Macworld, CES Foreshadow an Exciting 2004

Like 2003, 2004 began with two trend-setting trade shows: Macworld San Francisco 2004 and the 2004 International Consumer Electronics Show (CES), which took place in Las Vegas, Nevada. Both shows are heavily tilted toward the merger of personal computing and consumer electronics--a hot trend that's now sweeping the computer industry. CES also features a strong contingent of traditional consumer-electronics companies plying such high-tech toys as home-theater systems and High-Definition Television (HDTV) displays. As in previous years, both shows offered a fascinating preview of the consumer-oriented technology advances we'll see in the coming year.

Apple Computer CEO Steve Jobs is a master showman, capable of rallying his company's loyal fans into a tizzy over the company's products. Sadly, Macworld 2004 showcased one of Jobs's least compelling moments on stage, mostly because Apple has so few new products. But the company is pushing further from its computer roots into digital music--a move that will resonate for months to come.
But first, Jobs celebrated the 20th anniversary of the Macintosh, the computer that took GUIs and the mouse mainstream. "Literally, \[the Mac was\] a decade ahead of anything else," Jobs noted. "It was the computer for the rest of us." He didn't announce any new or updated Mac systems, however, choosing to instead focus on innovative new software that distances the Mac from its PC competition. First up was a new version of the company's midlevel Digital Video (DV) editing package, Final Cut Express 2.0 ($300, or $100 for the upgrade version), which includes real-time filters and effects--two features that typically bog down the free iMovie tool. Microsoft even showed off its Mac Office 2004 suite, due later this year, which will include Mac-only and Mac-first features such as a Project Center for centrally tracking different types of information and a OneNote-like note-taking and audio recording add-on for Microsoft Word.
Apple updated its iLife suite of digital-media applications with new versions of iPhoto, iMovie, and iDVD (iTunes remains unchanged), and a new music-making application called GarageBand. Priced at just $50, iLife is a must-have package, offering better performance, better stability, and a slew of new features, such as network-based photo sharing, photo ratings, and numerous new video effects and transitions. "It's like Microsoft Office for the rest of your life," Jobs said, "for when you're not a work."
The big news at Macworld was the new iPod mini, due in February in the United States and in April elsewhere. Essentially a scaled-down version of the world's most popular portable digital audio player, the iPod mini features Mac and PC compatibility, a choice of five colors, a 4GB hard disk--good for storing 1000 songs (which I take to mean 128Kbps Protected AAC songs)--and a disappointingly high price of $250.

CES is typically split evenly between traditional consumer-electronics companies and PC companies. CES 2004 got off to a strange start when computing giant HP announced a blockbuster deal with Apple, in which HP will sell rebranded iPods and bundle Apple's free iTunes for Windows software with all its consumer-oriented PCs. The HP deal raises some serious interoperability concerns, because none of its many existing hardware products are currently compatible with the proprietary Protected AAC format that Apple uses on its iTunes Music Store. HP also abandoned the more compatible Microsoft Windows Media Audio (WMA) format used by competitors such as Dell, MusicMatch, Napster, Wal-Mart, and, leading me to wonder how the company will keep its customers from sinking into a quagmire of incompatibilities. But you can't deny that the HP/Apple deal is a lightning strike of publicity for HP and a huge endorsement for Apple's digital media strategy.
HP wasn't the only PC company bucking the Microsoft boat. Streaming media technology company RealNetworks announced at CES that it, too, was abandoning WMA for its own online music store, and although the company chose an AAC-based audio format, the format is completely incompatible with Apple's Protected AAC. The announcement raised eyebrows and cast another shadow over any hopes that the format wars would soon be over.
In his preshow keynote address, Microsoft Chairman and Chief Software Architect Bill Gates touted his company's recently released MSN 9 Internet software, which includes a Premium version suited to broadband users; the new Smart Personal Object Technology (SPOT) smart watches; Windows Powered Smart Phones; and a host of Windows Media-based products and services, including Windows Media Center Extender devices, which remotely display content from Media Center PCs on any TV in your home through a network connection. Microsoft's vision was called "Seamless Computing," an apt description for the ways the company sees technology expanding into every area of our lives. "We're making it so you don't have to do a lot of work to get your calendar to show up on the different devices, making it so that your email is wherever you go," Gates said. "We are developing software that's in the car, in the phone, of course in the PC, the set-top box, the watch--all the places where software can run. We want to make sure that we do the best we can to make \[them\] connect and to make it seamless."
But CES wasn't just about Microsoft. In fact, Microsoft didn't even have a particularly big presence at the show, compared with some companies. No, you could sum up this year's CES with the term "connectivity." We're at the beginning of a new age in consumer electronics, an age in which devices work together over home networks. Many companies are offering set-top boxes, for example, that connect to powerful PCs in the home office, displaying the digital photos, movies, and music you've stored there through your home stereo or home theater. Other devices remotely access content from powerful set-top boxes, such as the TV, letting you enjoy recorded TV content in other rooms. In both of these cases, the idea is that you can enjoy your media at any time, in any room. Maybe Microsoft's "seamless computing" concept isn't so far off after all.
Some of the companies at CES were showing off interesting and innovative products. HDTV satellite provider VOOM, for example, recently dramatically reduced the cost of its exciting, high-quality service and is introducing in 2004 a set of secondary set-top boxes that let you view HDTV programming (recorded or live) on other TVs around the home. A company called Beatsounds is offering tiny MP3 players that you can wear as decorative necklaces; the devices are so small you could almost wear them as earrings, and yet they offer 128MB to 256MB of storage. Texas Instruments, Samsung, Mitsubishi, Toshiba, and others are offering a wide range of wide-screen TV displays at a variety of price-points. Tube sets still dominate the low end, but rear-projection sets are coming on strong in the low-to-midpriced range. DLP displays are making headway in the midrange, and high-priced LCD and plasma displays, with their flat form factors and brilliant screens, are selling better than ever at the high end.
Sony's off-floor booth was characteristically impressive. The company was touting everything from PC-convergence devices with integrated DV recording capabilities to Network Walkman portable audio players, disk-based personal DV recorders, digital cameras, and smart phones through its partnership with Erickson.
CES was so big that I'm having trouble wrapping my mind around it. We saw traditional computer equipment, quarter-sized hard disks, customizable bezels for wide-screen TVs, iPod accessories, car stereos and car modifications, and photo-printing paper. We saw booth babes, bikini models, walking and talking robots, and vendors that sold different flavors of oxygen to confused attendees. Temporary booths were even set up in tents in the parking lot to handle the companies that couldn't get space inside the enormous Las Vegas Convention Center. CES was just that kind of show.

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