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Analyst Assessment of CES 2006

The huge 2006 CES show closed yesterday. The exhibitor catalogue compared in size to the New York telephone directory. ABI Research sent four seasoned analysts, specializing in digital home entertainment and media, broadband, automotive systems and telematics, to this "greatest show on earth". Here are some of their comments.

Automotive
A host of new navigation devices were introduced from nearly every automotive infotainment hardware provider in the industry, including Tier Ones. Unfortunately the majority of these devices were "me too" exercises that got lost in a sea of homogeny. "Differentiation will be the key going forward," said Frank Viquez, Director of Research, Transportion. "High-priced devices are at a major disadvantage unless they offer some sort of truly special functionality or unique user experience."

Broadband video
The idea of the set-top box as video content "mothership" (outlined in a recent ABI Insight) received further validation as both Motorola and DirecTV announced initiatives to send content from the digital STB to mobile devices. DirecTV announced its own portable video player, then went a step further by offering episodes of selected shows for $2.99 per download two days prior to broadcast.

"The flurry of downloadable video announcements shows how Hollywood's mindset has changed over the last year," said Michael Wolf, Principal Analyst, Broadband, Digital Home and Media. "These deals, allowing premium video content to be sold online and pushed to a multitude of devices, were impossible a year ago, but now Hollywood sees the need to pursue them or be left behind." Most of the agreements are "vapor" now, he says, but by this time next year the business models will be in place and nearly all top-tier content, particularly TV content, will be available to consumers through the Internet.

Home Networking
Technology companies and content owners continue to embrace home networking. Yahoo's "Go TV" allows consumers to view photos and video, and listen to music on their TVs. Yahoo will provide a downloadable application and will rely on the home network for distribution. Also of interest is the first announcement of a box with a MoCA chipset. Motorola's FIOS set top boxes will include MoCA, which allows for IP networking over coax, for multi-room DVR capabilities.

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