MP3 player. On his Web site, www.throb bingbrain.com/linuxjeep, he responds to people who wonder why he does not just go out and buy a commercial product.
"It's not about specifications," he wrote on the Web site. "It's not necessarily about appearance, cost or convenience. It's about creativity and pride in your own work. . . . The beauty of the LinuxJeep is that there is no other in the world quite like it."Copyright The New York Times Company
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ot-Fliers may soon get to use cell phones
http://www.usatoday.com/tech/news/techinnovations/2002-10-22-air-cell_x.htm#
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thanks,gern
Is this new-wedigmusic-BMG Music Service-12 CDs for the price of one-
http://www.wedigmusic.com/index.html
http://www.specialoffer.com/bmg/welcome.cgi?affilID%3d14056&sourcekey%3dMKNDF&AID%3d5677474&...
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Peer-to-Peer Music Trading: Good Publicity or Bad Precedent?
Advance publicity is key to record albums’ success, states Wharton marketing professor Peter Fader – and by trying to stamp out peer-to-peer music trading, record companies are shooting themselves in the foot.
In a new paper entitled “Using Advance Purchase Orders to Forecast New Product Sales,” Fader proposes a statistical model for using advance orders to predict future sales of albums. His results lead to a clear conclusion: “The more buzz you generate, the more you sell,” he says.
Fader’s thinking is controversial. Many people, including the record companies, disagree with the idea that peer-to-peer music networks like KaZaA, Gnutella and the now-departed Napster do more to boost record sales through creating buzz than they do to depress them by replacing buying with downloading. Fader says music downloading is a “form of advertising” – and that music companies should shift from making an album just a “collection of songs” into making it a gateway to a complex, multilayered entertainment experience.
Fader says he is troubled by the logic behind the new “Music United” ad campaign, in which leading artists cajole music listeners to stop downloading unauthorized MP3 files. “Artists standing up saying, ‘Don’t download our music,’ is really the same as movie stars saying, ‘Don’t watch our previews,’” he notes.
Whether file-trading hurts CD sales is under heavy debate. The pro-file-trading side (including Fader) argues that file-trading creates positive buzz, driving even hard-core downloaders to head out to the music store for higher-quality, more-reliable copies of their favorite songs. The anti-trading side says that cheap MP3 knockoffs of popular songs keep consumers away from the record stores, especially when the MP3s can be burned to CDs.
“I know several studies which seem to support the idea that” the buzz the record companies get is greater than the loss caused by theft, says Ron Rodrigues, editor in chief of Radio & Records magazine, adding that he is aware of only one study stating the opposite.
That one study was commissioned by the record industry and conducted this May. It concludes that “by more than two to one, consumers who say they are downloading more are also purchasing less.” This has led the Recording Industry Association of America, the record industry trade group, to blame the 7.2% drop in CD sales over the past year on downloading.
But an August 2002 study by Forrester Research argues that “downloads save the music business.” Forrester found that even hard-core digital music downloaders only plan to reduce their CD purchases by 2% in the next 12 months, and that the larger digital-dilettante sectors actually plan to increase CD purchasing.
So what’s responsible for the CD slump? Forrester blames the recessionary economy: “Hello … you buy less stuff in a recession,” Forrester analyst Josh Bernoff says. Bernoff also cited competition for entertainment dollars by the booming DVD industry (with sales up 80% in one year), and a stranglehold on radio playlists by conglomerate Clear Channel, preventing Americans from hearing new or different music.
“My personal opinion is that I believe it’s either a wash, or that the buzz created by file trading is beneficial to the record industry,” Rodrigues says.
Boosting Niche Categories
While Fader contends that peer-to-peer trading can help all artists, Wharton marketing professor David Schmittlein says Internet-based buzz is only helpful for niche categories of music that don’t get much play in the mass media – world music, traditional music, and unknown artists, for instance. Schmittlein plays down the importance of Net word-of-mouth in promoting mainstream pop – the most frequently downloaded albums, but also the ones that get the most publicity in other venues.
“The Internet is especially helpful where there’s kind of an affiliative group that is somewhat established and would likely be on the Internet networking as a group anyway,” he says.
According to Wharton marketing professor Josh Eliashberg, who studies the movie industry, the question at hand isn’t publicity, it’s control. Movie studios are terrified of their films getting out over the Net, but they still run advance “word of mouth” screenings to promote buzz. The studios can control who sees those screenings in ways that they can’t control free trading on the Net.
Similarly, experts say comparing peer-to-peer music trading to other promotional vehicles such as radio is false; after all, music companies can control which tracks get out to radio. “We’re starting to see more and more movies screened one to two weeks prior to the national release, but that’s different from letting the whole movie loose over the Net,” Eliashberg says.
The record companies agree. “We never said that there is absolutely no promotional value to peer-to-peer networks,” protests Jonathan Lamy, spokesman for the RIAA. “But the choice [to make music available] should be made by the copyright holder, the artist, the record label, the people who created the actual product – not by someone else.”
Record companies have been offering some tentative stabs at legal online music services, offering ‘teaser’ tracks on band web sites and streaming top hits over AOL, efforts that Lamy calls “experimental.” Slowly, ever so slowly, record labels are starting to agree that online promotion can matter, according to Sean Ryan, president of legal music site listen.com.
“Where nine months or a year ago the labels were overly concerned about the cannibalization of record sales, they’re really starting to look at these types of [online] promotion as a way to drive awareness and drive sales,” he says.
By keeping control over its product, the music industry is just trying to ensure its business model remains intact, Bernoff states, adding that downloading rocks the commercial boat, upsetting assumptions about the value of having a middleman between an artist and a listener. “Once they are not in control of their content, all sorts of questions arise about, ‘Who needs a music company?’” he adds.
An Integrated Entertainment Experience
Fader has a prescription for how to solve the ‘problem’ of downloading: make albums more than just collections of songs, and make record companies providers of an integrated entertainment experience. He holds up as an example the new Bon Jovi album, “Bounce.” Legal purchasers get access to an online club offering bonus tracks, a fan club and special advance concert ticket sales. A few other bands, such as Gorillaz, have also tried this route. “Tie together the different revenue streams – concert tours, merchandising, any way to extract value from the artist,” he says.
Matt Graves, spokesman for listen.com, offers another option: make legal downloading more attractive than illegal downloading. Peer-to-peer, he points out, is a pain in the butt. A search by Knowledge@Wharton concurs: While seeking a range of recent albums on the Gnutella file-sharing network, our reporter found plenty of download delays, unreliable sites, bogus files planted by the record labels, and impossible-to-find tracks.
“People pay for a lot of things that they could get for free; bottled water is doing so well that Coke and Pepsi have rolled out water products. You have to make it easier and more enjoyable to pay a little money than it is to steal,” Graves says.
To that end, listen.com’s Rhapsody service provides a wide range of music of guaranteed quality, with track and album information missing from the peer-to-peer services and expert human guides suggesting new tracks, for $10 a month. That makes Rhapsody the best of the legal services so far, according to Fader.
But even Rhapsody doesn’t have what it takes, because record companies still demand too much control, according to Forrester’s Bernoff. He has established a three-point “bill of rights” that legal music services need to meet to beat the illegal file traders. While Rhapsody does well on the “right to find content,” their subscription-only policy denies the “right to pay as you want” and they don’t support transferring songs to portable devices, eliminating a “right to control music” that even the RIAA admits consumers have.
Vivendi Universal’s eMusic, another service that has gotten high marks, fails in other areas. While eMusic offers the right to control music, it’s been treated as anathema by control-hungry major labels, and thus can only offer independent artists. “People do want to buy music under the right conditions,” Bernoff says. “But the difference between what we have now and what people want is so great.”
Fader agrees. If the music companies loosened up a bit, he says, they could make some serious money online. “People are willing to pay a flat fee to have access to music. Let people pay $15 a month and just let them get access to all the songs, to do as much as they want. The revenue stream,” he notes, “would be tremendous.”
http://knowledge.wharton.upenn.edu/articles.cfm?catid=4&articleid=635&homepage=yes
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2003 CES Takes to the Fast Lane with the Latest Mobile Technology
--------------------------------------------------------------------------------
San Francisco, California 10/15/02
Mobile industry gurus looking to find the hottest products and technology to hit the mobile marketplace need to look no further than the 2003 International CES, the world's largest consumer technology tradeshow and the largest mobile technology tradeshow, January 9-12 in Las Vegas, Nev.
"Whether it's GPS, IDB, vehicle navigation, car audio and security, radar detectors or satellite radio, CES is the place to catch the latest developments in mobile electronics," said Karen Chupka, vice president of events and conferences for the Consumer Electronics Association (CEA), the producer of CES. "During CES' four days in January, the North Hall of the Las Vegas Convention Center is transformed into a mobile mecca of the hottest in-car technology to hit the industry. The who's who of the automobile industry attend CES including retailers and manufacturers such as Ford and General Motors."
More than 270 mobile electronics companies plan to showcase their products on the show floor including Alpine, Blaupunkt, Clarion, Delphi, iBiquity, Kenwood, Mitek, Motorola, Pioneer, Planet Audio, Rockford Fosgate, Sirius Satellite Radio, Sony, Tesla Electronics, Ultimate Sound Inc. and XM Satellite Radio. CES houses the largest mobile technology tradeshow in the world with more than 257,000 square-feet of exhibits.
Attendees also won't want to miss the Digital Car Showroom, Aftermarket Showroom, Telematics Pavilion, the Intelligent Transportation System Data Bus (IDB) Pavilion sponsored by the IDB Forum, the Oasis Silicon Systems booth, the Telematics Update Pavilion and the MOST Data Bus Pavilion Sponsored by MOST Cooperation, showcasing the latest in mobile technology.
Off the show floor, attendees have the opportunity to catch up on the latest trends of this $15 million industry. Several CES conference sessions tap into success of this booming industry including:
* Walking The Walk With GPS
* Connected for Success: An Overview of the Automatic Aftermarket
* Digital Wheels in the Fast Lane
The 2003 International CES plays host to one of the mobile electronics industry's most anticipated events, the "Select Products MECP Installer Challenge." Attendees will witness the "best of the best" installers compete in this two-day mobile installation contest to build the best car beginning Thursday, January 9 at 12:00 p.m. in the Silver Lot of the LVCC. MECP testing will take place on-site as well.
Across the street from the convention center, the Mercedes Tech Drive returns to the Gold Lot, giving attendees the opportunity to get behind the wheel of some of the hottest automobiles manufactured by Mercedes Benz.
CEA's Technocar will be located in the North Hall of the LVCC. The TechnoCar showcases the latest in aftermarket automotive electronics and promotes quality professional installation by MECP-certified professionals. TechnoCar is CEA's self-contained mock-up of the interior of a car loaded with the latest mobile technology including satellite radio, navigation equipment, video and digital audio technology and electronic gaming.
http://www.ce.org/press_room/press_release_detail.asp?id=10068
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Digital Entertainment Post-Napster: Movies
By Thomas Bass November 2002
DivX makes downloading movies easy. Should Hollywood be nervous?
Last summer’s first two blockbuster films, Spider-Man and Star Wars: Episode II—Attack of the Clones, played on more than 3,000 movie screens and grossed more than $100 million in their opening weeks. Impressive numbers. But not as impressive as the numbers generated by these movies’ actual opening nights.
A bootlegged copy of Spider-Man appeared on the Internet the day before the movie premiered in theaters. A copy of Attack of the Clones—as if to mock its title—was widely available a week before that movie’s scheduled release. From that virtual opening, which was accessible to half a billion people on their home computers, its Hollywood producers grossed exactly $0.
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http://www.technologyreview.com/articles/bass1102.asp
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Goodbye to the video store
Sep 19th 2002
From The Economist print edition
Streaming video: For too long, “video-on-demand” has promised more than it could deliver. But new ways are emerging for shrink-wrapping massive video files for delivery over the Internet
IT SOUNDS like the movie addict's ultimate fantasy: a TV-mounted set-top box that taps the film libraries of Hollywood's big studios. A film buff could peruse thousands of titles spanning dozens of genres, from enduring classics to the latest blockbuster releases. After deciding what to watch, viewers would enter a password, confirm credit-card details, then sit back as 5.1-channel surround-sound video streams from a remote web server into a home-theatre system in their living room.
Too good to be true? For the moment, yes. Bespoke video-on-demand is at least three years away. But the difference now is that Movielink—a recently formed joint venture between MGM, Paramount, Sony, Universal and Warner Bros—is preparing a collective library for just such a service. The venture intends to serve up an almost unlimited selection of films over the Internet—and, eventually, through a web-connected set-top box.
There is only one problem: the current scheme for converting an average two-hour epic into a digital file results in about five gigabytes of data—equivalent to five billion letters of the alphabet (ie, close to a billion words in English). With each byte comprising eight binary digits (or “bits”), a typical movie contains no less than 40 billion bits of data. Trying to stuff that many zeros and ones through the copper lines that link most homes to the Internet—even via a broadband DSL (digital subscriber line) or cable modem connection—would take all day. If there is ever going to be a profitable online video service, content creators in Hollywood and elsewhere must figure out how to squeeze those hefty film files through narrow digital pipelines.
That is where “codecs” (compression/decompression algorithms) come in. These are sophisticated, and often proprietary, mathematical formulae that can quickly scrunch hours of digital video and determine where best to make nips and tucks unnoticeable to a viewer. The end result is a compact digital file.
One of the most prevalent codecs is MPEG-2. Established by the Moving Picture Experts Group in 1994 as a standard for digital television, MPEG-2 governs DVDs, satellite TV and digital cable content. This requires a minimum transmission rate of two megabits per second for video scenes with little movement in them and up to 80 megabits per second for action scenes, so there is little hope of sending MPEG-2 video to homes using even the fastest of Internet connections available today—which, at best, barely break the one megabit per second barrier.
More muscle needed
Yet, if the future is indeed “anytime anywhere” video-on-demand, as digital-media buffs suggest, then Movielink, Intertainer and other online film sites will require a codec with many times the compression muscle of MPEG-2. The demand for such a codec is spurring a feverish race between developers all angling to create the de facto compression/decompression standard for online video delivery.
“The consumer-electronics makers cannot afford to lose the battle for the set-top box.”
There are the established organisations, such as RealNetworks, Microsoft and Apple, each with a video-playing software product (ie, “media player”) that exploits the firm's own proprietary codec. With 29m users, RealNetworks hopes to propagate its popular RealPlayer beyond the desktop and into set-top boxes, cell phones, PDAs (personal digital assistants), and anywhere it imagines full-motion video might be feasible. Microsoft is closing in on RealNetworks with its Windows Media Player that is now reckoned to be on some 13m personal computers. Apple's QuickTime comes third with 8m users.
It is the upstarts, however, who are better positioned to rule the future of video-on-demand. For instance, the latest iteration of the Moving Picture Expert Group's standard, MPEG-4, is honed to function smoothly on consumer-electronics devices, which gives it an advantage over Microsoft, RealNetworks and Apple, whose algorithms are better suited for the beefier microprocessors inside desktop PCs. And there are a handful of others, including Pulsent, On2, and DivXNetworks, each hawking their own video codecs to content creators and electronics manufacturers, convinced that their technology is the best for the job.
Ryan Jones, who tracks media and entertainment strategies for the Yankee Group, a consultancy based in Boston, believes that Microsoft and RealNetworks will lead the way on the PC, mainly because they have reliable systems for stemming piracy. But gathering around the computer in the study to view the latest Star Wars sequel is unrealistic. “Consumers want the movie experience in their living room,” Mr Jones insists. That is exactly what those developing the newest video codecs are counting on. Mr Jones believes that the first step will be the evolution of the set-top box—the device that decodes the cable or satellite feed for displaying on TV—into a competitive consumer-electronics product.
Such a trend will turn the movie, video and TV businesses upside down. Currently, the design of set-top boxes is largely in the hands of the cable-TV operators, who want to control the kind of content accessible over their networks, such as pay-per-view (they choose the movie, you choose the time). Eventually, however, the cable providers will find themselves ceding control over the set-top box to consumer-electronics manufacturers such as Matsushita, Sony and Philips, on the one hand, and to content creators, on the other. Why? Because both the technological and market forces will simply overwhelm them. As a result, the set-top box will handle video-on-demand from any number of providers. Users will then access the content they wish to see using an Internet-like “browser” displayed on their TV screens. Eventually, film studios will rent or sell new films direct to the public.
The implications of such a trend: declining influence of the movie-distribution chains that hold sway over when and where new films are released; few video stores outside large urban areas; and dwindling attendances at cinemas everywhere. Cable providers will get their cut in the form of payment for opening their networks to third-party content.
Meanwhile, the set-top box will replace the VCR—the greatest single product the consumer-electronics industry ever produced, and one which, at its peak, generated half the industry's sales and three-quarters of its profits. That is why the consumer-electronics makers cannot afford to lose the battle for the set-top box.
One codec or many?
For codec makers, the aim will be to become the standard means for compressing all those thousands of movies that will be streamed into millions of homes. Doing so could make one company (or, in the case of MPEG-4, one consortium of patent holders) very wealthy.
Today, it is still not clear whether a single codec will emerge as the prevailing standard—just as MP3 reigns over the audio world. Nor is it yet clear whether future set-top boxes will become more like a PC, with their own microprocessors and built-in software to juggle multiple codecs. The answer could come when some media mogul—say, Jim Ramo, the boss of Movielink—chooses a single codec to compress all his company's content. That would oblige set-top-box makers to build compatible devices, rendering all other codecs instantly obsolete.
In the meantime, few are hanging around for that day to arrive. Instead, codec firms, envisaging an imminent gold rush, are spending millions promoting themselves to content providers and electronics companies. These, in turn, are hoping to avoid the blunders made by the music industry when it failed to embrace the money-spinning potential of MP3 until it was too late.
At the moment, MPEG-4 has a head start in the race to become the prevailing codec for streaming digital video. In essence, MPEG-4 is a set of technical specifications that define a patented process for compressing and decompressing video. Because nearly 90% of Internet users connect over a dial-up line, the previous version of the codec, MPEG-2, would quickly clog the pipes. MPEG-4 tackles this problem by slashing the bandwidth requirements to as little as 40 kilobits per second—some 50 times leaner than MPEG-2—while preserving clarity. At higher bit rates, MPEG-4 manages near-DVD quality.
The trick MPEG-4 uses to render crisp video without hogging bandwidth is a process known as “object-based compression”. Previous MPEG schemes simply divided each video frame into a grid, then tagged each block with a unique data signature. MPEG-4 begins with this strategy but takes compression a step further. Instead of capturing the sum total of each frame, MPEG-4 considers separate regions within the picture and decides how to handle them on the fly. For example, if the background between two consecutive frames remains unchanged, while the foreground varies, MPEG-4 will compress the static background and treat the image as a still picture. As MPEG-4 streams video over a network, static backgrounds are sent once, reserving bandwidth for dynamic parts, which have to be compressed and retransmitted as they shift positions.
Overall, MPEG-4 incorporates 23 different mathematical profiles. These enable users to adapt its algorithms to operate on a variety of devices, including pocket PCs and set-top boxes. Despite that, Mr Jones reckons that other, newer codecs could win the battle to rule the set-top box. The reason is MPEG-4's tough licensing terms. Anybody wanting to integrate MPEG-4 into a particular video streaming device must pay stiff royalties to a group of 23 companies, which together own several hundred related patents.
Between them, the consortium members have established an independent licensing body called MPEG LA to hammer out royalty agreements between MPEG-4's patent holders and the companies hoping to use the codec. Larry Horn, vice-president of licensing and business development at MPEG LA, explains that the licence is non-exclusive, giving any firm the right to negotiate a royalty deal.
“Others are counting on MPEG LA's licensing rules to steer content creators towards other codecs.”
The terms of those agreements, however, are still up in the air. Initially, MPEG LA introduced a scheme that would require companies employing MPEG-4 in their technology to pay a 25 cents royalty for every machine with a copy of the codec incorporated, plus a “per use” fee of two cents an hour. In other words, if a viewer watched a video encoded in MPEG-4 from CNN's website, the news network would have to pay patent holders a royalty. Although the proposed amounts were small, MPEG LA made no allowance for differing content types, free or otherwise. If, for example, tens of millions of people suddenly began downloading a two-minute video clip of the World Trade Centre collapse, the ensuing royalties would bankrupt CNN within days.
Following an uproar from the industry, MPEG LA reworked its royalty arrangements. In July 2002, Mr Horn announced a modified structure that places annual caps on certain types of content usage. Other features include an option for media firms and electronics manufacturers to pay a one-time licensing fee, a per-subscriber charge, or a pay-by-the-minute rate. The last would value a downloaded copy of “Black Hawk Down” at about five cents.
Too little, too late?
Many in the industry believe that MPEG LA's final licensing terms could still suffocate innovation. Apple was forced to delay the release of the latest version of its QuickTime player (version 6.0), which incorporates MPEG-4. Initially, it declared the licensing terms too onerous. Apple relented once MPEG LA revised its terms. Douglas McIntyre, head of On2 Technologies, a software company based in New York that has developed a codec called VP5, has been one of the most vocal critics. His company recently posted a tome online, criticising MPEG LA's strategy point by point. “It is a move by a few very large companies to dominate a market and fix prices,” says On2.
Mr McIntyre and others are counting on MPEG LA's draconian licensing rules to steer content creators and electronics firms towards an array of other video codecs. Anybody in the business of using video compression is bound to consider MPEG-4 as well as codecs from RealNetworks, Microsoft and Apple, admits Mr McIntyre. But he points out that other codecs work as well, if not better, and come with fewer licensing strings attached.
On2's own VP5 technology is one of several emerging codecs that provide potential users with a serious alternative. Streaming at 400 kilobits per second, about half the speed of a DSL connection, VP5-encoded video looks almost as good as images from a DVD. The company guards its compression technique jealously, but Mr McIntyre attributes most of the work to pre- and post-processing tools. These are methods for manipulating digital files before the video is compressed and after it is decoded. To that end, VP5 scrutinises data rates, making on-the-fly adjustments to image softness, colour tone, and pixel size. But with an accumulated deficit of more than $100m, On2 has been seeking new partners. It recently announced a deal to use its codec in chips for set-top boxes and mobile telephones produced by Texas Instruments.
Then there is Jordan Greenhall, a former executive of MP3.com, who amassed a wealth of experience as a broker of “content deals” for that renowned audio portal. Mr Greenhall now heads DivXNetworks of San Diego, California, which is marketing a video codec that aims to reproduce the experience of being in a cinema. DivX began as a cult movement when Jérôme Rota, a computing and digital-video guru, wrote the codec in 1999 to help him crunch graphics. Word spread, and soon DivX video appeared Napster-like on file-sharing networks around the world. So far, more than 12m copies of DivX have been downloaded, and thousands of (mostly pirated) full-length feature films, television shows, music videos, and pornographic movies are circulating the Internet encoded in this popular format.
DivXNetworks, founded recently by Mr Rota and Mr Greenhall to take advantage of the codec's grassroots success, has raised $11.6m in these difficult times for venture capital. Its latest codec, DivX 5.0, is said to be particularly good at preventing “tearing”, a playback error that occurs when the software cannot “render” the video for display at the same pace that it is being decompressed and fed into the media player. The overload appears as a frayed line across the middle of the frame. Similar to VP5, DivX 5.0 massages the decompressed video to prevent tearing, dropped frames and other glitches.
Objects beat blocks
One of the newest video-compression tools comes from Pulsent, a Silicon Valley start-up that has toiled for the past four years in self-imposed secrecy. The company claims that its “stealth team of scientists” is developing a codec that breaks the 20-year paradigm of “block-based” compression techniques. Pulsent's chief executive, Adityo Prakesh, is cagy about the specifics. But his company is not without cash, having raised $33.5m from private investors.
According to Mr Prakesh, the Pulsent codec identifies objects on the screen as unique entities. Whereas block-based compression and object-oriented codecs slice up backgrounds and foregrounds into grids, the Pulsent approach actually pinpoints real-world items in the frame—such as a person, tree or building—and processes each element separately to optimise the playback's performance. Mr Prakesh believes that his firm's codec will revolutionise video compression—so much so that he is pumping money into the development of a chip that can encode and decode files in real-time using the Pulsent algorithms. The aim is to get the chip into set-top boxes for video-on-demand services.
It is difficult to verify Pulsent's claims. Experts and rivals are curious but tentative. It is still too early to know which codecs will endure. At this stage, the strategy for most is to get their product into the marketplace and build their brand. That is not the case with Emmett Plant, a 25-year-old former Unix engineer who heads a non-profit organisation called Xiph.org Foundation that is developing open-source solutions for multimedia. Mr Plant surveys the codec scramble from above the fray. Surviving mostly on donations, Xiph.org is developing an open-source video codec called Tarkin. What really defines the success of a codec, Mr Plant believes, is its ease of use, adaptability and popularity. He argues that the average consumer wants something that looks and sounds good, and does not care how the film is compressed.
“When Napster went down, Morpheus, LimeWire and Audiogalaxy quickly filled its shoes.”
Mr Plant compares Tarkin to Linux, the open-source operating system that has revitalised the Unix community and become a serious alternative to Windows. Linux got a foothold among computer-science students, who were looking for a cheap way to learn programming and downloaded the free operating system. Later, as companies recruited the students as software engineers, Linux infiltrated the corporate world and took over many of the more important server duties there.
Xiph.org sees Tarkin following a similar path. The idea is that as more and more programmers download the codec for use in video playback devices, they will make continual improvements to its freely accessible software. Mr Plant contends that an open-source project such as Tarkin is more likely than a commercial project to produce a high-quality codec, because the motivation behind such volunteer groups is not profit but performance.
Whether Tarkin—or any other new codec technology—succeeds will depend not only on the ingenuity of mathematicians devising the new algorithms for compressing video data and the talents of the marketing people who are seeking to build the brand. Equally important will be getting the backing of those who control the means of delivery: the cable companies. Without a conduit into the home, content providers are stymied. Most cable operators have already made big investments to add digital cable and high-speed Internet services to their networks. Providing for video-on-demand means spending millions more.
Fortunately, a short cut is in development at CableLabs, an industry R&D consortium that includes AOL Time Warner, AT&T Broadband, and Comcast. The project, known as OpenCable, will establish a cable transmission standard analogous to the Internet protocol that will allow set-top boxes from any manufacturer to work with any cable system and swap movies, games and multimedia content. The devices would incorporate an array of features, including Internet capabilities and browsing software, to make possible video-on-demand services.
Avoiding music's mistakes
But first, content creators must agree on a method to encode their content for Internet delivery. At present, nobody is sure what form that will take. Will there be one principal codec, such as VP5, MPEG-4 or DivX, handling content and powering the majority of set-top boxes? Or will there be an array of codecs scrunching video that is encoded in a variety of formats?
That is not important, according to Mr McIntyre. He cites KaZaA, a piece of software that allows enthusiasts to swap video content over the Internet in a Napster-like fashion but even more anonymously. Already, 62m users have downloaded the KaZaA software. At any given moment, some 800,000 people are said to be sharing media files this way. As high as they are, those numbers will be minuscule, declares Mr McIntyre, if Hollywood and others waste any more time quibbling over formats, or fretting over copyright infringements.
In May, KaZaA announced that it would have to shut its doors because it could not find the cash to defend itself against the barrage of lawsuits filed by the studios. Will big media ever learn? When Napster went down, Morpheus, LimeWire and Audiogalaxy quickly filled its shoes. Consumer demand for content is not going to wait for the studios to sort out their gripes. Even if KaZaA disappears, its success proves that very soon video codecs will do for movies what MP3 did for music. Then it will be too late to persuade consumers to pay for a service they can get for nothing.
http://www.economist.com/science/tq/displayStory.cfm?story_id=1324695
culater
Senate puts Webcasting bill on hold
A last-minute procedural twist stalls a bill aimed at softening the blow of new online music fees for struggling small online radio broadcasters.
A last-minute procedural twist Thursday night stalled a Senate bill aimed at softening the blow of new online music fees for struggling small Webcasters.
Small Webcasters, many of which have said they will shut down rather than start paying new royalty fees that come due this weekend, had pressed for the passage of the bill as a last-ditch effort to stay in business. Negotiations earlier this month had won the support of the Recording Industry Association of America (RIAA) for the measure.
However, a last-minute hold anonymously placed on the bill by a single senator prevented the Senate from voting on the issue before adjourning Thursday night. Sources close to the issue say the senator was Jesse Helms, R-N.C., acting in part on concerns expressed by traditional broadcasters.
"Jesse Helms killed Internet radio," said Michael Roe, manager of RadioIO.com, and one of the leading figures in the group of Webcasters who had helped negotiate the bill. "Pending some private deal (between the RIAA and Webcasters) materializing between now and Sunday, RadioIO will go dark."
The bill still can be taken up in November after the Senate reconvenes, providing some measure of hope to Webcasters. However, as the law stands today, all Internet radio companies will be required beginning Sunday to pay royalty fees amounting to about one-fourteenth of a cent per song streamed to each individual person. The fees are retroactive to 1998, which means that huge bills will be presented to some popular stations.
The record industry trade association had argued consistently that the rate, set by the Copyright Office and the Librarian of Congress, was too low. However, the group had agreed in the course of the bill's negotiations to let small businesses pay between 8 percent and 12 percent of revenue instead of the flat fee.
The RIAA said it was disappointed that the bill had not been taken up as expected.
"We hope that the Senate will work this out quickly," said RIAA Chief Executive Officer Hilary Rosen. "All parties who support this legislation should contact their senators to urge passage of this bill."
An RIAA spokeswoman declined to comment on whether the group was willing to discuss any "private deal" that would let small Webcasters avoid the Oct. 20 deadline without legislation.
According to a spokesman for Sen. Patrick Leahy, D-Vt., negotiations in the Senate over the last week had succeeded in winning most members' support. The bill was expected to pass on Thursday without significant opposition, so the last-minute hold--apparently by Helms--came as a surprise.
Capitol Hill sources said Helms was concerned by the objections of traditional broadcasters, most of which would not be covered by the bill's provisions. Over-the-air radio stations are seeking a court ruling that would exempt them from the new royalty fees when they play their programming on the Internet. However, both the U.S. Copyright Office and the courts have said that broadcasters must pay the fees.
A representative for Helms could not immediately be reached for comment.
culater
OT-ReplayTV's Latest Is Sure Worth Watching
It has all the cool features that make a digital video recorder so much better than a VCR -- and now it's a whole lot cheaper
Talk to anyone who sells digital video recorders (DVR) and he or she will wax poetic about the "magic moment" -- that electric instant where a customer suddenly gets it. This is more than just a VCR. With DVRs, there's no more setting the timer. No more channel surfing. And best of all, no more commercials.
DVR maker SONICBlue (SBLU ) is hoping that consumers will have a collective magic moment this holiday season. And it just released the latest version of its ReplayTV. The major upgrade: a big price cut. The new ReplayTV 5000, which can record 40 hours of programming, starts at $249 -- far below previous prices, which reached as high as $1,999. Users also have to purchase a $9.95 monthly subscription or pay a one-time up-front, fee of $250 to receive electronic programming data.
Still sound like a lot? Then you obviously haven't had your "magic moment." I have. And I'm convinced that ReplayTV is the best new consumer-electronics around. It actually does change the way you watch TV -- letting you watch what you want, when you want. Just like a VCR -- only much easier.
CLICK OR DOUBLECLICK. Here's a rundown: First, like any DVR, ReplayTV is a hyperintelligent VCR. Instead of you looking up when, say, The Simpsons is on and setting the VCR's timer, on ReplayTV you simply thumb through the player's electronic program guide and click when you find a program you like. If you're really a Simpsons lover, click twice and the recorder will hunt for every airing of the show on every channel and automatically record it.
Or simply tell ReplayTV that you're a Julia Roberts fan, and it will search out any movies she stars in that happen to be on TV. You can also ask ReplayTV to record any movie that has won an Oscar for Best Picture or every National Basketball Assn. game featuring the New York Knicks.
Without a doubt, the best feature is commercial advance, ReplayTV's diplomatic name for never having to watch another advertisement. Sure, the commercials are recorded along with ER, but with the single push of a button, you can decide to skip them throughout the program replay. This, needless to say, has raised the ire of broadcast networks and cable channels who fear that their profits are at stake.
BIG DIFFERENTIATIOR. So until now, SONICBlue has been careful not to talk up commercial advance. Instead, it has positioned the feature as an opportunity for, say parents to record movies that run late at night (when commercials often hawk adult products or sex chat lines) and show them to their children minus the inappropriate ads. But as it ramps up for the Christmas selling season, SONICBlue's management has (finally) realized that commercial advance is a big differentiator. Unlike other DVRs, ReplayTV, in effect, turns every station into commercial-free HBO.
ReplayTV has a host of other advanced features. Owners with a broadband connection can share recorded programs over the Internet with as many as 15 friends. And if you have more than one ReplayTV (and a home network), you can easily watch what's recorded on the living room DVR from the one in your bedroom.
These features are very cool -- not to mention also very controversial. But they're not going to make many people run out and buy a ReplayTV. Remember, most of us still can't set the clock on our plain old analog VCRs. As Nikhil Balram, SONICBlue's vice-president for connected home products admits, most consumers aren't ready yet for ReplayTV's sophisticated features. "We're building a DVR for today and tomorrow," he says. "We don't charge extra for advanced features. They're just there to use when people are ready."
"TOUGH STORY." When U.S. consumers will be ready to embrace ReplayTV is an open question. Research firm Yankee Group projects that DVRs will make their way into 1.8 million U.S. homes by yearend and 19.1 million by the end of 2006. Compare that to the sizzling sales of DVD players, which have zoomed from zero in 1997 to 35 million today. That makes DVD players the most popular consumer-electronics product in history.
"DVRs are a tough story to tell," says Aditya Kishore, a Yankee Group digital entertainment analyst. "It does pretty much what a VCR does, so it's difficult to prove to a consumer that there's additional value."
SONICBlue has a limited time to get the message out. For one, it's being sued by a consortium of 27 broadcasters, cable companies, and all the major Hollywood studios, which complain that the ability to skip commercials and send recorded shows to friends is a copyright infringement (see BW Online 2/6/02, "ReplayTV Is Not Another Napster"). The suit is expected to go to court late next year. That gives SONICBlue at most two holiday shopping seasons to promote ReplayTV and increase market share.
LOSSES AND LAYOFFS. It also has to pump up profits -- and fast. SONICBlue has to pay back a $16.5 million line of credit early next year. An additional $174 million in long-term debt is due next October. At the end of its second quarter, SONICBlue was still bleeding red ink. Though revenues skyrocketed 80%, it lost $23.5 million on sales of $61.6 million. On Sept. 8, the company laid off 25% of its staff including its senior vice-president for sales and its chief technical officer.
Still, I'll be rooting for ReplayTV. With the machine now on the shelves at mega-retailer BestBuy (BBY ), millions of consumers have the chance to experience their own magic moment. After all, isn't magic what the holidays are all about?http://www.businessweek.com/technology/content/oct2002/tc20021021_1009.htm
culater
Matsushita, Microsoft promote new media storage standard Mail to a friend
ITworld.com 10/18/02
Martyn Williams, IDG News Service, Tokyo Bureau
Matsushita Electric Industrial Co. Ltd., better known as Panasonic, and Microsoft Corp. 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.
http://www.itworld.com/Comp/3786/021018matsushitams/
culater
Tuning in to digital radio
By Evan Hansen
Staff Writer, CNET News.com
October 21, 2002, 4:00 AM PT
The future of radio--one of the last analog holdouts in an increasingly digital world--is coming into view in the United Kingdom.
The British Broadcasting Corp. has been busy rolling out new digital radio channels under a standard known as Eureka 147. It's already possible to retrieve Web pages using some of these services, although download speeds can leave users frustrated.
The United Kingdom also is home to Modular Technology, a computer-components maker that offers consumers a way to pull broadcasts from the airwaves and play them on their PCs. The company recently added a radio receiver card to its popular line of PC TV tuners, throwing a spotlight on the coming digitization of the AM and FM bands in Europe and across the globe.
Taken together, Modular Technology's DAB digital radio card and the BBC's digital programming let users schedule radio recordings with the help of electronic program guides--essentially offering the same sort of controversial features found in digital video recorders like TiVo and ReplayTV, which have thrown TV broadcasters into a frenzy.
Such capabilities are now poised to transform the lowly AM/FM radio from a cheap, static-prone receiver into a sophisticated media-processing device bolstered by memory, a hard drive, a screen for displaying images, and a graphical interface--in short, into a stubby, road-ready computer just shy of your average desktop PC.
If digital radio products and services continue to pick up momentum, which seems likely, the airwaves could one day become a giant file server, pouring out MP3s and other data to a mobile audience.
A representative from Modular Technology did not immediately respond to an e-mail request for an interview. Others in the industry, however, say the future will see much smarter and feature-rich receivers, particularly in the increasingly high-end world of car radios.
"There is no question in my mind that the industry is moving aggressively into this market," said Larry Pesce, vice president of product management and strategic planning at U.S.-based digital satellite radio provider Sirius Satellite Radio.
Hang the DJ
Traditional radio stations are scrambling to keep up with digital formats that have handed consumers unprecedented control over their music thanks to the Internet and portable MP3 players. Local advertising-based radio is under attack from new subscription services and from online radio broadcasts that have increasingly let listeners choose the music they hear and escape rigid programming schedules.
Digital competitors to local AM and FM radio have spent billions on risky satellite bets that aim to attract subscribers by providing national coverage, higher quality audio and advertising-free programming. Sirius and XM Satellite Radio have launched in the United States with the backing of deep-pocket investors, although their massive debt levels have left serious doubts about their ability to survive until they can sign up enough subscribers to offset their costs.
Digital avenues are opening up on several fronts, however, so even if satellite radio crashes and burns, traditional radio is almost certain to continue the march toward 0s and 1s.
In a major step toward digital radio adoption, the U.S. Federal Communications Commission earlier this month approved digital broadcasts using proprietary technology created by Columbia, Md.-based iBiquity, known generically as IBOC but branded as HD Radio by the company.
Other hints of the future can be seen in a wave of processing chips and radio components that let consumers receive, copy and store MP3 and other file formats from broadcasts over the radio spectrum. Coupled with fledgling standards for local digital radio transmissions, such devices herald the first major overhaul of radio since the arrival of the FM band in the 1940s.
As a result, in-car listeners could soon have access to song and artist information delivered to an LED (light-emitting diode) display, recording, storage and playback functions, on-demand programming, and the ability to skip back to the beginning of a song that they tuned in to midway through. Other uses beyond traditional radio programming are also on the drawing board, for example, using radio bandwidth to download updates for navigational and other digital car systems.
Down the road, broadcasters are predicting the arrival of full two-way communication on the FM dial, according to Jeff Jury, co-chief operating officer of iBiquity. New radio devices "will include not just the ability to store and replay content, but interactive features that could allow listeners to purchase music downloads," he said.
A clear signal
Digital radio has the enthusiastic backing of governments and broadcasters as well as consumer-electronics manufacturers and chipmakers that hope to fuel consumer demand for new products. Consumer-electronics maker Kenwood, for one, has pledged to begin producing HD Radio-compatible receivers by the first quarter of 2003.
Car manufacturers, meanwhile, are lining up to offer dealer and factory installations of satellite-ready and other digitally enhanced radios. Ford Motor will offer satellite radios in some vehicle models by the first quarter of next year, with other major car manufacturers coming onboard at about the same time or shortly afterward.
Texas Instruments, which makes digital radio processing chips found in products from both iBiquity and Modular Technology, predicts sales of digital radios could make up 30 percent of the market by 2010. At TI's current price of $40 a chipset, that's about $1 billion in revenue for the silicon alone, although prices will almost certainly drop over the next few years with improvements and competition.
Adding digital transmitters to all of the 10,000 estimated radio stations in the United States could cost up to $10 billion, iBiquity estimates.
Although movement on the standards front has opened the door to broad consumer adoption, declining digital radio processor prices have in fact provided the primary push for the technology.
Digital radio proposals have been on the boards since the late 1980s but languished because the chips for crunching the data were either too inefficient or too costly for mass consumer products.
"It's only been in the past few years that those processors have become available on the receiver end," said John Gardner, marketing manager for digital radio at TI. "That's why we've seen digital radio come to a head now. The standards approval is somewhat coincidental."
Other chipmakers in the digital radio market include Motorola and Philips, both of which make processors that convert traditional analog broadcasts to digital formats at the receiver. These chips offer some digital enhancements to traditional radio without requiring broadcasters to convert to digital transmitters.
Such chips have been available for a while but could get a new push thanks to higher visibility of digital radio from iBiquity and broadcasters as they release digital services. That could put powerful new digital features in the hands of consumers long before U.S. broadcasters get around to upgrading their transmitters, a process that could take up to 10 years, according to iBiquity.
Some examples are already finding their way onto the market in Asia.
Earlier this month, at the Korean Electronics Show, consumer-electronics giant Samsung demonstrated a new service allowing consumers to stream music files stored on a cell phone over a Bluetooth wireless connection to a radio receiver using Motorola's Symphony digital radio chipset.
The demonstration showed that a "two-way interactive channel is possible on the radio," said John Hansen, manager of marketing driver information systems at Motorola.
Less futuristically, Symphony helps extend the range of analog broadcasts, using software-filtering techniques to clean up static and hisses.
Celestial jukebox?
Although digital upgrades tout superior audio quality, it's the ability to piggyback data across the FM spectrum that could shake up the industry.
So-called data casting is already available to analog radio broadcasters through subcarriers, which can currently deliver data at a rate of about 1.5kbps. That's sufficient to display a radio station ID and song and artist information on an LED screen, but little else.
Enhancements through hybrid digital-analog upgrades planned by iBiquity could provide up to 160kbps throughput, leaving about 64kbps of bandwidth for data on top of the primary audio component. A pure digital channel, meanwhile, would offer bandwidth of up to 300kbps, according to Motorola's Hansen.
Norm Miller, president of subcarrier provider Digital Radio Express, said data casting has been viable in theory for years at minimal expense. Adding subcarrier data transmission capabilities to current radio transmitters would cost less than $1,000, he said, but it has not gained widespread adoption because of a lack of content.
"The key question is, 'What do you do with 64kbps?'" he said. "If you believe the demand for data is arriving, then this begins to look promising. As navigation systems in cars proliferate, for example, just updating the system brings a lot of value."
Miller said radio data casting will likely remain a one-way system for the foreseeable future but said its low cost could make it an attractive vehicle.
"This is the lowest cost-per-bit delivery system around," Miller said.
TI's Gardner said two-way interactivity over radio spectrum is still some way off. But he said the transformation of the sleepy AM/FM receiver is already well under way, posing far-reaching questions about the direction of the radio industry.
"Radio has long been an important promoter for the record labels," Gardner said. "It's an interesting question what happens when they start to compete with interactivity and on-demand programming."
The Recording Industry Association of America, the main lobby group for the music labels in the United States, did not provide a representative to comment on digital radio issues by the time this article was published.
Digital conversion will put radio under the purview of the Digital Millennium Copyright Act, a controversial 1998 law that some believe has greatly expanded the powers of copyright holders.
While digital radio broadcasting over the Internet has raised thorny questions over royalty rates for Webcasters, among other things, at least one legal expert who has represented the radio industry in copyright disputes said there would be no significant changes between over-the-air analog and digital broadcasts. The status of making personal digital recordings of radio broadcasts remains unclear, however.
Despite potential legal complications, iBiquity's Jury said that the industry has no other choice but to make the digital leap.
"It's hard to say how all of this will play out," Jury said. "Consumers will have more interactive opportunities. But we're coming at this from the point of view of leveling the playing field. Radio doesn't want to be left as the last of the analog technologies."
http://news.com.com/2100-1023-962671.html?tag=fd_lede2_hed
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Rock stars sue Vivendi's MP3.com
Bob Dylan, Billy Joel and James Taylor say the site distributes their songs without authorization.
October 9, 2002: 1:25 PM EDT
LOS ANGELES (Reuters) - Rock stars Bob Dylan, Billy Joel and James Taylor filed a lawsuit against music Web site MP3.com for allegedly distributing their songs without authorization, people familiar with the suit say.
Singer Bob Dylan, above, Billy Joel and James Taylor sued Vivendi Universal's MP3.com music Web site for allegedly distributing their songs without authorization. (Photo: Reuters)
A spokesman for MP3.com, which is owned by Vivendi Universal (V: down $0.38 to $10.91, Research, Estimates), declined comment.
People familiar with both the artists and the company said they had been made aware of the lawsuit in the last few days.
The artists are not the first to sue MP3.com, which was the target of major litigation brought against it on behalf of the world's major record labels in January 2000 for infringement.
MP3.com settled the copyright battle by paying out about $175 million and was then later bought by Vivendi Universal, one of its legal foes, for about $372 million.
The pioneering music portal sparked the wrath of the recording industry with its My.MP3.com service, which allowed users to register compact discs they own through the company's software and then listen to that music on any computer hooked into the Internet.
Before launching the service, the company failed to get permission from record labels and publishers.
In January, MP3.com sued its former counsel for fraud and legal malpractice, claiming its lawyers advised MP3.com that its My.Mp3.com service was a legal undertaking.
The musicians' suit, reportedly filed Tuesday in Manhattan federal court, claims MP3.com digitally copied their tracks from commercial CDs and then offered the music files to users.
All three artists are signed to labels owned by Sony Corp.
http://money.cnn.com/2002/10/09/news/companies/vivendi_lawsuit.reut/index.htm
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ot-Intel boss Barrett talks up tech bounce back, few convinced
Wednesday 9th October 2002
by Jack Of Hearts
Craig Barrett, the head of Intel, predicted a bounce back to full strength for the tech sector by early 2003 at the latest. Speaking at an event in Spain the man was strangely upbeat, given that many in the semi-conductor industry are saying this is the worst recession in the industry's history, claiming that the next year or two will see a full recovery of fortunes.
A D V E R T I S E M E N T
It's only the pure play tech firms that can expect an imminent upturn in fortunes, according to Barrett, by early 2003. The telco industry on the other hand, which is possibly the one that will have the most effect on all of us, will not see any sustainable up turn until the end of 2003 and, more likely, 2004.
That's only part of the picture of course. Barrett's comments were in sharp contrast to those made by Intel which has yet to make any predictions about a return to full health this year. Also, as Barrett noted in his address to expectant Seville crowds, the future of technology may not be so sound even if there is a recovery next year. He warned that if the Venture Capital funds dried up there would be little in terms of innovation.
That's a good point considering that Venture Capital funds clearly are drying up for the tech sector. According to a recent study from PWC, the level of investments made into the software industry have fallen by 16% of late. It's still getting the lions share of investment from the VC's, but nothing like previous levels. Similarly, the dot com collapse has a tumultuous effect on Entrepreneurship too, where many of the good ideas are nurtured. According to a recent study from the Global Entrepreneurship Monitor the number of people taking such a gamble has fallen by 30% year on year.
Much like the long awaited dossier of evidence on Sadam Hussein and his cronies, however, Barrett had little in the way of tangible evidence to present. Instead he turned to his own inner feelings as proof saying that, "I've never been more optimistic."
That may have been enough to soothe the nerves of casual investors, or the inept, but it did little to dampen the feelings of woe currently visible in tech outfits across the globe. Many, potentially more realistic, views about the tech industry suggest that this is as good as it gets. Larry Ellison, the head of Oracle, for instance, said recently that the next set of millionaires to hit the sunny sidewalks of San Francisco would be those in the Bio-tech field - not the software vendors.
Looking at stats for recruitment, always a good sign of an upturn as companies dip into their pockets for technology projects, they too paint a bleak picture. According to a recent Computer Weekly study online tech job advertising through the second quarter of the year fell by more than a quarter over the previous quarter. Similarly in the newspapers, they saw a fall of more than three quarters - showing few signs that new technology projects are about to be launched.
You may also recall that EMC, along with much of the rest of the tech industry, has just slashed its headcount citing a 'brutal' quarter as reason for the cull. That's pretty much the message across the board and with the Tech unemployment rate currently reaching previously unknown levels, it looks more like this 'recession' is actually a much needed correction.
http://www.it-analysis.com/article.php?id=2612
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1 GB SD card, coming next year
By: Larry Garfield, Wednesday, 09.10.02 18:12 GMT
Panasonic has a 1 GB SD card ready, bringing full-length DivX movies on a handheld a step closer, but it won't be on shelves for another year. Hopefully by then other companies will have them, too, and drive down prices.
Matsushita Electric Industrial, better known for the brand name Panasonic, has announced as Ceatec 2002 that they have developed a Secure Digital card capable of holding 1 gigabyte of data. It also uses a new, faster data bus to move data from the card to a device, capable of up to 20 Mbps.
Current generations of SD card max out at 512 MB, and are speced to run at a maximum of 10 Mbps. Cards smaller than 256 MB run at only 2 Mbps. All of those speeds are limited by the speed of the device to which they are attached, however.
Unfortunately, the new cards won't be appearing on the market for another year, until Matsushita believes that market demand has increased sufficently and production costs decreased sufficently to warrant producing the cards in bulk. Matsushita intends to have 2 GB cards ready in 2004, and then 4 GB versions in 2005, scaling up to 16 GB eventually.
Secure Digital is one of the three major card formats in use on handheld devices, along with Compact Flash and Sony's Memory Stick. Compact Flash cards have been available in capacities up to 1 GB for several months now, though the 1 GB cards currently sell for around $700 USD. Sony Memory Stick cards come in capacities as high as 128 MB, and it appears that Sony will be foregoing larger cards in favor of their encrypted Magic Gate sticks, which include copy prevention systems. As all three use essentially the same flash memory technology, capacities of all three formats should increase in tandem, depending on market demand and corporate interest in developing higher capacities.
http://www.infosync.no/news/2002/n/2423.html
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ot-Thinking Beyond the Box at Apple
Knowing that ever-faster machines no longer excite buyers, its push to make Macs your "digital hub" makes more sense every day
Nothing makes computer users reach for their wallets like a new generation of speedy machines, right? Not anymore. Today's consumers spurn even the fastest PCs with microprocessors surpassing 2.4 gigahertz -- four times the top speed three years ago. Typical PC users find such velocity superfluous, since their old machines are fast enough to handle most common tasks: writing memos and e-mail, crunching numbers, and playing games. The question the average consumer increasingly asks is: Why drop a thousand bucks for a faster computer?
To the PC industry, such thinking is lethal. It represents not just the bottoming out of a business cycle, but a seismic shift. It's the death of the business model that drove the industry for the past 20 years. Now, even as computers have raced ahead in speed, sales have slowed -- down 5% last year alone, according to Gartner Group. Declines were unheard of in the 1990s, when double-digit annual growth was the norm, some years even approaching 30%.
Apple understands this change. In fact, it saw the shift before just about anyone else. When CEO Steve Jobs began talking of making the Mac a "digital hub" for music, video, and communications two years ago, he wasn't just babbling marketing happy talk. He recognized, as B.B. King would say, that the thrill is gone: Consumers no longer lust after PCs.
KEEP THE FAITHFUL. Microsoft saw the romance fading, too. That's why it plunged into making software for cable boxes, PDAs, and the new hybrid cell-phone PDAs. It's even building a video-game player: the Xbox. But none of these initiatives generated much passion from consumers.
Not that Microsoft is giving up on the PC. Neither is Apple. For one thing, neither one can afford to. Gartner research shows that 80% to 85% of all computer sales are to veteran users, not newbies. This market has matured. Nearly everyone who wants a computer now has one. The trick is to keep the faithful coming back for more.
That's especially true at Apple, where most of the profits come from hardware sales. Software is just the candy that lures the buyers to the box. But a new box does entice buyers to upgrade software designed to tap into new advances in chip technology. It was a virtuous circle.
OLDIES BUT GOODIES. In the past year, the circle has lost its virtue. The upgrade cycle, if not dead, is on life support. San Francisco industry marketing consultant, Odyssey Ventures found in a recent survey that the number of PC owners intent on buying a new computer in the next six months had fallen to 11%, from 21% in 2000 -- the lowest level in five years. Half of PC owners today, Odyssey found, have had their computers for at least two years, the highest that number has been since 1994.
So what's a struggling computer maker to do? Apple's solution is twofold. One strategy is an attempt through aggressive marketing to redefine its core product. Apple, you see, would never make anything so humdrum and uncool as a mere computer today. What it makes now is a digital appliance which captures, stores, edits, and transfers any kind of digital file, whether music, video, or data. It's not just a computer -- it's something new, special, and must-have. You get the spin.
The second part of Apple's plan is to branch into new electronic devices. Along with the iPod digital-music player, rumors persist that Apple is working on some kind of cell phone or PDA-cell phone hybrid.
This strategy isn't unlike Microsoft's right now. Both companies secretly know that PCs aren't likely to generate techno-lust any time in the near future. So they're hunting for something that geeks will once again feel they can't live without. Of course, it has to be a device that either Apple or Microsoft controls -- the digital equivalent of the Holy Grail.
http://www.businessweek.com/technology/content/oct2002/tc2002109_6986.htm
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Verizon taps Listen for music plan
Wednesday, October 09, 2002
The local phone giant will offer Listen.com's music subscription service to its customers, one of the largest distribution deals yet for the music services company.
Verizon Communications said Wednesday that it would offer Listen.com's music subscription service to its customers.
The distribution deal through the local phone service giant marks one of the largest yet for the San Francisco-based music services company, which has chalked up a strong series of similar broadband deals in recent months.
As with other distribution partners, including Road Runner, DirecTV DSL and Charter Communications, customers will pay $10 a month for unlimited access to a huge--but still far from complete--library of music from the five major music labels and a long string of independents.
"It's like having a jukebox right in your PC," John Wimsatt, a vice president of marketing for Verizon Advanced Services, said in a statement.
Although subscriber figures remain unavailable for any of the major music subscription services, these services are finally approaching widespread availability. Many of the biggest broadband ISPs (Internet service providers) now offer services from Listen or competitor Full Audio. The music label-backed Pressplay service remains available though Yahoo and MSN, and the competing MusicNet service through RealNetworks' subscription plan.
Licensing restrictions on the music, however, have kept the services lacking basic features that many online music fans have grown to expect with unauthorized music download services such as Kazaa or Morpheus. Most of Listen's music is streamed, so that it must be played through a computer connected to the Internet, for example.
Pressplay and MusicNet boast the ability to download, and Pressplay offers some limited ability to burn CDs and transfer the songs to portable devices such as MP3 players. Most of the services are expected to include expanded CD-burning rights by the end of this year.
Despite the growing availability of the services, analysts do not expect substantial revenues from the monthly subscription services this year.
By John Borland, Staff Writer, News.com
http://www.businessweek.com/technology/cnet/stories/961389.htm
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Music swapping on the net rising
Wednesday, 9 October, 2002, 08:11 GMT 09:11 UK
As broadband takes off, so does music swapping
The number of users taking advantage of illegal file-sharing on the net is on the rise, according to new figures from analyst firm Jupiter Media.
Music accounts for the lion's share of file swapping and analysts warn that unless the industry offers real alternatives soon, the legitimate digital music industry will be stillborn.
As high-speed broadband net access is takes off across Europe, so is the amount of music swapping, according to the Jupiter European Online survey.
Nearly 40% of surfers use their broadband connection for sharing music on the net.
Stillborn
This compares to just 18% for surfers with a dial-up internet connection.
Online music
39% of broadband users swap music
18% of users with dial-up use file-sharing services
44% of net users would not pay for music
Perhaps even more worrying for the music industry is that 44% of net users admit that they do not want to pay for online music in future.
"The digital music industry in Europe is in danger of being stillborn," said Jupiter Media analyst Mark Mulligan.
Despite initiatives such as Digital Download Day, the majority of content from the major music labels remains offline.
Such tokenism towards the phenomenon of digital music will not wash with users said Mr Mulligan.
Stopping the music
File-sharing is very good at reinventing itself
Mark Mulligan, Jupiter Media
"Legitimate file-sharing so far has just been about setting the tone and finding out what consumers want. There needs to be concerted action from record labels against peer-to-peer or strong enough alternatives," he said.
Even if the record industry threw itself wholeheartedly into digital music, it will have a job to stop the post-Napster file-sharing services he said.
"It isn't going to kill it off. File-sharing is very good at reinventing itself," said Mr Mulligan.
However it is not all bad news for the music industry.
According to the survey, double the number of people who had used illegal file-sharing sites would be prepared to pay for music compared to those that had never used such services.
This might be down to the fact that users are increasingly becoming irritated by the number of advertisements and the file quality available with such services, said Jupiter Media analyst Dan Stevenson.
He believes that peer-to-peer networks will decline and legitimate services will grow.
Swapping porn?
Recently European internet service provider Tiscali signed a deal with popular file-swapping service Kazaa.
The decision has been questioned in the industry because it ties the internet service provider to a company which could face legal action from the record industry.
Mr Stevenson does not think this is the way forward and suggested that internet providers might want to avoid music altogether.
"Using peer-to-peer for adult content or games might be better revenue drivers," he said.
http://news.bbc.co.uk/1/hi/technology/2309671.stm
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Life After Napster
By Jay Dougherty
October 7, 2002
Will Internet Users Pay for Music?
For many Internet users, Napster was easy to get along with. Swapping digitized music was as simple as logging on, opening the program, searching for songs or artists, and downloading.
But thanks to a U.S. court ruling last March, Napster is now history. New programs, though, in conjunction with websites, have come along in an attempt to make some history of their own. The challenge: Come up with a business model that will persuade Internet users that music is worth paying for.
There are many music sites out there scrambling for the attention of Internet music fans, but few seem to stand a better chance than most of surviving. Here's a rundown of what you can find:
Napster
www.napster.com
Why search for alternatives to Napster when Napster still exists? The reason is that the "new" Napster differs significantly from the old.
While the Napster service has done its best to preserve the look and feel of the old Napster, users now will have to pay anywhere from $5 to $10 US per month for 50 downloads - plus the ability to swap music with other Napster users.
Napster currently has an estimated 110,000 tracks available, mostly from independent labels. The new Napster is currently in a beta version; the service is expected to become operational in the near future.
Emusic
www.emusic.com
Emusic's claim to fame is that it allows subscribers to download songs in MP3 format. MP3, although very popular as a way of storing music digitally, is not widely supported among music sites that ask you to pay to download songs. That's because MP3 is not officially supported by the recording industry.
Since the recording industry views the MP3 file format as a threat to its existence, music sites that support MP3 will not be able to distribute songs from many of the popular recording artists.
So Emusic doesn't offer many stars - with the exception of Elvis Costello and a few well-known jazz names. What it does have are agreements with some 9,000 independent labels. The site offers a free trial; otherwise, unlimited downloads of MP3 titles cost just under $10 US per month.
PressPlay
www.pressplay.com
Like Emusic, PressPlay offers prospective subscribers a free trial, which is good for 14 days and includes 20 free downloads.
Unlike Emusic, PressPlay has assembled an impressive list of agreements with major music labels, including Sony, Universal, and EMI. That gives PressPlay's subscribers access to such artists as Aerosmith, Santana, Mariah Carey, and many more.
The catch: PressPlay does not offer music in the popular MP3 format. Instead, subscribers download music in a proprietary format and can only continue listening as long as subscriptions are active.
RealOne
www.realone.com
RealOne is based upon the MusicNet partnership sponsored by AOL, Germany's Bertelsmann, Time Warner, and EMI. As with the other pay services, with RealOne, users are expected to pony up just under $10 US per month.
RealOne boasts more than 100,000 titles from popular artists, including Backstreet Boys, Madonna, and Elvis Presley. The service, though, is rough around the edges, and it may be hard to accept for Napster lovers who are used to getting their music for free.
With RealOne, subscribers are in essence "renting" the tracks that they listen to. The basic membership fee gives subscribers a certain number of "credits," with which they can either listen to or download music. Tracks that subscribers download are limited to one PC, a fact that will no doubt anger some. Creating your own CDs from downloaded tracks is also forbidden.
Rhapsody
www.listen.com
Rhapsody, a new music service from listen.com, differentiates itself from sites such as RealOne by offering users unlimited playback of subscribers' favourite songs. After a free seven-day trial, subscribers pay $9.95 US for access to Rhapsody's entire catalogue. Rhapsody offers its subscribers access to lots of radio stations in addition to individual songs. It also makes it simple to switch from exploring exotic radio stations to searching for, and sampling music from artists in virtually any genre.
The Bottom Line
While it's clear that many of the commercial music services online are indeed a little rough and ready, users may well wonder what they offer at all. The answer, the services hope, is a virtual music store on a PC. The front-end programs for all of these services attempt to integrate music listening with the multimedia and informational capabilities of the Internet.
In short, the advantages of these Internet-based music services are obvious when compared to traditional music stores.
So, are you willing to pay?
http://www.digitaljournal.com/print.htm?id=2810
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NEW D&H MODEL/ NOT BROADLINE, JUST BROADER -- Named preferred white-box distributor
September 24, 2002 12:00am
CMP Media Inc.
CRN via NewsEdge Corporation : New York - At first glance, any channel pundit would think D&H Distributing is changing its model to become a broadline distributor.
The company-which has always prided itself on holding a limited, carefully selected line card-has spent the last two months adding almost as many new products as some of its larger counterparts.
But Dan Schwab, vice president of marketing at D&H, says longtime customers shouldn't worry about the company's seemingly rapid expansion. There is a method to the company's growth.
"Our goal is to be narrow and deep, but don't expect us to be everything to everybody," he said. "When we pick up a vendor, we make sure it adds value. Because we've become such a strong destination for white-box builders and integrators, it has forced us to evolve and offer more products."
D&H has served the white-box market for years but has increased its focus over the past six months. The company recently became the preferred national distributor of the North American System Builders Association (NASBA), a consortium of 9,000 white-box solution providers. Over the past few years, the group has worked with vendors to develop programs suited to its members.
The problem was finding a distributor that could bundle the programs with product and deliver it to a wide audience, said Robert Danese, NASBA's executive director.
Then the Atlanta-based group approached D&H.
"We couldn't get distributors to pay attention to our base," Danese said. "Our members rely extensively on distribution. One thing that's really important is that we have a distributor that helps our members save money and make money. D&H has always been successful in the small-business space, and they've been a tremendous partner for us."
Over the past few months, D&H has worked with several vendors to develop NASBA-specific programs. The latest includes discounts on Cyber Acoustics speakers, voice-activated microphones and headsets, as well as free marketing materials. NASBA members can buy the product from other distributors, but they don't receive the same vendor programs they do from D&H, Danese said.
Some of D&H's newest products include Riverdeep's FoolProof Security software, Unitech graphic cards, Plextor CD-R drives, Authenex password-replacement devices, Dicota accessories, e.Digital audio products, Hawking Technology networking solutions, Hansol monitors, EnGenius wireless LAN routers and NESO displays.
Don Limacher, channel sales manager at EnGenius, has dealt with other distributors while he was working at different companies. and D&H has one attribute that other distributors seem to be ignoring: "They're very relationship-driven with their customers. When a company like EnGenius is new to distribution, relationships like that are key to getting us into new accounts."
Chris Chiang, sales manager at NESO USA, also said D&H will help push the vendor's products into the SMB market, the sweet spot for most vendors today.
"We've worked with a lot of smaller distributors, but D&H had the experience and dedication we needed," Chiang said. "What distinguishes D&H from other distributors is that they have a better understanding of how to penetrate the SMB market."
Stuart Lipman, owner of Lipman Computers, South Windsor, Conn., agreed: "[D&H has] quality parts that are always in stock, and I get them at a consistently good price."
Lipman said he does some business with Tech Data but buys most of his product through D&H "because when you're loyal with one vendor, they're loyal to you."
While D&H will continue to make selective choices for its line-card, solution providers can expect a steady flow of new products and product in the coming months, Schwab said.
"We've always focused on the SMB and white-box solution providers because we've seen too many people ignore them," he said. "Regardless of the competition or the economy, there will always be small systems builders and VARs. We have to continue to work with different vendors to develop programs that help them."
http://www.crn.com
Copyright c 2002 CMP Media LLC
By Jeff O'Heir
http://www.wirelessweek.com/index.asp?layout=story&articleId=NEc0923003.9mp
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