Home theater dominates CES 2005

More than 2,400 companies showcased their products and technologies at CES 2005, where affordable HDTV is the main attraction.

For most of the 1990s, Comdex held the title of the nation’s largest trade show. Now, driven by an explosion of interest in home entertainment technology, the spotlight has shifted to the Consumer Electronics Show (CES).

New era
CES now showcases the wares of a $124 billion-a-year industry in a display space equivalent to 11 New York City blocks. Beyond the countless new products presented by more than 2400 companies at the Las Vegas Convention Center, the show has now evolved into a hotbed for debate over regulatory policy governing the entertainment outlets that reach American homes.

The CES' Washington-based sponsor, the Consumer Electronics Association (CEA), is so powerful a lobby that 150 members of Congress and government regulatory officials, including the FCC Chairman, Michael K. Powell, were expected to attend the event.

At the show, major consumer brands Sony, Panasonic, Thomson RCA and LG Electronics, among others, unveiled scores of new televisions, music players and related accessories, joined by makers of everything from computers to satellite radios seeking a piece of the huge U.S. market.

The CEA is estimating 2004 revenue grew 11 percent to approximately $113.5 billion in 2004 and will grow 11 percent in 2005, to $125.7 billion. It will mark the first time in 10 years of consecutive, year-on-year double-digit growth.

Consumer-driven products
Optimism is running so high that non-traditional manufacturers are lining up to compete for a chance to sell their products into the home theater market. For example, Hewlett-Packard, known for PCs, printers and calculators, introduced 17 new television sets and TV projectors at the show.

Much of this enthusiasm is due to recent consumer response to flat screen television sets as prices have fallen. More of the same is expected. Executives of TTE, the Sino-French electronics marketing venture, told a press conference in Las Vegas that they are prepared to compete aggressively on price.

Thomson-TCL said it would push high-definition sets in the traditional, CRT format below $1099 this year, while it will offer a range of slim-and-light digital light projection (DLP) sets for less than $2000.

Other electronics makers said they are focused instead on creating bigger, sharper screens and clever ways of routing video and music from room to room in the home, or to allow consumers to run their media in cars, handhelds or on phones.

Samsung demonstrated super-sized 102in and 80in plasma screens and a 57in liquid crystal display at CES.

A Samsung official noted the unexpected success of one expensive DLP model, which the company introduced for a price of $4000 — twice what rival plasma or liquid-crystal TV screens cost. The company sold 130,000 DLP TVs in the United States last year.

David Steel, Samsung’s head of marketing for digital media products, based in Seoul, told Reuters that there is greater demand, even at the higher prices. He said they’ve thrown out all assumptions about what consumers are willing to pay for a HDTV set.

LCDs vs. plasma screens
Some companies, like Panasonic, favor flat-screen plasma screens, while others like Sony have put their weight behind LCDs. Panasonic plans to double its plasma production capacity to 300,000 units a month by March 2006, while Sony said it would have no fewer than 14 new LCD televisions this year.

Forrester Research analyst Ted Schadler told Reuters an online poll that his market research firm conducted in August, but has not yet released, shows that 50 percent of U.S. consumers are looking to buy a large-size, flat-panel model for their next TV.

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