Thursday, December 13, 2012

Optical Interconnects

Some years ago, Gene Amdahl was mounting a second startup. His first, Amdahl Computer was reasonably successful and subsequently sold to Fujitsu. The second startup was called Trilogy, it was an effort to build macro-scale processors that occupied an entire silicon wafer rather than just a chip. Though Trilogy came and went, it was a big deal at the time. The reason why the company is now just a historical footnote is that they ran into an insurmountable technology issue. They had no way to package the wafer. Specifically there was no way to get signal from one side of the wafer to the other. At the time, optical communications technology was still in its infancy. Trilogy approached Corning about developing an optical package but, of course, it was well beyond the capability of the optical technology as well.

Over a decade later, the issue came up again. As processor chips became denser, not only clock skew but interconnect densities started to become a problem, there was just not enough linear space at the edge to keep up with larger and more complex chips. Again, the obvious solution was to move to optical I/O. After another decade plus period of development, IBM has announced that the technology is ready to go. What this means is a few things. First, Moore’s Law gets another one of those needed breakthrough’s to keep it on-track. Second, with chips communicating optically, it is likely that you will now star seeing optical cabling inside computing devices rather than just a T3 fiber line leading to the building where they are housed. Third, rather than fiber reaching into the home (FTTH) or premises, you might see optical pathways directly from the device reaching out to the network.

In the optical networking world, there is a concept called “transparency” keeping the signal optical for a long as possible. Before the development of optical amplifiers, optical signals had to be periodically converted to electronics and regenerated as an optical signal. Given the processing and rise time of the electronics, it was much like flying a plane across the country but have to land every few miles and change planes. Transparency meant that the plane no longer had to land until it was near its destination. Optical I/O, optical output from computing devices may mean that the optical signal will eventually no longer have to drive to the local airport to catch its plane but can take off from right inside your PC. The results will be data rates that make today’s connections look like dial up. This scenario is probably another decade or so away, but an important threshold has been crossed.

This may also have some tendency to roll back the current "mobility boom" in favor of wired connections. Although wired connections tend to have inherently more bandwith than wireless, the wireless industry has been quite clever regarding signal processing and compressing more and more data into the spectrum available. Transparency right up to the processor may be more than can be matched by increased data compression presuming there is some application that could make use of it.

Tuesday, December 11, 2012

More is Better II (more of the same)

An old joke…. A man sees another man standing under a streetlight staring forlornly at the ground. The first man asks, “What’s wrong”? The second responds, “I dropped my car keys and can’t find them.” The first man looks at the pavement, clean and uncluttered, no sign of the keys. He asks the second man, “Are you sure you dropped them here?” The second man responds, “No I dropped them over there”, pointing off in the darkness. The first man, confused, asks, “Then why are you looking here?” The second man responds, “The light is better here.” (Image from Monk Wisdom.)

The joke is an illumination of the sometimes absurdity of looking for answers in a place of convenience rather than where you are most likely to find them. I once worked on a product, an optical film that had severe manufacturing issues. Unfortunately the work group was arranged so that all of the chemists were on the east coast where the factory was located and all of the optics expertise was on the west coast. The factory continued to look for a chemical solution to what proved to be an optical issue until the business was closed, a possible optical solution waiting, untried.

The LCD and TV industries do not have fatal issues keeping the product from the market, but the industries do suffer from a lack of innovation. Tim Cook’s recent pronouncement, “When I go into my living room and turn on the TV, I feel like I have gone backwards in time by 20 to 30 years” refers to a product that has some considerable staleness. If you follow the industry, there has been no lack of innovation, but much of it has been as effective as looking under a random streetlight instead of looking at the issues. Indeed, Tim Cook’s own company is guilty of this. In a previous posting, “More is Better”, I refer to the continued growth in pixel count in mobile devices when they obviously have severe sunlight viewability problems. Although a shortage of pixels was a real impediment to running complex apps (Graff Spee) for mobile devices, that seems to be a solved problem as pixel densities exceed human eye resolution.

In TV there have been even more innovations: ever improved image processing algorithms, “Connected TV,” “Smart TV”, 3D, and as if the TV also suffered from a pixel deficit 4K. Raymond Soneira deals with the efficacy of the 4K set quite succinctly in “Your existing HDTV is already a true 'Retina Display' ” . 3D seems to have arrived ahead of its time. “Connected TV” and “Smart TV” seem to be getting some yawns from Apple that, if Mr. Cook is to be taken seriously, has a mind to upend those developments. As to the algorithms, every digital manipulation of the image leaves its own set of digital artifacts. Particularly, as now when people are watching both digital and analog content, the digital manipulation of faces can leave a flat and cartoonish image with the wrong content source. Further the delay caused by the image manipulation can leave the picture out of synch with the sound if the sound source is not the TV itself. Interestingly, on higher end sets, they frequently have a gaming mode where you can turn off the image manipulation to keep the delay from disrupting your game. In many cases, video content looks better in gaming mode as well.

If you look historically at what innovations in LCD and TV have and have not made a difference, there is something of a pattern. In CRT real improvements were made with improved design: Trinitron and Black matrix, improved materials: invar shadow masks, black (36% transmission glass), new sources: cable and the vcr, and an improved usage model: home theater. There were also, of course more minor tweaks in design and materials as well as such things as Picture in Picture (PIP) the came and went. In LCD there was improved design: IPS and overdrive, improved materials: BEF, LED backlights and the optical rubbing that enabled multi domain, improved usage models: touch and going to wide screen, and any number of other innovations that have yet to leave a substantial permanent mark. Although there are occasionally electronic manipulations that prove to be indispensable such as overdrive, the big changes are frequently the introduction of new materials that materially change the optics of the device.

The TV may be in for a round of innovation as Apple threatens to fundamentally re-think the TV usage model. If Apple follows true to form, they will certainly push the technologies but will not hinge their new product on fundamentally new technology or more pedestrian approaches such as improved software. In Digital Signage, there is substantial room for innovation as well. Though it is still common for new implementers of Digital Signage to use TVs, the design requirements are different. Indeed, even for purpose built Digital signage screens, many of the design trade-offs embodied in current LCD production are optimize around the TV application but may not fit well with the varying environments and applications of Digital Signage. A re-thinking of digital signage design may be in order and some of that re-thinking may find its way into the general TV market as well. Much of this may be connected with the optics and materials used in the display rather than just the electronics.

Of the more prominent hiccups with the iPhone 5, two of the three (the choice of the sapphire lens cover and the anodized aluminum case) involved some new materials experimentation. The original choice of Gorilla Glass, is a materials experiment that went well; it was helped by the glass expertise of those familiar with that materials system. The challenges of mobile devices are different from the challenges digital signage but the idea of looking for a solution in the materials may be common. This does not mean waiting for IGZO or large size OLED technology to come down in price.

Monday, December 10, 2012

The Antique in the Livingroom

Tim Cook, “When I go into my living room and turn on the TV, I feel like I have gone backwards in time by 20 to 30 years."

Isn’t it interesting that while a phone is principally an audio device, it is virtually impossible to find a cell phone without a built in camera; whilst a TV is a video device but does not have a built in camera? As an audio device, the phone has become a primary tool for selling music. As a mobile internet connection, it has other uses but I think most of the revenue is in music sales. Although there are other media, the TV is the primary tool not only for selling video but everything else. Much of the rumor about why the rumored Apple TV set has yet to make an appearance surrounds resistance from the video content owners from doing a deal on Apple’s terms.

When Apple’s CEO, Mr. Cook, refereed to stepping back in time 20-30 years when he watches TV, he probably did not mean the screen (there is much speculation that although an Apple TV set will be state of the art, it will state of the art for current screen technology). Mr. Cook could have been referring to the lack of interactivity. But he may have been referring to the entire usage model including the content. Not just the videos, but the way the TV is used as a marketing platform. Much of apple’s business in connection with the iPhone revolves around purchased content. The ad-supported content market is much bigger. Certainly, the counter to a new Apple TV set oriented around purchased content would be one that could more generally serve as an advertising platform as the current TV set does but with a more net centric marketing approach. Although Apple may launch a curve ball or two in the hardware of an apple branded TV set such as a new aspect ratio, the big surprise may not be in the hardware or the software for that matter but in the content generation, a new way for marketers to pitch their product interactively.

Thursday, December 6, 2012


The headline is, “Mitsubishi Drops DLP Displays: Goodbye RPTVs Forever”. Like 3D, projection TV got off to a bad start. The first widely available projection TV was the Kloss Videobeam (Henry Kloss was the K in KLH). It was based on a single color CRT (driven very hard) and projected on a specialty curved screen. The product had a number of difficulties. Being front projection, it had to be viewed in the dark. Even so it was dim. The curved screen had multiple problems as well. It could not be cleaned with conventional cleaners without leaving a lasting residual in the image on the screen… and it was added expense.

One by one, these problems all were fixed; but not by Kloss as they were immediately displaced from the market by the Japanese with a 3 tube projector design. Due to the loss of energy and light caused by the shadow mask in a color tube, a monochrome tube can be 5 times as bright as a color tube. Having three monochrome tubes (a red, green and blue) in a projection set made for an image that was 15 times brighter. Improved optics did away with the curved screen and switching from a front projection to a rear projection format meant that it could be viewed in a lit room; RPTV was born.

These improvements eliminated the initial problems with projection TV but created new ones as well. Early RPTVs were difficult to align and the sets in consumers’ homes were frequently not aligned. Also the lenticular front screens did a great job of spreading out the light from left to right but had little effect distributing light vertically. Many projection sets were used as public displays in bars and placed up high where the primary light from the display went over the heads of the viewers. The result was in your neighbor’s house and in public, when you saw an RPTV, it usually looked terrible. One other aspect remained as well, driving a CRT very hard meant that it necessarily had a short life span, significantly shorter than consumers were used to.

By the mid 1990’s, after 20 years of fine tuning, projection TVs had gotten to the point where consumers did have a hard time telling them from direct view CRTs. In consumer surveys taken at the time, many consumers reported buying 45” and 55” direct view sets even though direct view was never sold in these sizes; they were obviously projection sets. In addition to improving the screen and making alignment much easier, RPTV makers had incorporated clever folded optical paths, decreasing the RPT set thicknesses from feet to inches. Further, as HDTV with the transition to 16:9 was in the offing, RPTV looked forward to a bright future as CRTs were fundamentally ill-suited for the wider format.

Also beginning in the 90’s, new RPTV image engines were being developed. Most famously, TI developed the DLP, a micro-mirror technology using an external light source. Also Liquid Crystal on Silicon (LCOS) showed promise. The first DLP sets were expensive, and in-part to hold down costs, it was designed as a field sequential color set with a color wheel, as were the first color TV set designs from CBS. Of course, introducing a mechanical component into what had been a purely solid state device meant that these sets had maintenance issues. As with the original Kloss Videobeam, these single imager designs were rapidly dropped for 3 imagers. However even the improved design had maintenance issues as well as the high performance light source tended to have a life of only 2-3 years. This meant that the set still had to be actively maintained. Though makers took to packaging an extra bulb in the sets that they shipped, Consumers were frequently not aware of this and had to spend $200 to replace their bulbs the first time they burned out. Even so, replacing the bulb could be tricky as oils from your hand could cause early failure of the bulbs and even when the first bulb was used and installed correctly, the owner was still faced with making significant purchase every few years to maintain their set.

In spite of all of these issues, RPTV sales grew as they were actually a great value compared with large sized Plasma at the time. However, as Plasma got cheaper and LCDs grew in size and capability, RPTVs value story diminished. The loss of value was exacerbated by, in my opinion, a failure to tell a good marketing story to consumers. TI made some direct efforts to promote DLP but their commercials were ineffective and lacked a clear message to the consumer about why RPTV sets were better for them. Even today, with the HDTV transition having well passed, the average size LCD set being sold is only about 38”, much smaller than what is needed to fully take advantage of HDTV resolution. There have been significant pushes by the set industry as a whole on each new feature, frequently this in opposition to getting the consumer the proper sized set. Though both LCD and Plasma offer very thin sets, thinner than what can be made in RPTV, most American homes are not at a loss for space. American consumers really need to have larger sets and telling them this should have been the mission of the RPTV industry.

Mitsubishi positioned itself as “the large screen TV Company” and was the last maker of RPTV. However, lacking the marketshare and marketing dollars to make an impact, it was only a matter of time. The RPTV story has several lessons for other technologies as well. Being introduced with obvious visual problems, it took a couple of decades for the technology to shake off its initial bad impression. Plasma still suffers from a perception of image burn-in. Some of the initial 3D sets had bad flicker issues.

Most RPTV sales were in the US; in the beginning, virtually all RPTV sales were in the US. Though I sometimes criticize pyrrhic marketshare battles, there is significant value to a technology having a global appeal. Though the US is unique in being both wealthy and having large homes, the public information display/digital signage market is global. Significant numbers of RPTVs were bought here as public information displays, maybe as much as half in its early years. The set makers, in general never recognized this as a significant market until recently but the market has always been there. If RPTV had built some momentum in the early years it could have been doing fine in digital signage as well. But of course, in the US with the ADA requirement of nothing sticking out from the wall by more than 4” any RPTV installation has to be either high up or floor standing both of which are not particularly well suited to a retail environment.

Wednesday, December 5, 2012

How RCA Lost the LCD

From the IEEE Spectrum article, "Today, companies in Japan, South Korea, and Taiwan dominate the LCD industry. Meanwhile, the corporation that started it all has faded from memory, purchased by General Electric in 1986. Nevertheless, RCA’s technological legacy can be seen in every LCD wristwatch, calculator, laptop, and television. All of these screens trace their origins to that firm’s laboratories and factories. As much as they are portals to the digital future, liquid crystal displays are also reminders of a past filled with possibilities for the once-dominant American electronics industry. And in their story are lessons for any technology company willing to learn them."

Masahiro Kadomatsu, the former chairman of Asahi Glass used to remark about how US scientists could be so inventive while US management could be so awful, particularly being short sighted. At one point in time, Kodak was the world's sole source for liquid crystal, Corning's sunglases plant in Harrodsburg, KY was the sole source of LCD substrate glass. RCA developed the liquid crystal chemistry as well as switching mechanisms such as IPS and Westinghouse, invented the active matrix driving technique. Of these 4, only Corning retains a place in the LCD manufacturing supply chain. For the others, particularly for RCA, bad results from management decisions overwhelmed great technology coming out of their labs. There was a period of at least 50 years when every new major consumer technology went through a period where it only existed at RCA's Sarnoff Labs, now Sarnoff is no more. For a more complete history of LCD development see "Liquid Gold: The story of Liquid Crystal Displays and the Development of an Industry", there is an Amazon link to the book in the Recommended section on the sidebar. The book was written by Joe Castellano, a former RCA researcher and the inventor of IPS.

Friday, November 16, 2012


Batteries are something of a conundrum. On the one hand, there is the continuing need for better batteries in mobile devices, longer last, storing more energy in a smaller space and with reduced weight. On the other hand, batteries can sometimes fail catastrophically. The higher the energy density (the more energy stored per gram or per unit volume) the greater the consequences of a catastrophic failure. In fact a bomb can be considered something of a battery, lots of energy stored in a compact space. Though the reaction that releases the energy is not reversible and it is hard, though not theoretically impossible to power a car with gunpowder (per Huygens), it is an efficient energy storage device. Today's batteries are less efficient but still share some properties with explosives, especially when they fail. With rechargeable batteries, dependent on a reversible chemical reaction, there is always the possibility that physical structures embodied in the two chemistries (anode and cathode)will bridge, resulting in a short. They can generate high temperatures, melting themselves, melting the device they are in, and potentially starting fires. This is a rare event, but, again, major increases in energy density would make a catastrophic battery failure much more consequential.

Of course, aside from better batteries, the best way to deal with battery life is to lower the energy drain. As the most energy intensive part of most mobile devices, the primary focus has been on the display and display related subsystems. Monumental progress has been made here and further progress continues to come. A second path has been to remove the mechanical components from the device, specifically the optical drive. Spinning up the drive, takes substantial energy. Further, as removable storage is more a form of communication, simply relying on the internet rather than a disc makes sense along several factors.

Battery improvements and reductions in power drain can carry battery life only so far. Most likely, in the future, there will be more ubiquitous application of wireless battery charging. However, wireless battery charging only gets rid of the power connector, not the need to access a wired power source. The original "One Laptop per Child" design had a hand crank to generate power as a wired source for the intended user set might be unavailable not just inconvenient. Of course, cars used to be hand cranked to get them started and watches had to be wound. There is another watch technology that might be relevant as well, energy harvesting. Self winding watches are less popular, as watch batteries have gotten better, but it is still viable. With improvements in micro-machining and 3D printing, energy harvesters can be mad very small and durable, I would think just the thing for a mobile device. As with better sunlight viewability, I expect someone will at least try marketing a device more adapted to actual usage models. Perhaps energy harvesting will not show up until the mobile market fully turns its attention to wearable computing.

More is Better

Today's lead article in VentureBeat discusses the new iPad Mini. Though the term "display" is used 5 times in the article, extolling the importance of the display, the lead-in photo (shown here) shows just how challenging it is using a mobile device outdoors. As seen in the photo, the contrast could not be much more than 10 to 1. In "Wither Pixel Qi" I discuss my surprise that the mobile industry does not move toward displays with better outdoor visibility. Though generating good color in an outdoor display is something of a challenge, there are alternatives to a standard LCD that provide trade-offs that might be more appropriate for a mobile device.

The author also goes on to give a generic definition of a "retina display","...instead of the lush Retina Display resolutions of 2048 by 1536, we get the same 1024 by 768 resolution we were so happy to run away from two years ago. (Since the iPad Mini’s screen is smaller, its resolution still looks sharper than on previous iPads.) It is described as a pixel format rather than a pixel density (pixels per inch) or a brand name. In, "Your existing HDTV is already a true 'Retina Display' ” in August's High Resolution Raymond Soneira explains the human factors of the pixel density perspective on classifying displays. In describing how the display "looks sharper than previous iPads" the VentureBeat author also makes reference to the human factors but at the same time ascribes the 2048 x 1536 resolution as "lush" apparently independent of screen size or pixel density.

As display professionals, we know, that especially in small displays, more pixels = less aperture which equals a dimmer screen. The challenged performance of the screen in daylight, as seen in the image would be that much worse with a "retina display" per the author's terms. However, in the minds of many, more is always better even when their eye's tell them such is not the case.

In "Trinitron, Retina, & What do you call an Apple TV" I compare the Trinitron name with the marketing mojo in "retina display". In a large sense, Trintron had an advantage in that most consumers had no idea what a Trintron was, only that it was better. Others could introduce sets using the trinitron technology (such as Mitsubishi's Diamondtron); however, because they could not use the Trintron trade name, Sony was in an unassailable position. If consumers have a specific idea what "retina" means, a specific number, then it is a small matter to equal or even out-do "retina" with a "more is better" spec.

Even better, someone can fix or improve the daylight performance. As I have related before, in TV set marketing, frequently the industry will focus on a specific spec, pushing it to performance levels beyond human comprehension.... until someone steps out of line and starts pushing a different spec. Brightness wars, were followed by contrast wars until the CRT industry settled on Black level. In the mobile wars, fixing the resolution issue was an obvious first step to enabling smartphones as a platform. Now that the issue is fixed, I expect that the device makers will move on. If more is better, how about some more outdoor contrast.

Saturday, November 10, 2012

Federated Media Abandoning Banner Ads

"Federated Media plans to refocus all its resources into the two areas of advertising it believes is growing. The first is its premium conversational & native advertising, which includes sponsored posts, special coverage sections, and ads/promotions that are more directly integrated with a publisher’s content. The second area is in less expensive, “programmatic” advertising, which automatically displays ads on websites at all times. The ad agency purchased startup Lijit in October 2011 as a response to the growing demand for programmatic ad buying."

Personally, I have pop-up blocking enabled and other ad blocking software. On most sites I never see the advertising except for that which is integrated with the content. In "Cross Platform Portability" I relate why it is important to have consistent screen aspect ratios to enable ads on the content periphery. With banner ads not proving their worth, frequently not actually being visible, programmatic ads become that much more important.

Friday, November 9, 2012

Will NFC "Sweep Away" QR Codes?

In "Can We Talk?, I discuss various means of linking mobile devices to both TV and digital signage. The posting concludes that there will be a diversity of communications methodologies. Recently, I saw a news article suggesting the resurrection of IR, as I had discussed. This comes to mind as I read today's "Digital Signage Today" proclaiming NFC will sweep away QR codes.

NFC is, of course, more versatile than a QR code as it can be an active data link rather than a signal and can be bi-directional rather than one way. However the one way and the opt-in nature of QR codes gives inherent security. The one instance where security is mentioned in the "Digital Signage Today" article it refers to a mobile device emulating a secure card such as a hotel key. It seems to me that, although I have never had my pocket picked, capturing someone's NFC information would be easier. Line of sight optical communications such as reading or displaying a QR code seems inherently more secure. Airlines allow a bar code display as a boarding pass. We shall see if they expand this to include NFC. As to Hotel rooms, my preference would be a QR code reader.

This is not to say that NFC use is not going to expand rapidly, but some applications seem much better suited to QR codes.

Thursday, November 8, 2012

The New America v. the Old

Much has been made of Mr. Obama's near unanimous support among minority voters. The state with the highest percentage of Black people is Mississippi with over 37%. With Mr. Obama getting well over 90% of the Black vote but only getting 44% of the vote in Mississippi, it is apparent that the vote in Mississippi is approximately as racially polarized among White people there as among Black. If those figures could be further refined for "White Men" no doubt you find an even higher degree of polarization. Mr. Romney had his own near-unanimous voting blocks, that were as large or larger than Mr. Obama's.

Conversely, Vermont has the second lowest percentage of Black population of any state, less than a percent. There are not too many Hispanic people there either; but the state gave Mr. Obama one of his highest winning percentages. Absent Mr. Obama and the democrats having some hidden plan to subsidize the maple syrup industry, it would be reasonable to conclude that the Vermont population is markedly different from Mississippi aside from racial composition.

The Obama team did well when the economy would otherwise have pointed to their defeat, in part because they were very analytical about how they approached the election. They also did well because their team itself was diverse and their message was targeted toward a diverse population. In effect, they expanded their shelf space and went looking for votes in places the Romney team did not. Although, even collectively, minorities in the US are still a minority, a message crafted for everyone and targeted for differing demographics won out over a message that just resonated with the majority. As the minority actually becomes the majority in the US, today's newspapers are filled with recriminations about how the republicans will re-tool themselves and re-tool their message

So why the political discussion on a TV blog? The consumer electronics market has much more in common with an Obama demographic than a Romney. The consumer base is younger and diverse. One would expect that the marketing leadership of the industry would start to resemble the people that they market to in this country not only ethnically but by gender as well. Pursuing the pages of the trade press, looking at the faces, one gets the impression of the Old America rather than the New.

No Apology

One of the virtues (and one of the burdens) of Japanese society is the extreme emphasis placed on loyalty. Loyalty to the country, to one’s ancestors, sometimes even above right and wrong. It is this loyalty that allows the Japanese prime minister to occasionally lay flowers on Prime Minister Tojo’s grave even though he was hanged as a war criminal. It is also this loyalty that prevents Japan from expressing remorse at its actions prior to and during WWII. Japan, as a country pays a heavy price for this and Japanese multinational companies pay this price as well.

TV set sales are down precipitously in Japan because of the aftermath of the Tsunami, the expiring of domestic energy tax credits for TV set replacement, the general slowdown in the economies of Japan and the rest of the world. The one bright spot in the market has been TV set sales in China. However, due to friction between Japan and China over Japan’s actions during a war that ended almost 65 years ago, that market is largely lost to Japanese TV set makers. No apology.

In the recent US presidential election, sitting President Barack Obama defeated his challenger Mitt Romney. One issue that was frequently brought up in the campaign was the president’s supposed “apology tour” shortly after assuming the office. Mr. Romney also titled his autobiography, “No Apology". Transcripts show that although the president mentioned that the US has not always behaved as it should, he never actually apologized for anything the US has done. Though it would certainly cost him politically, perhaps he should. The US has not always behaved as it should and conveying some humility and regret would be a good thing.

Mr. Obama’s reelection was greeted favorably around the world. Although the election was close here, polls taken oversees, of non-US people, showed virtually no support for Mr. Romney and the “no apologies” approach. Although there is some friction between the US and China, there will be no US-China trade war starting on inauguration day as Mr. Romney had promised.

Thursday, November 1, 2012

Hello Computer: Will Non-touch Screens go Extinct?

In one of the earlier Star Trek movies, the crew travels back in time to the then current era and has to interact with the computers of the day. Scotty addresses the computer by talking to it. When presented with the mouse, he talks into the mouse. Although seeming not familiar with the mouse Scotty is quite facile with the keyboard. He never attempts to touch the screen nor does the desktop have anything like a touchpad.

Although voice and gesture is growing, today it is touch that commands attention. In the early days of color LCD, Apple was one of the last notebook makers to go to color. They lost share and later in one of those "Crystal Cycle" events when there were shortages of notebook screens, Apple was down the list when it came to LCD supplier shipments. Leading the charge in touch, the company secured adequate supplies for all of its products in advance of the rest of the industry. Now it seems it's everyone else's turn to struggle for supply.

Intel is predicting that a majority of Ultrabooks will have touchpanels in 2013. So the question is do the ones that don't, don't have them due to designer's choice or lack of supply. Further, as interacting with the screen becomes "normal" will non-touch screens still have a place on devices meant for close proximity human interaction.

Please voice your opinion in the survey at the bottom. Please also feel free to leave your comments.

Monday, October 29, 2012

Cross Platform Portability and the Spanish Armada

In an earlier posting, I argued that video platforms were like battleships, that as there was some combination of gun size and armor that made senses for a naval platform, there was some combination of screen size and computing power that made sense for a video platform. Further, as most unmatched naval platforms (the Graff Spee being an example) were failures; video platforms that had too big or too little screen size were not going to be successful. That equation has been somewhat upended by ever increasing screen resolution. However, as resolutions reach human visual limits, I think a new equilibrium is established. The image above is from

A new issue comes to fore that also has something of a naval analogy, that is screen aspect ratio. Apple recently modified the aspect ratio of the iPhone going to a 16:9 for the iPhone 5 form a previously more square format. The decision was motivated by a desire for a larger but not wider screen to retain its one hand use capability. 16:9 being the TV format is fortunate circumstances for "TV Everywhere" but most movies are, in fact, made in wider aspect ratios and cut down for TV. So, there is no guarantee, that future product might have even more elongated aspect ratios. Additionally, as new platforms develop (wearables, new forms of tablet notebook and TV) a diversity of aspect ratios might proliferate.

Currently content is supported by two complementary business models: purchased content and ad supported. The effect of differing aspect ratios differs greatly between the two models. In the purchased content world, as long as video content can be trimmed, or letterboxed with reasonable screen utilization, all is fine. In the ad supported world, with ads being placed in specific locations on the periphery of the screen,the actual layout of the screen is paramount if you are going to establish or maintain a multi-platform strategy. Maintaining any ad supported strategy gets more difficult in smaller and smaller screens as type sizes diminish into the unrecognizable. The art of placing ads on the periphery of the main content is one of the vexing issues for Facebook as it attempts to become more of a mobile app. But as I noted, the applicability of the ad supported model diminishes with smaller screen size and with uncertain aspect ratios. In the late 1580's, there was another multi-platform strategy that went down to defeat because of physical dimensions. The Spanish Armada was assembled with a core of actual Spanish warships and a variety of other ships that were mostly armed merchants. They all carried cannons, but the cannons were of different sizes and it seems that provisioning each ship with the right size munitions was an issue that the Spanish dealt with poorly. Many of the ships were unable to fire on their English opposition. The Spanish multi-platform strategy was a failure before it even left port.

TV makers have recently begun experimenting with "Cinema Wide" 23:9 aspect ratios to better accommodate cinematic content. New, "wearable computing" platforms are being developed, smart phone and tablet aspect ratios are the OEM's choice. Again, this fits well with a purchased content business model but not with ad supported content.

Friday, October 26, 2012

After The Storm

And after the storm,
I run and run as the rains come
And I look up, I look up,
on my knees and out of luck,
I look up

Opening lyrics to "After the Storm", by Mumford & Sons

In the February 2009 edition of “LCD TV Matters” I published an article forecasting a quick turnaround in the US TV set sales while the economy was still in free fall and shortages by 2010. The economy did recover somewhat and there were shortages for a time in 2010, but the recovery stalled and it continued to feel like we were in a recession in spite of a growing GDP. The reason for the forecast was simple. TV set sales, while certainly not recession proof; tend to be very steady over the long term. In a recession, set sales actually accelerate during the initial phases then plummet as the recession takes hold. However, these sales are not really lost, just postponed per the model developed by Jeff Johnson when he was at Philips. Long term set sales depend on things like interest rates and household growth. There can also be exogenous events such as the introduction of the VCR and the transition to HDTV that spur additional sales beyond that.

In the October 2012 edition of “High Resolution” I stick my neck out again. The article was actually written during the summer forecasting a bottom for TV set sales in Q2 of 2012. The reasons for the new forecast were largely as before even though the circumstances of “The Great Recession” were unique in the life of the TV industry. Housing prices had turned around and household growth was resuming. Other consumer durables, particularly auto sales were returning to per-recession levels driven by pent up demand. My reasoning is that many purchases were postponed during the recession. An aging automobile can be repaired rather than replaced but only for so long before it becomes uneconomic. New TV sets are usually purchased to update rather than replace a broken one, so a TV replacement would be further down the consumer’s priority list; but the fact that consumers are back to replacing some durable goods at per-recession levels means that the time is not far off for TV.

Apple was on a roll during the recession and has accumulated over $100 Billion in cash, so not all was bleak for consumer electronics. Today we learn that Samsung has done stunningly well as well and the good news is extending back to the display makers. LGD is profitable again. The US election is days away, the “Fiscal Cliff” with mandatory massive budget cuts has to be faced and there is still the possibility of a default on European sovereign debt. However, things are not nearly as threatening as they were and some are looking forward to 2013 rather than just planning how to survive.

Thursday, October 25, 2012

An Apple TV and the Three Homonyms

TV is actually a homonym. It can mean content, the delivery, or the hardware. Historically, this is understandable as the corporate entities were all one in the same. The broadcasters created the content, were the delivery, and designed and sometimes made the hardware. The original color broadcast system was designed by CBS and was later replaced by one designed by RCA. RCA which was the progenitor of NBC and ABC. NBC was also, at times owned by GE, another former TV brand, and the three notes that accompany the NBC logo are the musical notes G-E-C for General Electric Corporation. CBS was previously owned by Westinghouse (inventor of the active matrix LCD), and ABC is currently owned by the content creator Disney. So the TV industry has always been heavily integrated from content creation to the consumer through delivery, to the box (or now the panel) sitting in the consumer’s home.

As I discuss in “The End of Broadcast TV”, this level of integration has had a stifling effect on TV innovation, delaying both the implementation of color then high definition by over a decade on each occasion. Now the hardware industry is embracing 3 more changes to format (3D, Cinema Wide, and 4K) and no one is seeking to ask the broadcasters’ permission for the new formats. With the decline in over-the-air (OTA) reception, the role of the “broadcasters” has contracted into content creation. Further, with the increasing diversity of content choices, the broadcasters creative input has increasingly gone from shows like “60 Minutes” to “Honey Bubu”. Having to fill a broadcast schedule has always driven less than stellar content. Game shows and reality shows are the successors to soap operas. Soap Operas got their name from the fact that most were sponsored by Proctor and Gamble, the household products giant; being the source of the money, advertisers shape TV as well as fund it. The gap between some network shows and what is available on YouTube can seem quite narrow. Further, with increasing presence of internet delivered content and video on demand, the role filled by this time filler content is under assault as well. You can watch TV shows on YouTube. Soon you will be watching more of YouTube shows on TV via shows like “Tosh.0”.

Newsweek recently announced that it is ceasing publication of a physical magazine and is migrating to an internet only existence. The decision was no-doubt, motivated by the increasing expense of printing and physical delivery of a physical product. I do not have data on the cost benefit of broadcasters actually broadcasting their content but I would imagine the combination of “must carry” guaranteeing them business with the cable and satellite companies and the value of their spectrum dwarfs the advertising revenue value of the 3% of sets connecting via OTA broadcast.

(The) Display
Display is another industry homonym. As a long-time member of the “display industry”, I think of “the display” as the physical device that creates the image the consumer sees: the Liquid Crystal Display, Plasma screen, or OLED. In the internet world display (not The Display) is pop-up or other advertising that is triggered by the consumer’s content selection. In some sense, all advertising is display as advertisers always try and place ads adjacent (either in time or physical juxtaposition) next to relevant content.

There are some significant current issues with display. TV content was initially an ad supported medium. With the advent of cable, TV offered a mix of ad supported and direct pay content. Internet content began with both ad supported and pay options. That diversity will continue and may be spreading as it is rumored that Amazon is contemplating and ad supported tablet; ad supported hardware. These are not the only two models. Disney has been quite masterful at doing both and further integrating content with advertising. Disney has a variety of businesses: content creation, broadcast (the ABC network), theme parks, and merchandising. ABC, of course, runs third party ads, but all of the Disney contribution is all some form of advertising. The Disney TV shows, independent of any explicit Disney advertising, promote the theme parks and merchandise. The merchandise promotes the movies and TV content. The theme parks promote everything Disney. I will refer to this as embedded display. The Apple stores are something of an embedded display if not a full-fledged theme park. These competing models imply differing control over the ecosystems behind them. Disney controls everything Disney. Disney also has considerable sway in the hardware world as well. It was Disney’s decision to back Blu-Ray over HD-DVD that spelled the end for HD-DVD. Apple maintains tight control as well. Direct pay content is whatever you have a mind to watch. Ad supported content is somewhere in between.

A second issue with display, by necessity, display has always been some combination of graphics and necessarily text. As the focus moves from desktop and notebook screens to smartphones, the ability to condense a meaningful message into a vastly smaller space for text is a substantial challenge for both the advertiser and content deliverers such as Facebook. The resolution of the human eye is limited and while stuffing ever-more pixels into a mobile display grants bragging rights, ever smaller text becomes unreadable. This is one reason why TV has such potential; the larger screen could accommodate existing pop-up ads and then some. Largely passed by by the social media trend and not capable of the finely tuned display ads of the internet. Mobile has grown in part because it enables things that TV doesn’t, or hasn’t.

The Third Homonym
The third homonym is LCD, a banking term for Large Complex Deals. It has been widely reported that the Apple TV set is being held up by negotiations with the content owners. This may be true but I think that most of the discussion about an Apple TV set is limited in its imagination. The Apple TV set is discussed as Apple’s way of moving into an existing, low or no profit business rather than an expansion of the market. One of the things that Apple did for the smartphone market was to make the phone more of a social platform. While Apple may be in discussion with the film-makers and cable TV companies, I expect that they are also having some discussions with Twitter and YouTube as well. They will embrace, not only the existing content, but play a role in enabling new content. These changes may be reflected in the hardware as well.

Prior to the conversion to broadcast HDTV conversion, the 16:10 format was original selected by the Standard Panels Working Group (SPWG) as the standard for notebook computers. This was done to accommodate Windows. After HDTV conversion, with the widespread promotion of “16:9” many notebooks switched to a 16:9 layout. However, per Steve Jobs preference, Apple remained with 16:10 to accommodate a control bar at the bottom of 16:9 content. During the recent presidential debate, some networks ran a Twitter feed below the image of the two candidates. I could imagine that this could become a permanent part of TV viewing with the set recognizing who of those you follow, is watching the same content at the same time and display their Twitter comments at the bottom… When your team wins the Super Bowl, nothing like stuffing it in everyone else’s face. So 16:9 could easily become 16:10. The other format changes could be incorporated as well, particularly Cinema Wide (23:9) resulting in a 23:10. As to the others, 3D and 4K, they might be “A Bridge Too Far” in what is going to be an otherwise expensive set.

When showing 16:9 content, such a set would have room on the side for two 4:3 panels (the standard definition format) showing whatever the user desired, maybe Facebook or Ebay. Indeed, as with the internet, the model for advertising could shift from time slots to screen positions as with display ads today. Further, I would expect that if an iPad is not explicitly the remote for the set, the remote will have its own 7” display showing additional printed content and/or enabling the user to rearrange the content on the main screen. Other factors in the new TV as with the smartphone, a general purpose processor (maybe even a GPU rather than a CPU) and improved inputs (camera and microphone). There will also be lots of new software features, mostly ported over from those that already exist on the iPhone, but the hardware itself is the easy part.

Delivery is more problematic. When the iPod was developed, it was still most common to buy music on CDs. The content owners had no interest in CD makers or record stores, so cutting them out of the distribution chain was a small matter. Apple, itself, was enjoined from distributing music on physical media per its agreement with Apple Records. Video content makers moved from removable media to electronic distribution a while ago. Though AT&T gained a lot by being the first, and for a time only, carrier with the iPhone the same incentives are not there for cable or satellite providers. Additionally, in the era where cell phones were given away to get the consumer to sign a long term contract, locking the device so that it only worked with the provider network did not seem intrusive. It is to be discovered if consumers will buy a TV that only works with a specific provider. Such experiments in the past have failed. The new services an Apple TV set could be provided over the internet, but that leaves the majority of the content still coming through the traditional providers and not integrated with the sets new features. Integration and making it easy for the consumer has been a trademark of all Apple products.

In the switch from broadcast to other forms of delivery, a new (or in some cases old) cast could either provide cooperation or competition. Disney was a make or break decider for the last removable media format and will play a substantial role. Cisco provides much of the hardware that runs the internet. New formats and protocols will be much easier with Cisco’s help. Apple has had Cisco’s help before. Cisco actually owned the iOS and iPhone trademarks before Apple wanted to produce the products attached to these names. However, Cisco is developing a substantial brand name of its own; it could easily introduce a competing product. Similarly, if the range of new products extends into home automation, GE remains a powerful brand name and is cooperating with Apple. Samsung and LG have large appliance businesses as well.

In addition to the agreements that must be forged with film makers, broadcasters and such, there is a new ecosystem in Interactive Digital Signage that must be dealt with as well. As I have related elsewhere, there is nothing that says that the digital signage screen area could not eventually rank with that of home TVs. The digital signage advertisers will be most of the same companies that advertise on TV and will no-doubt want a coordinated, experience for Digital Out Of Home (DOOH) and in-home. The world’s top brand, by estimated value, is Coca Cola. Coke is a player in shaping digital signage and ultimately advanced TV as well. Part of this shaping will include how digital signage interacts with mobile devices. Near Field Communications (NFC) was notably absent from the new iPhone 5. If it becomes a standard part of interactive digital signage, it will become part of TV. Digital signage is also brings a new cast of companies in content creation and content delivery. Although Cisco spans both, the other new players may be folded into the TV ecosystem as well.

In the era where the broadcasters controlled everything from content to display hardware, understanding the industry was simple. It was made even simpler by the fact that other platforms such as smartphones, tablets, and interactive digital signage did not exist, all of the major players were operating on the same business model and all broadcasts were made using the same technical standard. There was no OS issue to divide competing ecosystems.

The influence of the broadcasters is declining; the emergence of new platforms, and new players, is making TV is much much more complex. With small screen devices bumping into the limitations of small screens, TV, the new big screen beacons. Working out all of these competing interests is a Large Complex Deal. If Apple launches a TV set, I doubt if they will have everything nailed down in the first go-round. Further, Competing OS ecosystems will not be as slow to respond.

Saturday, October 13, 2012

The Rock, Paper, Scissors of Gadgets

There are three ways to make money on consumer hardware: you can charge more than it cost, you can attach a service and cover the hardware cost with service charges, or you can use the hardware as a vehicle to sell content or other products. There is nothing that says that you cannot do all three. However, in a competitive environment, the three different strategies tend to nullify each other. With cellular phones, the model had previously been to give the phone away at cost in order to get the consumer to sing a service contract. The problem with such a model is that when you are giving away the hardware, every component of the hardware is cost. Such platforms tend to not be a font of innovation as new or upgraded components means more costs. The incumbent hardware is highly vulnerable to new entrants that offer new capabilities and upgraded performance; the hardware rock breaks the cost cutting scissors of service subsidized hardware. The top cell phone makers during the free cell phone era are now struggling as the cost reduction race has tuned into an innovation race.

With hardware being rock and services being scissors, content becomes paper. The willingness of the content owners to support a hardware platform can make or break that platform. Disney’s decision to support Blu-Ray rather than HD-DVD spelled the end of HD-DVD. The video content owners’ reticence to sign an agreement with Apple seems to be a stumbling block for the much rumored Apple TV set. Paper covers rock.

The FCC with its “must carry” rules and the FTC with its antitrust enforcement makes it difficult for service providers to refuse content. So, scissors rarely cut paper, at least as far as content is concerned. However there are some examples and there may be more as the diversity of delivery mechanisms for content and product expand. As if it were a secret, Amazon made known that it is selling the Kindle at cost. The Kindle is clearly a sales vehicle for third party content and product. It has drawn a response from Walmart, which is ceasing to carry the Kindle. Indeed it would not be out of the question for Walmart to offer its own Tablet or to seek some linkage with a competing tablet maker.

Going forward, there are a variety of ways “rock, paper, scissors” could play out. As the OS owners, the managers of competing ecosystems, try and triangulate among products and services, a variety of either matching or blocking moves may occur. Microsoft is making closer ties with Barnes and Nobel. There is some speculation that tablets might get offered for free. This is ongoing in the smart phone and tablet markets. It would not be unreasonable to expect the battle to spill over into TV. Indeed, TV may be as big a prize as any.

Wednesday, October 10, 2012

Tech Top 20 Brands

Interbrands released their "Best Global Brands" report for 2012 ranking their estimation of the top 100 brand names in the world. Although there were certainly many distinguished brands that did not make the list, the list it serves as the starting point for a slimmed down Tech Top 20 Brands. There were 26 technology companies on the list. For the purposes of this blog I included only those that have in the past or might launch consumer products in the entertainment space or could directly impact that space. This removed three companies and the bottom 3 tech companies did not make the top 20.

On the List
Disney is on the list because, although they do not have a line of consumer electronics, they certainly could. Further, it was Disney's decision to back Blu Ray that spelled the end of HD-DVD. As a major content supplier, they have considerable sway over what happens in video. As a former PC maker, IBM is on the list as well even though they show no signs of wanting to get back into the consumer products business. Likewise, GE may not want to get back into consumer electronics but certainly could.

Movers and Shakers
At #20, Facebook was new to the top 100 list and I have no corresponding brand value for them for 2011. The average of the top 19 brands grew by 18%, largely driven by Apple. A few brands (Google, Samsung, and Amazon) grew at rates above the average and Panasonic was close at a 14% growth rate in its brand value. Most companies on the list were well below this and 7 lost brand value in absolute terms per the estimation of Interbrands.

Not on the List
There are, of course, and infinite number of companies not on the list. Coca cola was actually number one in in rand value. Although I do not expect a line of Coke, e-readers in the near future, as one of the largest advertisers, they could have considerable impact on digital signage communications and consequently on mobile devices.

Rank Brand Sector Brand Value($M) Value Change from 2011
1 Apple CE $76,568 129%
2 IBM Business Services $75,532 8%
3 Google Internet Services $69,726 26%
4 Microsoft Software $57,853 -2%
5 GE Diversified $43,682 2%
6 Intel Processors $39,385 12%
7 Samsung CE $32,893 40%
8 Disney Content $27,438 -5%
9 Cisco Business Services $27,197 7%
10 HP CE $26,087 -8%
11 Nokia CE $21,009 -16%
12 Amazon Retailer $18,625 46%
13 Canon Electronics $12,029 3%
14 eBay Retailer $10,947 12%
15 Sony CE $9,111 -8%
16 Philips CE $9,066 5%
17 Dell CE $7,591 -9%
18 Nintendo Games $7,082 -8%
19 Panasonic CE $5,765 14%
20 Facebook Internet Content $5,421 New

Tuesday, October 2, 2012

The Apple Camera

"Purple Haze was in my brain,
lately things don't seem the same,
actin' funny but I don't know why
'scuse me while I kiss the sky.:

Purple Haze Lyrics by Jimi Hendrix

In addition to the Map issue, the Apple 5 seems to have an issue with the camera. Specifically, it is generating a purple flare around bright objects. One of the features that was changed with the iPhone 5 camera was the addition of a sapphire lens. Sapphire is harder than glass but like most transparent things harder than glass, it also has a higher index of refraction. The higher index means that an uncoated lens will have higher surface reflections and higher scattering, particularly for blueish light. Even in the lens of your own eye, blue light tends to scatter more than red which is why many sun-glass brands switched from green to red or orange and why black and white photos tend to be clearer with a 25A red filter on the camera.

Apple may have had the lens coated and the coating gets worn off or was not properly done. The camera being digital, it should be possible to implement a software fix. The sapphire lens was probably implemented in response to a customer issue and is likely to to stay. The image above is a Hendrix album cover and obviously not taken with an iPhone 5 camera.

Saturday, September 29, 2012

The End of Broadcast TV

Broadcasters as an Impediment
Color TV was introduced to the public 61 years ago and was immediately withdrawn from the market. Though, nominally, the withdrawal was to conserve resources during the Korean war, in truth, it was a technology dispute between the broadcasters. The original CBS color scheme involved a monochrome CRT and a color wheel generating field sequential color. RCA, the owner of NBC, was developing a different color technology, the familiar shadow mask and spatial integrating color. The dispute delayed the implementation of color TV for over a decade and it was not until the mid-1960’s that the networks were all broadcasting in color in prime time.

Twenty-five years later, analog HDTV had been implemented in Japan and the US was planning to convert to HDTV as well. The conversion meant that all of the broadcast stations would have to upgrade their equipment for a questionable return on investment. The upgraded signal and consequent investment did not allow them to charge more for their air time. At the same time, some of the remaining US consumer electronics companies, not wanting to cede the rest of the market to Japan, proposed a digital HDTV format. The digital HDTV format was decided upon in large part because it delayed implementation of HDTV. To sweeten the deal for broadcasters, the US government decided on an implementation scheme that gave the broadcasters additional, valuable, spectrum.

Long before the implementation of HDTV, with the growth of cable, over the air broadcast ceased being important to consumers as a content source. However, the TV market being what it was, the “rabbit ears” connection on the back of the TV set remained until the transition to HDTV. In truth, the vast majority of consumers needed neither the rabbit ears connection nor the tuner; however it was kept on the platform to preserve incremental marketshare.

Value of Spectrum
In the early growth period for cellular phones, it was common for cell phone companies to buy local taxi-cab operations, not to get around town but for the spectrum they had for communicating with their cabs. Once the cellular networks were in place, the cab drivers could uses cell phones as easily as their old radios; but the purchase of cab companies showed just to buy their allocated spectrum proved a windfall for the previous owners.

As wireless communications have grown, radio spectrum has become more and more valuable. Now, it seems that the government has decided that the TV spectrum is too valuable to leave it in service of little used broadcast TV reception and has begun the process of buying out the broadcast stations. The stations do not actually own the spectrum, but as with all government transfers payments the status quo is something of a contract with those that benefit from the current policy and the government will not change the policy without buying out the incumbents.

Implications As with the transition to HDTV, when NTSC to HDTV converters were provided at a subsidized rate or free, no doubt consumers that are dependent on broadcast will get some help from the government. Possibly, in addition to subsidizing cable or satellite access, it might also subsidize internet access thereby preserving access to free news and other content. The major networks and broadcaster might suffer some decline in viewership as their captive audience goes away. However, their profit from the sale of their spectrum should be more than their loss.

For the CE market, a major encumbrance is removed for TV set innovation. The current HDTV format was designed in large part to accommodate broadcast TV. The removal of broadcasters from the picture will enable some experimentation in formats. Actually, Vizio is already doing this with its Cinema-Wide product. As with 3D, even further control of TV formatting might fall to the movie industry once the broadcasters are gone. Better sound might also rise from an option to standard. And… as there is no longer an access advantage to the broadcasters, more diverse sources of local content will develop. As cable made possible new networks without the investment in a broadcast and local infrastructure, the departure of broadcast TV might enable a blossoming of the blogosphere into video content. Finally, the additional spectrum that is made available might be further enabling to new services and to ubiquitous digital signage.

Broadcast TV, with its large distributed infrastructure, has been a traditional impediment to TV innovation. As broadcast goes away, a round of innovation both in hardware and content is certainly in the offing. Advancements in mobile electronics, and the additional spectrum freed up will advance this as well. As with any change of this type, it can’t come soon enough but will likely take much longer than it should as it has to handle the objections of those dependent on the current infrastructure. It would be nice if it was decided that this is inevitable so let’s just do it. However, as with HDTV, the change will likely take 10 years.

Monday, September 24, 2012

CE 2012

Thousand, tens of thousands of people line up a day in advance to pay up to $400 for a device most plan to dispose of within 3 years. The device is sold with pretty healthy margins and is rapidly sold out. Meanwhile TV sales, a device most will be using for the next 14 years and is sold with virtually no margins, TV sales are at best flat as well as TV pricing. In spite of the weak economy, there is plenty of excitement in consumer electronics but it seems to be concentrated on a couple of products and one company. Indeed there is some speculation that Apple might become a monopoly. I see little danger of that. This posting contains some of my views on what is happening and what is likely to happen in Consumer Electronics (CE). I first give an assessment of where the industry stands then likely (or in some cases already implemented) reactions

To be sure, Apple has a great deal of consumer mindshare. This exist because of great marketing and a wide product line where success on one consumer platform reinforces success on others. However wide participation across the industry is not necessary for success. An example is Google's recent decision to sell its Set Top Box (STB) which came with its purchase of Motorola Mobility; the group was not necessary for Google's plans. Another part of Apple's success has been masterful management of the CE ecosystem, including the parts where they are a buyer rather than a seller.

For this analysis, I break the CE ecosystem into 5 parts: Components, Composite Devices, Operating Systems (OS), Content & Services, and Consumer outlet. Although Apple, as a device maker seems to have the upper hand currently, others in the ecosystem are multi-billion dollar companies as well and have ways to respond.

Components As I have noted in other postings, information operations can be classed in 5 functions: Display (which also includes other human interfaces such as printers or speakers), Memory, Communications, Processors, Sensors. Many of these functions had been common stand alone devices such as Cameras (sensor), simple cell phones (communications) and tape recorders (storage). However, although these devices are still available, mostly people buy the function as part of a composite device such as a smartphone. I will comment on 4 of the 5.

Display: In the diagram, TV is not listed as a separate platform. Although there are current efforts to change this, it has largely become a peripheral, a display, for the Set Top Box or other content outlet. There has been wide speculation about Apple launching an Apple branded TV set. I have previously posted that I think that this would actually be good for the industry as Apple will certainly spark a round of innovation and would certainly attempt to lead prices up. But absent content agreements an Apple TV is unlikely unless it can be sold as a requisite attachment to some other device.

Storage & Communications: Providing free cloud store with their devices puts device makers in the role of selling storage. Unlike most smartphones, the iPhone does not have removable flash memory. By selling iPhones with differing on-board flash capacities, Apple effectively garners for itself the flash attachment sale. Removable storage, such as flash, can be thought of as a form of communications as well; the flash chip can be moved from one device to another, transporting the information on it as well. The absence of removable storage limits the user's communications options. The change in connector to a proprietary design further puts Apple in the business of managing and selling communications for its devices.

Sensor: Cameras still exist as a separate CE category, but there has been steady improvement in cell phone cameras both in terms of resolution and functionality. Cell phone cameras will never be able to take massive lens attachments, but short of that, the ubiquity of cell phone cameras is putting an end to the "point and shoot" segment of the camera market.

Composite Devices
The incorporation of various component functions into composite devices such as the smart phone means that the smartphone is effectively gobbling up the markets of those components as independent devices... except for the TV/Display, where the all-important content selection function was taken over years ago. TVs still have tuners, but few actually use them. Another basic trend in composite devices is compactness. The smaller something is the more difficult the engineering and the fewer companies can compete. CE leaders therefore; therefore promote thinner and thinner devices.

Operating Systems
Operating Systems (OS) are way to manage the ecosystem. Among Google's first moves in CE were development of its own OS. HP developed its own OS; but it seems to have gone by the way with their absence from the tablet and smartphone market. With the time and difficulty of enticing a developer community, of all of the parts of the CE ecosystem, a vibrant OS is the most difficult to replicate.

Content & Services As I noted above, removable storage is as much a form of communications as it is storage. That being the case, with the proliferation of high speed internet connections and the decline in hard drive and flash storage costs, the optical disc market is going away as it the content industry's distribution chain for physical media. However, having seen what happened to music industry pricing and revenue with their internet distribution agreements, the video industry is in no rush to sign up for the same thing.

Consumer Outlet
A man walks into a Walmart and asks to buy a Kindle. The sales associate behind the counter says, "But we don't sell Kindles." The man asks, "You are one of the nation's largest CE retailers, the Kindle is an extremely popular CE product?" The sales associate answers, "Yes...." There is no punch-line. The fact is Walmart is discontinuing its sales of Kindles the device isn’t just a tablet, it is a competing retail outlet that can solicit and take orders. Although, even in the most tumultuous relationships, big companies rarely refuse to do business with each other; Apple still buys from Samsung, the differing interests among the major players is causing some rifts in what is normally a short-term maximize revenue industry. The conflict is not just between Walmart and Amazon, but Google as well. Apple has its well known tiff with Samsung but also looks to avoid doing business with Google, hence Apple trying to replicate Google Maps. Finally, all of the hardware makers have some issue with those that are primarily not hardware makers, as the non-hardware makers would like the hardware to be free in order to more easily sell content.

Much of what has been going on with composite devices have been facilitated by what is going on with display technology, packing ever-more pixels into the same size screen. That is coming to an end, not because the technology has reached its limits but because the human eye cannot see ever more concentrated pixel densities. As with the other components, displays will continue to improve, but not to the point where they are driving the platforms, not without a fundamental technology change. Flexible displays may be that change and I discuss more on that below.

Fundamentally, the component makers have two principal interests. The first is to reassert themselves either as independent products or as composite devices. The TV industry formed the Smart TV Alliance in order to facilitate an app developer community writing apps for smart TVs. Nikon has developed a camera with on-board wireless communications, turning the tables on the existing composite devices by adopting some of their function. Coupled with its Droid operating system, a Skype app and a Blue Tooth headset and contrary to what I said above, you start to approach a cell phone with interchangeable lenses. Add advanced voice or esture command features and it could be computing device as well.

The component makers have a secondary interest in balancing out the power of the OS at least as far as that OS exists as a sales channel. That means supporting the Brick and Mortar retailers.

Composite Devices
As discussed above, the TV makers would like to make the TV a composite device. The number of participants in other composite devices market will expand as well. Given the extent to which tablet sales are eating into sales of the incumbent notebook, existing notebook and notebook processor companies desire to add these devices to their lineup. HP has a desire to re-enter both the smartphone and tablet markets. Barnes and Noble has the Nook, Amazon has the Kindle to increase their consumer reach and facilitate content sales, not to make money on tablets. A tablet from Walmart would not be a surprise. Indeed, making money on tablets may be quite difficult with more proprietary tablets from those wanting only to expand consumer access.

In addition to new participants in the existing platforms, there might be new platforms again driven by advances in display technology: a new form factor for the tablet enabled by a roll-up display or a smart watch. Again, advanced voice command or gesture recognition can facilitate these new platforms as well as wireless recharging. For human factors reason, I do not expect a near-to-eye device (glasses with built in video screens) as such devices have been launched in the past and gotten a ho-hum reception from the market.

Although information can be shared across platforms, the composite devices really are not that tightly linked. Nintendo recently introduced the TVii which changes that. In some ways it is the game console reasserting its central position and the TV as a peripheral. However, it is also bringing new functions to the TV and fundamentally expanding the usage model. The name TVii bares some resemblance to the much rumored itv and it may be Nintendo beating Apple to the punch.

Operating Systems
Just one comment about operating systems, Microsoft has been sitting in the anti-trust penalty box and has not been much of a factor as the smartphone and tablet markets have developed. Their time in the box is up and given the current valuation of Apple, they won't be seen as the behemouth; so I expect them to be much ore aggressive.

Content & Services
Since the advent of the VCR and cable, the direction has mainly been in the direction of user purchased content rather than ad supported. In addition to Amazon's rumored ad supported tablet, ad supported content is in resurgence. Possibly this is due to the weak economy but this would tend to favor Google and the Droid world. This is especially true given the video content owners reticence about following the path of the music content owners.

Consumer Outlet
As stated above, I expect the Brick and Mortar retailers to get added support from the hardware makers that actually intend to make money on hardware. I also expect that both the B&Ms and the online retailers to expand their offerings of proprietary tablets. In addition both the B&Ms and online retailers might expand their services, buying used product in order to facilitate the sale of newer versions. Increasing supply constraints on rare earths used in electronics may drive this as well.

Digital Signage
Finally, a mention of digital signage and digital out of home.... As digital signage becomes more ubiquitous, how these mobile devices interact with the signage will become a factor in their utility. Apple chose not to include Near Field Communications (NFC) on the iPhone 5. This was, perhaps, compelled by the Apple business model. However, for the Droid world, NFC may be a critical part of their future allowing consumers to opt-in for advertising regardless of device maker.

The above, though an incomplete assessment of the market, highlights that there are numerous opportunities for innovation in the CE world. Although Apple rides high, their position is not as secure as it seems. If their competition or other adversaries quit focusing on copying Apple and instead focus on the consumer and giving them something that Apple doesn't... that is stylish and easy to use, then there is a world of possibilities. Indeed, with the advancement of flexible displays, there is an inevitability of change.

Wednesday, September 19, 2012

What determines TV Sizes

LCDs are made, several at a time on larger sheets of glass (called a mother-glass) and “cookie cut” into smaller displays. Determining how many LCDs to cut from a mother-glass is a balance of pricing and geometry. In general, larger displays sell for more per square inch than smaller displays, so there is an incentive to make as few cuts as possible. However with current quality requirements, the bigger the display, the lower the yield, as it is more likely to contain a visual defect. Further, for whatever size is chosen, the manufacturer must have orders for that size. In general, sizes are chosen so that at least 6 individual displays (cuts) come from each mother-glass but usually less than 25. An LCD maker with a yield issue may choose to do more.

There are a number of geometric considerations as well. Of course the size of the manufacturer’s equipment is a starting point, the length and width of the mother-glass it was designed to take. LCD fabrication equipment (fabs) comes in generations or gens. Early on, the gen of a fab did describe when it was made. However as the size of LCDs diversified with the types of products using flat panels, gen has taken on a meaning more related to the size of the equipment than when it was produced. An LCD maker may install a Gen 6 fab to make monitors and the fab may be newer than their Gen 8 fab making TVs. Within a Gen, sizes may vary somewhat; a slightly large Gen 6 fab may be termed a Gen 6.5. As with all manufacturing equipment, products change, screen sizes change, and a fab will eventually be making a different product in a different size from what it was originally designed for.

Aspect ratio is another consideration. TVs are generally 16:9. Notebooks may be 16:9 or 16:10. Cell phones and monitors can have substantial variances from square to 21:9. In addition to the display itself, a small border area is needed to cut the mother-glass into individual displays. The size of this border depends on the manufacturer. Finally, LCDs are usually made with all the displays on one mother-glass being the same type. The arrangement of these displays on the mother-glass is termed the lay-up. The layup does not necessarily use every square inch of glass, in fact usually not. However, makers like to maximize glass utilization from the standpoint of getting the most out of their equipment and maximizing the number of cuts.

Sometimes very small differences in equipment or display size can mean the difference between getting an extra cut or two. For instance, when the Standard Panels Working Group (SPWG) settled on a business notebook size of 16:10, 14.1” diagonal vs. the competing 15:9 14.0”, two sizes that cannot be differentiated except by actually measuring them, there were substantial manufacturing implications. While all of the fabs that could make a 14.1” could make the 14.0” as well, two of the fabs that could make a 14.0” could not make the 14.1” without making it with fewer cuts. This meant that those fabs were uneconomic at that size. The 14.1” size was chosen to be consistent with previous aspect ratios and with the long term planning for Windows regarding screen content.

So, very small differences in equipment size may cause an LCD maker to choose one particular screen size vs. another. This is why TVs are often termed 42” (or some other size) class vs having every maker make a screen that is precisely 42”. Sometimes when it seems that the industry has settled on a standard size such as 40”, an individual LCD maker will determine that he can get the same number of cuts and consequently virtually identical costs, on a 42” or larger screen size and start offering that size. Even when the industry seems to standardize on sizes (32”, 40”, 55”) other sizes will proliferate. For a particular sized fab originally designed to make 12 cuts from a mother-glass, only certain sizes of larger screens will fit well on that equipment. In this example, trying to make a slightly larger screen may mean going from 6 cuts to 3.

Recently there was a story of some TV brands selling smaller than advertised TVs. The article tended to blame the retailers for the problem. However, large retailers sell multiple brands and multiple models; they cannot inspect every TV model to ensure that it is in compliance. Most Retailers actually do keep tape measures behind their TV counters; however this is mostly to ensure that the TV physically fits where the consumer is intending to place it. Short of actually measuring the screen diagonal yourself, the best guarantee that you are getting the screen size advertised is to buy a trusted name brand.