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					CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief       2010




                     CES 2010 – Las Vegas

                         Debrief


                               12 January 2010




                  Main Trends and Observations
                         as Identified by
                         Derek Kerton
                         Principal Analyst
                                        1                    Copyright The Kerton Group
CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief                                                                                          2010


      Contents
      Introduction .................................................................................................................................................. 3
      Attendance, General Mood .......................................................................................................................... 5
      CES: The iPhone Show Again......................................................................................................................... 6
      Coolest iPhone App: Parrot G Drone ............................................................................................................ 9
      e-Readers .................................................................................................................................................... 10
      Efficient Displays ......................................................................................................................................... 12
      Netbooks ..................................................................................................................................................... 13
      Slate Computers .......................................................................................................................................... 14
      TV App Platforms ........................................................................................................................................ 15
      TV Digital Media Adapters .......................................................................................................................... 16
      PlayOn Software Solution ........................................................................................................................... 17
      3-D TV.......................................................................................................................................................... 18
      3-D Gaming ................................................................................................................................................. 19
      3-D…Well, Just More 3-D ............................................................................................................................ 20
      OK…Looking For a Volunteer? .................................................................................................................... 21
      Nexus One and Android .............................................................................................................................. 22
      Light Blue Optics ......................................................................................................................................... 23
      Wireless Charging Mats .............................................................................................................................. 24
      Palm ............................................................................................................................................................ 25
      Intel Had A Good CES .................................................................................................................................. 26
      Lenovo ......................................................................................................................................................... 27
      Motorola ..................................................................................................................................................... 28
      Pico Projectors ............................................................................................................................................ 29
      Femtocells ................................................................................................................................................... 30
      Videoconferencing from the TV .................................................................................................................. 31
      Mobile TV .................................................................................................................................................... 32
      Clear Overdrive ........................................................................................................................................... 34
      USB 3.0 ........................................................................................................................................................ 35
      Samsung Dominates Press for a day ........................................................................................................... 36
      Ford Sync ..................................................................................................................................................... 37
      Synaptics’ Touch Demo ............................................................................................................................... 38
      Home Control .............................................................................................................................................. 39
      Zomm Phone Reminder/Theft Alarm Device .............................................................................................. 40
      In-Vehicle Cameras / Black Boxes ............................................................................................................... 41
      Other ........................................................................................................................................................... 42




                                                                                      2                                                  Copyright The Kerton Group
CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief                2010

      Introduction
      On January 12, 2010, the Telecom Council of Silicon Valley held a debrief
      meeting regarding the recent CES Show in Las Vegas.
      About 60 telecom executive attendees participated in
      these three debrief session which I moderated for the
      Council, a portion of whom had attended the show.

      My observations from the show, below, are not a complete, edited research
      report, but are some interesting take-aways of relevance to Telecom and
      general technology enthusiasts. I have included some brief analysis and
      implications.

      Since we started in 2007, the Council’s debrief meetings were never intended
      to be one person’s presentation. We believe that major trade shows are too big
      for a single person to successfully capture. We’ve learned that the best way to
      get the shows’ highlights was to bump into people we know, on-site, and ask
      them “What have you seen so far” – it is social networking 1.0 (flesh version),
      with a recommendation engine. When you think about it, this is something we
      all do naturally, and it improves our show experience. The Council debrief
      sessions are built around that natural concept, and we expand it to include the
      discussions at the debrief itself.

      Under that belief, each attendee shares their most important take-aways, and
      the trends they observed in a moderated discussion. As a result of this broad
      net, it is unlikely that some important trend shall elude our group.

      The Council does not capture and distribute these proceedings (in audio or
      video), because they want to ensure frank discussion on site. So, the main
      value is reserved for those who attend – be sure to come next time! I have,
      however, taken some anonymized notes of the group’s contributions, and
      added and identified them throughout this document.

      Indirectly recognizing the value of the Council’s process, Fierce Telecom’s Dan
      O’Shea said in January newsletter (with regards to their CES show debrief),

               “I can't imagine even a couple more days would have allowed
               me to see everything. If ever there was a show built for social
               networking dynamics, it is CES. It is certainly massive and tries
               to be all things to all people, but it was apparent last week that
               your best bet to navigate the event was to find people with
               like-minded interests and talk to them about what they had
                                             3                        Copyright The Kerton Group
CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief               2010

               seen and still wanted to see. And it was easier than you would
               think to identify your own niche community among the throngs.
               I don't think I have ever been at a trade show before last week
               where the simple questions "Have you seen anything
               interesting?" or "What's the big news at the show?" didn't come
               off as polite but empty-headed conversation. At CES, those
               questions were asked with genuine interest, and in most cases,
               they were met with genuinely-interested answers.”

      Naturally, we disagree with him that this process is exclusively useful at CES,
      but he seems to be on board with the fact that social ranking is critical to
      catching the best and brightest. So let’s do it.

                                                      Kohjinsha DZ Series

                                                      (a Japanese Mfg)

                                                      2 x 10.1” screen

                                                      Screen innovations were a big
                                                      part of CES: from 3-D TV to
                                                      new configurations, e-ink
                                                      readers, touch screens, dual
                                                      screens, and more.




                                            4                        Copyright The Kerton Group
CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief                                     2010




      Attendance, General Mood
      Attendance was projected at 120k, similar to last year, but not up to the peak of 140k from 2008.

      Whatever the official stats, the show was busy and crowded. It seemed more crowded than last year, so
      perhaps the 120k people stayed in Vegas for longer stretches this year, now that the economic
      confidence levels are much higher.

      However you look at it, taxi lines were long, bus lines were long, restaurant space was hard come by.
      The mood was all business, and while the excesses of two years ago are still missing, the confidence
      seems to have returned.

      Comments from the three live debrief sessions:

              Last year the show included the large Sands Expo center. This year it included the Venetian.
              Adult Video awards normally share LVCC space with CES, but moved to another location.




                                                         5                                Copyright The Kerton Group
CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief                                       2010

      CES: The iPhone Show Again
      This year, like last year, they might as well rename CES the “iPhone and iPhone Accessories Show”. From
      Automotive, to mobile Apps, to home control, to RC Toy control, to Home Sound and Stereo, to portable
      Boom Boxes, to accessories, the iPhone was everywhere – even if Apple was not. It was in every booth’s
                                                            demo, and integrated into hundreds of CE
                                                            equipment, both from a software and a
                                                            hardware/docking perspective.

                                                           I was thinking that the iPhone’s free ride might
                                                           end, with the plethora of Android devices that
                                                           displace the Cupertino-phone, such as the Droid or
                                                           Nexus. But the reality is a ‘plethora’ is not what CE
                                                           manufacturers want. They want a single device and
                                                           form factor that they can integrate into their
      products, and nothing is set to replace the iPhone. That notion actually brings me to an interesting
      observation:

      While the telecom news tends to discuss iPhone versus its competitors in terms of units shipped per
      quarter, we seldom compare the installed bases. But notice that “iPhone killer” handsets have come and
      gone via a revolving door, with none remaining the main contender for long: the N95, N96, N97, N97
      Mini, E71, N900, the Samsung Instinct, the Omnia, SE Experia X1, X2, the Palm Pre, Pixi, the Blackberry
      Storm, the Storm 2, the Bold, the HTC Touch Pro 2, Droid, Eris, the Nexus, etc, etc. Each of these iPhone
      killers has failed to kill, but more importantly, is part of a fragmented allied assault on Apple, while the
      iPhone does the Energizer Bunny routine and just keeps going and going with no architecture or
      Industrial Design changes. And as time goes by, the installed base of the iPhone continues to grow.

      Beyond device wars, we also tend to talk about the “mobile OS” wars, and in that regard, we discuss
      iPhone v. Android, or WinMo, Symbian, etc. And in that competition, once again, Apple looks less
      significant than the popular Symbian or the segment-winner BlackberryOS. But the other OS tallies, too,
      are comprised of many phone models. The net result is that no single form factor of Android actually
      comes close to iPhone’s sales. The “OS” centric way of looking at the market makes iPhone look
      relatively weak, but it’s ONE PHONE that’s holding battle with a bunch of competitors.




                                                           6                                Copyright The Kerton Group
CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief                                      2010

                                                    Source: Gartner Worldwide Smartphone Sales, 4Q08 (000s)

      Or look at these similar 2009 stats from Canalys:
      http://www.mobilemonday.net/news/smartphone-shipments-keep-climbing

      The next chart, from Kotaku shows the iPhone’s installed base versus other gaming platforms, and then
      they explain why game developers are becoming interested in the platform versus other mobile gaming
      devices.




                                                                                            Source: Kotaku.com

      So, if you are a game developer choosing which OS to target, that is one decision. You will seek the OS
      that fits you best. But if you are a CE manufacturer, with longer lead times, physical design and molding
      requirements, longer life-cycle products, and higher CapEx, which product will you target for
      compatibility? The one with plastics, ports, and interface that change infrequently, and has sold the
      most volume.

      It’s time to start talking less about sales, and more about installed base. In Apple’s 3Q09 Investor Call,
      COO Tim Cook said the iPhone/Touch devices have reached over 45M sales worldwide. What other
      single device has that kind of incredible foundation? Nokias N line? Nope, it’s split among the N95, N96,
      N97, and now…the new N97 mini.




                                                          7                                Copyright The Kerton Group
CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief                                      2010




      The iPhone’s USA installed base exceeds that of the Windows Mobile OS, which was big news when it
      broke in fall 2009, but figure that iPhone is doing that with a single form factor, while WinMo gets its
      total from a basket of different phones. The variety may be good for appealing to different market
      segments, but it has absolutely no appeal to the CE makers at CES, who have designed everything they
      can around iPhone. CES is about consumer electronics…hard goods. These people are in love with
      iPhone, and the affair is set to last.

      Comments from the three live debrief sessions:

              A carrier noted that their iPhone accessory sales in-store are $60 on average.
              Enterprise Ireland noted that Apple store’s accessories are largely made by an Irish white label
              company.
              Apple has one size fits all, with variation done by apps and accessories. All the other phone
              vendors must use multi-device strategies to get broad support.




                                                          8                               Copyright The Kerton Group
CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief                                         2010

      Coolest iPhone App: Parrot G Drone
                                                                            You may know Parrot from their line
                                                                            of Bluetooth headsets and
                                                                            accessories. Parrot has taken a step
                                                                            outside the box and built an iPhone
                                                                            application part virtual and part
                                                                            fuuuun!

                                                                            The Drone is a four propeller,
                                                                            Styrofoam and plastic,
                                                                            remote-controlled flying machine.

                                                                               Once an iPhone user installs the
                                                                               drone app on their iPhone, they use a
      Wi-Fi connection to fly the drone remotely. The drone is controlled using the accelerometer in the
      iPhone, as well as a series of screen taps. This thing is six levels of cool:

          1.   It’s a flying Toy
          2.   It is controlled by the iPhone
          3.   It uses iPhone’s accelerometer to control the flight
          4.   There is a camera on the Drone that sends video back to the iPhone screen
          5.   An augmented reality mode adds virtual enemies to the screen for airborne battle
          6.   You can also fight head-2-head in a multi-drone mode

      During the debriefs, I showed some video I captured of this Drone. It is now available at Youtube:

      http://www.youtube.com/watch?v=h7u6sl3IauQ

      http://www.youtube.com/watch?v=Tj_8gHgHI1k

      Comments from the three live debrief sessions:

               Noted that everyone seeing demos wanted to buy one.




                                                            9                                 Copyright The Kerton Group
CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief                                          2010

      e-Readers
                                                         If CES launches are any indicator, then the market for
                                                         readers must be positioned to blow through the roof.
                                                         An incredible number of readers were being launched
                                                         and shown in Las Vegas. I'm still not convinced about
                                                         the long-term viability of the segment since much of
                                                         the value proposition will be subsumed by Netbooks,
                                                         tablets, and smartphones.

                                                         It seems the main selling point of these devices is the
                                                         e-ink screens that are
                                                         easier on the eyes for
      black-and-white, and have tremendous battery life. But what happens with
      the advent of better screens such as QUALCOMM's Mirasol technology.
      When low-power and color enabled screens get installed on multi-purpose
      devices what role is there for a dedicated one trick pony. The only way I see
      e-readers surviving, long-term, is if they themselves become tablets, doing
      far more than book purchase and display. That said, let's look at some of the
      launches.

      The Spring Design Alex eReader was an interesting hybrid device, with one screen using e-ink and
      another screen below it using standard color LCD. Based on the Android OS, this device comes with
      support for Twitter, a browser, and the promise of apps. Expect to see Alex in February this
      year.

                                                              Meanwhile, as the market heats up,
                                                              Huawei plans to offer a line of
                                                              e-readers to be brought to market by
                                                              telecom operators. Made by Tianjin
                                                              Jinke, Huawei will provide the
                                                              distribution, content management, publishing,
                                                              rights, etc. and offer a turnkey solution for carriers.

      Carriers have mostly let this opportunity go to the bookstores, which is not the
      most natural fit. Carriers have historically been the ones to provide devices, the
      connectivity, and only partner for content. In this case, they missed the boat.
      However, in the long-term, do e-readers even exist, or does that functionality get
      subsumed into a smartphone or tablet?

      Other notable readers at the show include the Skiff Reader which is a flexible
      11.5” screen with touch, the Plastic Logic Que with touchscreen, and the
      Entourage eDGe – another dual screen LCD and e-ink device with a clamshell form
      factor and Android.

                                                         10                                   Copyright The Kerton Group
CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief                                    2010

      Comments from the three live debrief sessions:

             E readers seem like technology for the older generation or people who prefer not to have too
             much tech in one device. They like it dedicated, simple. There is a whole market where more
             functionality as a deterrent rather than an asset. Technologists don’t think about keeping things
             simple.
             What about Apple’s upcoming tablet. Microsoft’s alternative just looked like a Kindle and made
             Ballmer look silly. (Wouldn’t be the first – Ballmer predicted the iPhone to fall flat.)
             If you see the color e-Reader demos, people are trying to recreate the interactivity of a
             magazine, with full color ads, etc. Is that what
             people want in a reader? Not sure.
             It all boils down to who has the best content
             ecosystem for the reader. Our telecom
             community has never been good with content.
             Content is king.
             On the web it’s hard to get paying subscribers,
             but on a dedicated device, and on mobile
             devices, people are much more willing to pay
             for content.
             References book called “Getting to Plan B” to
             highlight publishers that has done the best job
             with digital.
             An 11.5 inch e-ink display is ideal for viewing a spreadsheet.
             Won’t Apple mop up in this space?
             Netflix would be a good partner for e-Readers since they already have a lot of the licensing and
             content delivery in one place.
             I liked the Entourage Edge, had magazines and textbooks all in one place. Looks great for
             student coursework, and very interactive.
             Will we see ads on ebooks? Yes. Color ebooks are being touted as perfect for magazines, with
             color ads, and interactivity. These can subsidize the content or the device.
             Derek Kerton: Check out my blog post on what I would do to make a killer Apple tablet:
             http://www.techdirt.com/articles/20100114/1603307765.shtml




                                                       11                                Copyright The Kerton Group
CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief                                       2010

      Efficient Displays
      PixelQi Display

      A new display technology should runs the LCD display in normal
      backlit mode for indoor use, but can convert to non-backlit reflective
      mode like most e-readers. The non-backlit mode is strictly black and
      white, and can offer a significant savings in power consumption:
      from 2.5 W down to 0.5 W.

      The power consumption gains are proportional to the total amount
      of power the device uses. For example a laptop that consume some
      80 W of power sees a smaller benefit from the screen dropping from
      2.5 W to 0.5 W, but a tablet or slate running a mobile processor,
      where the entire device tends to consume below 10 W, could see
      significant extensions of battery life.

      Pixel Qi will soon offer their first product, a 10.1 inch screen, through
      various OEM partners. The company is Taiwan-based, with local
      offices in San Bruno California.

      Mirasol from Qualcomm

      I have been a big fan of this technology since I first heard of Iridigm.
      QUALCOMM purchased that company in 2004 and has been
      developing the technology since. While not completely ready for
      prime time, Mirasol displays are greatly improved over the
      demonstration units we saw last year.

      QUALCOMM has added color and increased the size of the screens.
      The key benefits of these screens are that they consume extremely
      little power, and instead reflect the ambient light using MEMS
      (micro-electric mechanical devices). The Mirasol displays only use
      power to change the display, which makes them extremely suited for mobile devices in which battery
      life is a particular weakness.

      Mirasol is making its way into a variety of products. Previously limited to tiny black-and-white screens,
      QUALCOMM says that we can expect to see e- readers by this fall. This will bring color, which has been
      lacking in e-readers.

      Comments from the three live debrief sessions:

              PixelQi is a relatively expensive technology to build.




                                                           12                              Copyright The Kerton Group
CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief                                     2010

      Netbooks
      I’m not going to cover all the Netbooks that were being shown at CES. It’s not directly related to
      telecom, and the task would be overwhelming. Suffice to say that over 2009, the market validated the
      Netbook sector with enthusiastic sales, and so there was a tremendous amount of innovation and new
      products on display. Netbooks were being shown with processors from Via, Nvidia, Qualcomm, and of
      course Intel’s Atom. They were being shown with OS ranging from Win7 and XP to Android, Linux, and
      un-named widget platforms. Battery life seems to have been universally upgraded to the 8 hour range
      (6-cells). Their sizes ranged from 8-11”, with dual screen models, Solid State Drive models, colorful
      models, and more.

      Smartbook: Lenovo Skylight is basically a big smartphone, with a widget approach to the desktop. With
      1GHz Snapdragon, cellular and Wi-Fi connectivity, and weighing in at just under 2 pounds. With a
      10-hour battery, 20Gig flash drive and SD and USB expansion, this is
      a lean, light, slim Netbook, in the truest sense of the name. The
      only confusing thing is how this Netbook will sell at $500. Expect it
      to be cheaper with carrier subsidy from AT&T.

      Meanwhile, MSI introduced two interesting prototype Netbooks
      with dual screens. One a 7” and one a 10”, both devices will run
      Windows 7, any use Intel Menlo processors which are designed to
      sip energy. Since the screens on these Netbooks are touch base, a
      soft keyboard with haptic feedback can be used on one while
      viewing on the other.

      Comments from the three live debrief sessions:

             Who is MSI? a Taiwanese computer maker that is strong in the Motherboard and component
             space. They have made laptops as a white-label for other brands, but are more recently selling
             their own brand of laptops and Netbooks (the Wind line).
             The $500 price point of the first Qualcomm-based Smartbook was disappointing. People were
             expecting $200-$300, and hoping for the cheaper side.
             If smartphones cost $500 at full price, why should Smartbooks cost less? Miniaturization drives
             the high costs of smartphones. There is an optimum size to minimize cost. The optimum size
             doesn’t require expensive shrinking, but also uses less materials, and that is about Netbook size.




                                                       13                                 Copyright The Kerton Group
CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief                                      2010

      Slate Computers
      Steve Ballmer's keynote speech didn't include any homerun
      announcements. Ballmer did discuss a few slate products which is a
      reinvention of the Microsoft tablet PC. HP and Archos are among the
      first to launch a Windows slate. While tablet PCs were not runaway
      winners, the success of networks, and the lower prices expected in this
      era, will make tablet in slate computing much more successful.

      By pushing the announcement at CES, Microsoft had the pleasure of
      getting their announcement in before the expected Apple tablet
      announcement that will probably happen by early February.

      Of course tablets and slates are not limited to Apple or Windows OSes.
      Android is expected to fit quite well in this category, and Dell is one of
      many manufacturers to start down that path. At CES, Dell announced a 5
      inch android tablet that fits in somewhere between a smartphone and a
      Netbook.

      There is no clarity as to what connectivity solutions slinks that books and tablets will have. Because of
      the low cost of Wi-Fi chips, some version at 802.11 with be the minimum. However, some of these
      devices will include cellular modems while others will not. Also, some that do include cellular radios may
      not function as telephones, but will only use cellular for data transmission.

      For their part, Motorola was rumored to be showing a tablet prototype as part of a Verizon LTE
      showcase. The Motorola tablet had a 7 inch screen and ran the Android OS on an NVIDIA processor.

      I will be very interested to watch how this category develops. As the average phone gets larger and
      larger screens, app functionality, and is always connected, it leaves less wiggle room for the slates.
      Similarly, Netbooks are squeezing the tablet’s place in the market from above. My opinion is that
      different consumers will choose different (multiple) devices to fit their specific needs. Some people may
      choose a simpler cell phone and a slate, while others choose a larger cell phone and a desktop
      computer. When we talk about wealthy consumers, we know that they want to fill multiple computing
      and connectivity needs: stationary desktop high power, the laptop for moderate power mobile
      computing, something with instant-on that fits around the living room or kitchen, highly mobile laptop
      like devices, and smartphones. Most consumers will not buy one of each, so they will solve their needs
      with overlapping compromises.

      Comments from the three live debrief sessions:

              How is a slate different then a tablet? Derek: I don’t think the terminology is absolute, but my
              understanding is that tablets are pen/stylus based, and slates are more finger-centric. Tablets
              are more PC-based, and slates more cloud.




                                                         14                                Copyright The Kerton Group
CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief                                      2010

      TV App Platforms
      Yahoo demonstrated their TV widget platform at last year's CES.
      Called “Connected TV”, the Yahoo platform is being stretched this
      year from TV embedded into set-top boxes as well.

      Last year, Yahoo! Was the leading company talking about a TV app
      platform for widgets. This year, the market has grown a great deal,
      and fragmented just as much. TV makers, portals, Set top box
      makers, and cable companies are all talking about app platforms.
      This will be frustrating, once again, for content (widget) makers,
      since they will have to built multiple versions of their widgets.

      Because of the increasing processor power inside TVs, during
      conversations at CES I heard people saying that the set-top box era was coming to a close. If TVs
      themselves can have processors powerful enough to render applications, support widgets, connect to
      the Internet, etc. then what role is left for the set-top box?

      I tend to disagree with this line of thinking, the set-top box is not designed to provide additional
      functionality the consumer, is actually designed to be a standard CPE interface to interact with head-end
      functionality of the cable provider, satellite provider, IP TV provider, or other. It took a standard like
      Cablecard to put a dent in the STB for HD decoding, and there is
      no such standard emerging for apps and widgets.

      Set-Top Box Sidebar

      I predict a long and healthy life for the set-top box, because
      embedded features inside of TVs are often not compatible with
      the content and services to the customer has subscribed. For
      example, how many televisions with picture in picture actually saw
      that feature be used. More often than not, the customer only had
      one cable drop at that location, and thus has no feed to drive the
      second picture. TV features are fragmented, and don’t always fit the content subscription of the
      customer. However when that feature is integrated into the STB, the cable provider can ensure that
      there is content for each window.

      Comments from the three live debrief sessions:

              AppleTV was a leader in this area. Ushered in the era of good UI and UX
              Blu-Ray makers are going for differentiation by adding many of these features. This makes for a
              good value prop over Blu-Ray alone, or a DMA alone, and uses fewer connection hook-ups
              Carrier: STBs are critical for managing conditional access, for the other functions such as
              decoding media types and basic computing, TVs will easily be able to handle it. Displayign web
              content is now trivial. How will conditional access be integrated into TVs, and will there be a
              standard (like cablecard)?

                                                        15                                Copyright The Kerton Group
CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief                                       2010

      TV Digital Media Adapters
      There were a slew of new digital media adapters and
      set-top boxes on display at the show. One of the most
      handsome was the new box delivered as a partnership
      between D-Link and Boxee.

                                Boxee has long been a provider
                                of an open source software
                                solution for handling digital
                                media at the home
                                entertainment center on a
                                computer. Like a disembodied spirit, Boxee could not get a lot of traction in the
                                general consumer market without a hardware solution, but through a
                                partnership with D-Link they have launched the Boxee box. This artsy set-top
      box can play media files stored on the network, or online
                             sources like major league baseball,
                             Netflix and Pandora. Empowered with
                             ethernet and Wi-Fi, the box also has
                             Facebook and Twitter clients, Flickr
                             and Picasa, and a Boxee browser. The
                             UI seems crisp and responsive, and is
                             managed from a remote control that is
                             classic on one side, and QWERTY
                             keyboard on the other.

                                Other interesting DMAs included one
                                from Seagate which used a modern
                                version of sneakernet to move content
      from office to home entertainment system. A hard drive
      cartridge can be connected via USB 2.0, filled with content,
      then slid into a slot in a compatible Seagate DMA.

      Comments from the three live debrief sessions:

              These products need to be dirt-cheap, ~$50 to have mass
              appeal.
              Integration into other devices is a good approach, such as
              Blu-Ray and game consoles.
              Best device is Sony Playstation, full console, full DMA




                                                         16                                Copyright The Kerton Group
CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief                                    2010

      PlayOn Software Solution
                                                               One particularly cool digital media adapter is
                                                               done entirely in software. PlayOn is software
                                                               that runs on your PC and works hand-in-hand
                                                               with your compatible game console.

                                                               Managed from the PC, but with a GUI on the
                                                               console as well, this solution uses the best of
                                                               the full PC keyboard/mouse interface.

                                                               The solution has the advantage of requiring
                                                               no additional hardware investment for the
                                                               user was already a console gamer. It also
                                                               required no additional wires or plugs or
                                                               connections

      The demonstration from the company showed that their solution at a great UI, good response times,
      and good quality video.

      Comments from the three live debrief sessions:

         •       What is their business model? Derek: A onetime software license of $40, nothing more, no
                 recurring payments. This is very attractive to the market that already has the required
                 hardware.




                                                       17                               Copyright The Kerton Group
CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief                                        2010

      3-D TV
      At prior CES events, it has seemed like the competition among TV vendors was to produce larger and
      larger screens. This competition culminated two years ago with a 130” home TV screen that required a
      coal energy plant just to power up.

      This year it was clear that the innovation was all around
      3-D technology. Most TV vendors are using a solution
      that requires an extra plate of glass and brings up the
      cost of the TV some $200 (the Pace 3-D technology). If
      you see the film Avatar, the experience is very similar.

      The standard gray glasses that were
      commonly being demonstrated feel
      very comfortable to the eyes and a
      3-D experience was not disorienting
      at all.

      Each side of the 3-D glasses is
      polarized to see a different image,
      and each glass plate in the TV
      presents a different polarization

      Comments from the three live
      debrief sessions:

              There are still many
              competing technologies for 3-D, and we’ll see
              adoption delays like we did with Blu-Ray v
              HD-DVD.
              Sony is a powerful force here, because they could
              push a cradle to grave complete ecosystem of
              Columbia pictures, Playstation, TVs, and glasses.
              They like to control the whole ecosystem, often
              fail, but they hold a good position here.
              Wearing glasses is just not a natural way to watch
              TV. People just upgraded to an LCD, and don’t want it to be obsolete so soon. There is not
              enough content yet. These will slow down adoption of 3-D TV.
              Sports will be the first content, and it looks great. Other content will follow, and at some point,
              adoption will begin to take off. We are not there yet.




                                                         18                                 Copyright The Kerton Group
CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief                                      2010

      3-D Gaming
                                                                               Of course television is just one
                                                                               area where 3-D was making a
                                                                               big splash at CES this year. 3-D
                                                                               gaming was pretty much the
                                                                               only kind of gaming on display
                                                                               at Las Vegas.

                                                                               Gaming has some advantages
                                                                               over television with respect to
                                                                               3-D. The artificial worlds created
                                                                               by the game developers are
                                                                               already mapped out in
                                                                               three-dimensional space. The
                                                                               only thing missing to provide an
                                                                               immersive experience for the
                                                                               gamer is a way of rendering that
                                                                               3-D world to our binocular
                                                                               anatomy.

                                                                                In the case of PC games the
      glasses are usually connected by wire, or synchronized by infrared signal in each side of the glasses
      blacks out at a 60 MHz rate. By alternating which eye is able to see the screen, a 120 MHz screen is able
      to create an interlaced 60 MHz stereoscopic image.

      Nvidia and ATI are leaders in this space.

      Comments from the three live debrief sessions:

              Gamers need to make fewer changes or upgrades to get 3-D. Many fewer barriers than TV case.




                                                        19                                 Copyright The Kerton Group
CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief                                            2010

      3-D…Well, Just More 3-D
      Realview Innovations, out of Ireland, has a film that can be put on a flat-screen TV that creates the
      static illusion of depth in the screen. At up to $500 for a large screen, I think it’s too pricey for the effect
      it creates.

      Remember the lenses at right from the 1950s? It could make
      your 17” screen look huuuuuge!

      Shapeways has a 3-D printer. It basically makes a sculpture
      layer by layer, impregnating each layer with color ink to
      create the image.

      Fujifilm has the Finepix Real 3-D W1 camera, which has two
      lenses and shoots 3-D photos and video. For $600, the
      camera has a screen which reveals a 3-D image on the
      viewfinder, sans glasses. A 3-D photo frame is also available
      to enjoy the snaps for $500.

      Comments from the three live debrief sessions:

              Will there be 3-D advertising to go with the TV
              programming?
              3-D ads will initially have good traction because people may choose to watch them. That will
              fade rapidly.
              The future of advertising is embedded, product placement, overlay type. PVRs will wound the 30
              second spot, and Internet delivery will finish it off.




                                                            20                                  Copyright The Kerton Group
CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief                                     2010

      OK…Looking For a Volunteer?
      Nothing to say other than…I wouldn’t sit in the front row!




      Comments from the three live debrief sessions:

              When I saw this booth, there was a man there, said it was his 21st birthday, so they gave him a
              “Birthday demo”. That kind of show recreation is best suited for the young!




                                                        21                                Copyright The Kerton Group
CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief                                      2010

      Nexus One and Android
      The Nexus handset from Google was frequently discussed at the show, but since the Nexus news came
                                                              out a couple of days before the show, and
                                                              was widely expected even then, there
                                                              wasn't that much to discuss. Many people
                                                              took advantage of CES to get their hands on
                                                              the device for the first time.

                                                                  Meanwhile, Android made steady progress
                                                                  throughout the convention halls. For
                                                                  example, AT&T announced a plan to launch
                                                                  five Android devices during the first half of
                                                                  2010. The AT&T devices will come from
                                                                  Motorola, Dell, and HTC. With that, every
                                                                  major carrier in the US will offer
                                                                  Android-based devices.

                                                                  Android also made an appearance in a
                                                                  variety of tablets, networks, and reader
                                                                  devices. Android is clearly stretching its legs
                                                                  which appear to extend beyond smartphone
      market and much deeper into CE.

      This is a contrast from last year when there was only one Android device on the market.

      In separate news, Google launched Near Me Now as a feature integrated in its mobile web search page.
      With a single click, this tool allows the user to see a variety of businesses based on closest proximity.
      Although just a first pass at this type of effort, the feature makes it clear that Google intends to be
      dominant in location-based services. One can see the threat this poses to app vendors such as
      Nearbynow, review sites such as Yelp, or LBS specialist such as Foursquare or Gowalla.




                                                        22                                 Copyright The Kerton Group
CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief                                      2010

      Light Blue Optics
      http://lightblueoptics.com/

      At the CES show we saw the debut of a new product from a company called Light Blue Optics. The
      UK-based company has released a projector that is also a touch sensitive user interface device. Using
      proprietary holographic laser projection technology, the projector creates a 10 inch image with very
      short throws. By using the laser image can remain crisp even at such wide angles. Meanwhile, an
      infrared sensor detects finger motion, and can interpret it as input.




      The company plans to offer their product as a reference design to a variety of OEM partners. They
      anticipated the device being used in home electronics, enterprise, mobile cases, and retail. The platform
      runs Adobe Flashlite, as two hours of battery life and upgradable SD memory.

      Among the partners that were announced during CES are Adobe, Cambridge Silicone Radio, Foxconn,
      Interbrand, Microsoft,Micron, Nichia, Opnext, Photop, and Toshiba.

      From my perspective, is. It illustrates how we can have our cake and eat it in the sense of the constant
      desire for smaller and smaller devices while simultaneously craving larger and larger screens and
      keyboards. That said, I'm not sure LBO can claim and defend this type of solution. Apparently the laser
      holography is a patented solution but the general concept is something that is inevitable, and will
      eventually be a part of many mobile devices.




                                                         23                                Copyright The Kerton Group
CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief                                          2010

      Wireless Charging Mats
      Powermat

      Powermat launched at CES in 2009 with a charging solution
      that looked very cool, but presented us with a classic
      chicken and egg dilemma. Until phones come equipped with
      the induction receivers, who needs a charging pad? And
      until everyone has a standard charging pad, why should
      handset makers including induction receivers.

      Well, for those of you watching, Powermat flooded the TV
      networks would advertising through the Christmas shopping
      season, and may be emerging as a category leader. That
      might be enough to get handset makers to pay attention,
      but Powermat is not willing to wait.

      They have improved on 2009’s designs with sleeker cases. But the biggest improvement has to be the
      embedding of the induction receiver in a replacement battery. With these Powerpacks, no special cases
      are needed, and no changes in the form factor of the device are
      required. Simply swap out your OEM battery for the Powermat
      battery, and your device is fully compatible. Powerpacks will be
      available in 1H2010.

      In addition to these two big improvements, Powermat also
      introduced a mobile charging pad that is battery powered.

      PureEnergy Solutions

      This company also had their solutions on display. This solution is not induction-based, but uses metal
      nubs that stick out of the custom phone case. The nubs touch the metal strips of the pad, and an
      appropriate voltage is transferred.

      Comments from the three live debrief sessions:

          •       Induction is not 100% efficient, so
                  energy is wasted in the transfer.
          •       But Powermat also is “green “ by
                  shutting off power when the battery is
                  fill.
          •       What is Palm using? A: It is induction-based, and if there is a partner, it is not disclosed.




                                                          24                                  Copyright The Kerton Group
CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief                                        2010

      Palm
      The beleaguered Palm made some good progress during the show. They announced upgrades to the Pre
      and Pixi, and the more important development that the Palm Pre, and the Pixi are to be released in the
      US with AT&T, and the nation's largest carrier, Verizon. Unfortunately for Palm, they will be but one of
      the many smartphones at Verizon. As we all know, Verizon’s marketing is currently focused on the
      Droid. Palm also announced the GSM version will hit SFR by Q2. Flash 10 support is also coming “soon”.




      In conjunction with these new launches, Palm is making a big push to increase the number of
      applications in their store and currently hovering around 1000 apps, Palm is offering a $1 million prize
      to be distributed among the developers of the best selling applications between February 1 and May 31
      this year. While the $1 million may be a nice sweetener, what really entice developers is installed base.
      If Palm can get some marketing support from AT&T and Verizon beyond just carrying the phone, they
      might just survive long enough to remain a thorn in the side of the biggest smartphone vendors. Since I
      love competition, I hope they can pull it off.

      Will Verizon Get Behind Palm?

      It will be particularly fun if Verizon really gets behind the Palm phones with marketing muscle. There are
      a lot of would-be iPhone buyers who have stayed away from the device because they are dedicated
      Verizon customers. Some of them will have gone to the Droid, especially with the marketing money
      Verizon spent on that campaign. However, with recent Nexus One launch, and Google thumbing their
      nose at Verizon, Verizon might prefer to invest in the Palm OS devices as their main weapon against
      iPhone. Certainly this would be good for Palm, and it also may be good for Verizon and its customers.

      App Store Appathy

      I have been writing for a while that application stores demonstrate the law of diminishing marginal
      utility perfectly. Beyond 10,000 apps, what truly is the marginal utility of adding that 10,001st? Consider
      that in light of the fact that the majority of users pick their apps from among the top 20 lists. Other than
      bragging rights, the market couldn’t care less about whether the iTunes store has 80,000 or 100,000
      apps. However, at 1000 apps, the Palm store is lagging the competition to a significant degree. Palm
      needs to entice developers and get up to 10,000 apps, so they too can join in the “there is an app for
      that" game.
                                                          25                                Copyright The Kerton Group
CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief                                         2010

      Intel Had A Good CES
      Laptop Chips

      Intel put out a new line of Core i3, i5,and i7 laptop processors. This isn’t a telecom topic, so to be brief,
      they are excellent performers and have good power/performance ratios. However, the naming and
      numbering conventions are very confusing as my desktop PC’s i5 is quad core, but the new i5 is dual
      core. Basically, each product name represents multiple versions, and consumers will certainly not “get
      it”. Perhaps customer confusion is part of the marketing strategy to prevent the MHz wars of the past.

      Wireless HD

      Intel had a very interesting service called Wireless HD. By pairing an enabled laptop with the remote
      adapter, the user could throw video off of their laptop to their home entertainment system. It basically
      boils down to wireless HDMI. This product works very well, and poses a minor threat to digital media
      adapters and such.

      Specific laptop models will ship with a solution embedded, and the receiver by Netgear.

      Works a lot like a $10 HDMI cable!

      Intel Smartphones

      During Intel CEO Paul Otellini’s evening keynote, he discussed how Intel will promote the Moorestown
      chip for smartphones using the Moblin OS. Along those lines, he demonstrated the LG GW990 on stage.
      This big smartphone has a 4.8 inch display and 1024 x 480 resolution, or 720p output. With 16 GB of
      flash storage, it could make a run is a competent media player. Otellini says to expect the device in the
      2nd half.

      Intel My WiFi

                                                           Intel was demonstrating an embedded solution for
                                                           sharing any Internet connection over WiFi. The My
                                                           Wifi feature can even take it one WiFi signal and
                                                           share it back out to a group of eight using time
                                                           division multiplexing on a single Wi-Fi radio.

                                                           The solution also offers very easy collaboration tools
                                                           such as file sharing, whiteboards, etc. It was
                                                           impressively easy to use. When did Intel get good at
                                                           ease of use?




                                                          26                                  Copyright The Kerton Group
CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief                                    2010

      Lenovo
      IdeaPad U1 Hybrid

                                   For those unwilling to compromise
                                 perhaps they will be interested in
                                 the Lenovo IdeaPad U1 Hybrid
                                 laptop. This versatile laptop runs
                                 Windows 7 on an Intel Core 2 Duo
                                 Ultra Low Voltage processor. It uses
                                 a solid-state drive, and 11.6 inch
                                 screen. But there's more, if you
                                 detach the lid, it becomes a tablet
                                 computer. The lid itself as a separate ARM CPU, 3G cellular, and Lenovo’s
                                 Skylight Linux OS. This chameleon will run you $1000 in June, 2010.

                             More at Lenovo’s official YouTube post:
      http://www.youtube.com/watch?v=-5DYuVN6nuY

              CNET gave us their 2010 Best Computer of the Show award
              Laptop Magazine: Best Laptop Award

      Lenovo LePhone Smarthphone

      Snapdragon-based Android smartphone that opens in clamshell
      landscape format with a unique circular-looking QWERTY around a
      central D-pad. The biggest innovation? The keyboard is detachable, so the user decides how much to
      carry.

      Lenovo Skylight

      Smartbook: Lenovo Skylight is basically a big smartphone, with a
      widget approach to the desktop. With 1GHz Snapdragon, cellular
      and Wi-Fi connectivity, and weighing in at just under 2 pounds. With
      a 10-hour battery, 20Gig flash drive and SD and USB expansion, this
      is a lean, light, slim Netbook, in the truest sense of the name. The
      only confusing thing is how this Netbook will sell at $500. Expect it
      to be cheaper with carrier subsidy from AT&T.




                                                        27                               Copyright The Kerton Group
CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief                                          2010

      Motorola
      I noticed a big lack of interest in Motorola’s Droid displays. In the photo, you see a bunch of Droids on
                                                                                   podia, with ample space for
                                                                                   crowds, but few people
                                                                                   interacting. There was another
                                                                                   area with about 8 droids on a
                                                                                   table, and a few people were
                                                                                   there. Importantly, I asked the
                                                                                   group at the debriefs, and they
                                                                                   said that during their visits to
                                                                                   the Motorola booth, the Droid
                                                                                   WAS getting lots of attention
                                                                                   and traffic. I must have just hit
                                                                                   a rare lull in foot traffic.

                                                                                   However, Motorola and Verizon
                                                                                   are no doubt very angry with
                                                                                   Google for distracting attention
      from their three-way partnership on the Droid. By dropping the Nexus One on the market less than two
      months after the Droid, Verizon and Motorola got very little time with the flagship Android phone. The
      Nexus has absolutely drained a lot of energy from the Droid (whether sales figures support it or not).
      Despite this, the Droid is subsidized by the leading carrier brand, it will probably sell much better than
      the $500+ Nexus, or the Nexus on T-mo.

      DCX3400 Set Top Box with 3-D UI

                                                      Motorola had an impressive STB on diplay in which the UI
                                                      was also in 3D. It was a very immersive menu, with things
                                                      falling to the background, and sticking out in the
                                                      foreground.

                                                      Comments from the three live debrief sessions:

                                                               Google, insomuch as they seem to be competing
                                                      with their channel partners, was wise to come out with the
                                                      Nexus One before the show. They stole lots of Motorola’s
                                                      momentum before the show even began. Was that move
                                                      “evil”? Nope, but it’s risky.




                                                           28                                 Copyright The Kerton Group
CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief                                      2010

      Pico Projectors
                                                                These were very popular at the show, but
                                                                there was no mention of a really good usage
                                                                scenario beyond the traveling Biz Dev
                                                                salesperson and a PowerPoint presentation.

                                                                Since they emerged at CES last year, the
                                                                brightness has increased, the plastics look
                                                                more evolved, and the number of vendors has
                                                                shot up. But isn’t this a technology that really
                                                                needs some tight integration before it will
                                                                take off?

                                                                 Also, this product will face the real world
                                                                 challenges of the need for a good projection
      surface, and the need for a stable projection platform. The demonstrations that show them being
      handheld are fine, but nobody wants to watch a shaky, moving image for more than a few seconds.

      Comments from the three live debrief sessions:

          •       Lumens need to come up even higher before they are a practical alternative to full-size.




                                                        29                                Copyright The Kerton Group
CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief                                        2010

      Femtocells
      Femtocells were not the talk of the show, however I do
      want to mention them because I think it was a very
      interesting development in the Femto sector.

      I spoke with leaders of the Femto Forum to ask why it
      was taking so long for carriers like AT&T to use femtos to
      fix some of their capacity challenges. The opinion that
      was offered was that there are still some provisioning
      hurdles to overcome as femtocells are integrated into
      carrier networks. Thus, AT&T has chose the sparsely
      populated and relatively poor cellular coverage
      SouthEast instead of the know weak areas of NYC and
      the SF Bay Area. Although NYC is a better fit for the
      technology, there is concern that it needs to be perfect
      first, and that the rush of new provisioning not
      overwhelm the projects success.

      While carriers are not rapidly deploying femto cells,
      along comes disruptive vendor MagicJack. This company
      is best known for providing a small device that plugs into
      the USB port of a computer, and allows the telephone be
      plugged into the device and route its calls over the Magic Jack view IP service. It sells at Wal-Mart and is
      basically the AOL of VoIP.

      Magicjack took advantage of CES to announce a new product that hopes to be as disruptive with the
      cellular industry as VoIP has been in the fixed telecom industry. Their new device is basically a Femtocell
      that a user can plug into their home broadband connection. The user then brings her phone within 8
      feet of the device and presses a pairing button. Once paired, the GSM phone will connect to the
      MagicJack instead of the carrier tower. Calls are routed over MagicJack’s VoIP.

      Naturally, carriers are exactly thrilled about this product. The carriers immediately accused Magic Jack of
      illegally using their licensed spectrum, to which Magic Jack replied that within the home consumers are
      free to use the spectrum as they choose. I don't agree, and I don't think the FCC will either. This one will
      be fun to watch.

      Comments from the three live debrief sessions:

          •       Let’s see how long it takes them to be shut down by the FCC
          •       I had bad experience with the original MagicJack, quality-wise.
          •       Maybe they’re just doing this for press?




                                                          30                                 Copyright The Kerton Group
CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief                                      2010

      Videoconferencing from the TV
      Cisco and Skype are both going after the embedded opportunity in TV-based video conferencing. Skype
      has arrangements with LG Electronics and Panasonic to embed Skype clients and 720p
      videoconferencing in some of their upcoming TVs.




      Cisco calls it Home Telepresence, and is in trials with Verizon and France Telecom. Cisco says their focus
      is on HD, and that High-def is the critical factor in good user experiences for TV-based video calls.

      Skype and Cisco won’t have this battle to themselves for long. There's going to be a long line of
      companies who want to own the customer experience for living room-based videoconferencing. Getting
      the solution embedded in the TVs themselves is the big prize. I find myself wondering: Who will win the
      hearts of consumers? The company whose videoconference focus has been $35,000 systems or the one
      whose focus has been free communications services for everyone?

      Comments from the three live debrief sessions:

          •       Some wondered if Skype is paying the TV-makers, is charging them, or is it a cash-free deal.
                  No answer, but the audience supposed cash-free.




                                                         31                                Copyright The Kerton Group
CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief                                       2010

      Mobile TV
                                                               QUALCOMM has seen some traction for its
                                                               FLO TV. While I did not see a lot of phones at
                                                               CES, FLO was being demonstrated in in-car
                                                               systems and consoles.

                                                               Also, an interesting product (Mophie) that
                                                               plugs into the bottom of the iPhone and
                                                               connects it to an FLO feed may be a way for
                                                               QUALCOMM to get some traction via the
                                                               highly popular device. My bet, however, is that
                                                               it won't sell so well. FLO is simply a hard sell at
                                                               $10-$15 a month when YouTube clips are
                                                               included for free in the iPhone data plan.

      I have been negative on mobile TV as a paid subscription service since my days with SK telecom in 2002.
      While the technology has changed, the economics have not. Unicast is too expensive to deliver,
      broadcast does not offer the personalization that can command a $10 per month ARPU, and any
      subscription service faces competition from a litany of free content. Beyond die-hard sports fans, good
      luck.




                                                                                                             The
      Open Mobile Video Coalition, made up of broadcasters, is pushing a standard technology that will
      simply grab specialized mobile versions of the regular broadcast TV content and
      display them on phones. This is the traditional TV approach, supported by
      advertising, and broadcast in real time feed. The OMVC is seeing impressive
      traction quite quickly and appear to be squeezing out cellular broadcast and
      unicast solutions. Understandably so, too, because the economics of broadcast
      have always been the appropriate fit for television. The big question was how the
      broadcasters get their receivers inside of phones when is the carriers that
      subsidize the devices. The OMVC has achieved the unthinkable, and Sprint even is
      offering a fully-subsidized Samsung Moment (Android) with the receiver built-in.
      That’s an unexpected relinquishment of power from a US company, but it is only
      one device.


                                                       32                                  Copyright The Kerton Group
CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief                                     2010

      In Japan, that issue is solved with customers buying unsubsidized handsets. In the US, the issue may be
      solved by a device like the Korean Valups Tivit. The Tivit, introduced at the show,
      is a stand-alone gateway device that looks a lot like a transistor radio circa 1970.
      The device pulls in the digital TV signals and retransmits them to mobile devices
      on a WiFi carrier. Much like a Myfi shares a cellular connection over WiFi, the Tivit
      shares free broadcast TV. A client media player must be installed on the
      compatible cell phone (iPhone, Blackberry, Windows). At a price between $90 and
      $120, the Tivit remains a tad expensive, but after a year, it’s cheaper than the TCO
      of monthly MobiTV or FLO subscription.

      While the broadcast solution does not have the personalized aspect of Internet video, I simply can't
      argue with the economics. I think this is one of the mobile TV solutions that will succeed.




                                                        33                                Copyright The Kerton Group
CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief                                      2010

      Clear Overdrive
      Sprint announced a new gateway product for their WiMAX network ambitiously called the Overdrive.
      Made by Sierra Wireless, the overdrive is a dual-mode 3G/WiMAX gateway modem which creates
      portable hotspot connecting all the users wi-fi devices to the wide-area network. If you're familiar with
      the MyFi devices, this is much like it but with 4G.

      The Overdrive will be available from Sprint stores and from Best
      Buy for $100 with a two-year commitment. What makes the
      Overdrive so strategically significant for Sprint is that it fills a
      gap in terms of WiMAX’s lack of devices. With the Overdrive, a
      subscriber can connect any device that has WiFi to Sprint's 4G
      network, at up to five devices at a time. For people who live in a
      Clear network coverage area this could be a very attractive
      solution, combining the best of the MyFi with the higher speeds
      of the WiMAX network.

      Features of the overdrive include:

              battery operation
              GPS
              MicroSD slot for up to 16 Gbytes of flash memory,
              shared as NAS
              3G/4G roaming

      Clear speeds vs. TeliaSonera

      On a separate note, Laptop Magazine tested the Clear WiMAX speeds, and found them to be superior
      to the benchmark Verizon 3G CDMA EV-DO Rev A, but I was surprised by how narrow the difference
      was. In their Baltimore tests, they found 3G had up/down speeds of 0.5/2.4Mbps while the 4G Clear had
      1.4/3.1. In their Las Vegas tests, Clear got better download of 4.4Mbps, but worse upload of 0.6Mbps.

      While the speeds are certainly nothing to sneer at, they are still much less than I would expect from a 4G
      OFDM technology and a carrier with 100 MHz of spectrum. A colleague in Sweden reported back to me
      that his tests of TeliaSonera’s commercial LTE network showed 45 Mbps down and 5Mbps up. At CES,
      LG demonstrated an LTE download running at 100Mbps! These comparisons aren't exactly scientific, but
      they are honest. They leave me wondering how the Clear network is only able to eke out a 2X
      improvement over 3G.

      Comments from the three live debrief sessions:

          •       The audience believed the network speed data. The Sprint delegate was wisely silent. The
                  room supposed that it might be prudent of Sprint not to set the expectations too high, and
                  then to have congestion or tiered pricing bring the speeds down later. No real answer,
                  though.

                                                           34                              Copyright The Kerton Group
CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief                                        2010

      USB 3.0
      Ten times as fast as USB 2.0, the latest version of USB standard is much better suited two of the large
      media and video files of this decade. Entire system backups can happen quickly and external drives can
      be filled at a rate of almost 5 Gb per sec - providing the drive can handle
      data that speed (it can't).

      USB 3.0 also increases the current available for charging mobile devices off
      the USB port to 900mA is. Because the port is powered, smaller form factor
      hard drives do not need any auxiliary power to be plug-and-play (unlike
      eSATA).

      Intel may be dragging their heels on USB 3.0 because it competes with their
      homegrown technology, called LightPeak. LightPeak uses fiber optics connections to much the same end
      as USB. While Intel has delayed the implementation of 3.0 in their chipsets until 2011, we are already
      seeing some stores devices and some upgrade cards that can get the early adopters there sooner. In all,
      17 different SuperSpeed USB devices were shown in Las Vegas. The 17 comprise computer hardware
      and removable hard drive storage.

      Consumers, all-too-familiar with a painful routine of waiting for their files to transfer before they can get
      up and go, will look forward to additional CE devices powered by USB 3.0. On the wish list are portable
      media players, camcorders and cameras.




                                                          35                                 Copyright The Kerton Group
CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief                                      2010

      Samsung Dominates Press for a day
                                                                         I’m not sure how they did it, but
                                                                         Samsung completely dominated the
                                                                         news coming out of Las Vegas on
                                                                         January 6. In the CES headlines
                                                                         newsletter, Samsung had five of nine
                                                                         headlines. News included:

                                                                         A new 1000 Lumens LED data
                                                                         projector, a new green LED monitor,
                                                                         Samsung's first e-book, LED HDTV's,
                                                                         an app store for TVs, Blu-Ray players,
                                                                         home theaters, and select mobile
                                                                         phones.

                                                                          Although Samsung's announcements
      were impressive, one must assume that their ability to time it during a relatively quiet period is related
      to heavy sponsorship of CES - in fact the Samsung pavilion at the show was more like a city than a booth.
      Good products, and great marketing at the show.




                                                        36                                Copyright The Kerton Group
CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief                                      2010

      Ford Sync
                                                   Ford clearly was a big sponsor of the CES show. Their cars
                                                   were all over the show buildings, they had a keynote
                                                   address, and a presence in multiple booths. The main
                                                   thrust of Ford's presentation was the Sync system that
                                                   brings intelligent IT to the automobile industry.

                                                    Sync is a set of solutions that deal with mundane things like
                                                    entertainment systems, cutting-edge technology like
                                                    Internet connections, critical safety systems, management
                                                    of onboard car systems, and a widget like environment to
                                                    bring Web content to traveling Ford owner. Sync it will
                                                    also integrate with your mobile phone providing a voice
                                                    and touch interface for controlling your phone's functions,
      triggered by steering wheel controls or large touchscreen in the console. Customers can manage widgets
      at the Sync My Ride website.

      Ford is marketing sync as a platform, and expects to
      entice developers with the impressive statistic of a
      planned 1.5 million Sync-equipped cars to hit the road in
      2010 alone. It was Vegas, Ford announced partnerships
      with Pandora, OpenBeak, and Stitcher.

      In a very “open” strategy, Ford intends to offer
      development tools for free if you take no revenue share
      in content developed for the Sync platform. Instead,
      they hope to see the kind of benefit Apple saw when a
      range of apps dramatically increase the value of the underlying hardware. For now, Ford says that the
      vehicle data (fuel consumption, etc.) will remain inaccessible to widget developers.

      Sync was developed by Microsoft, which largely explains the unlikely widgets of word processing and
      spreadsheets pictured above, but has me wondering why there is an Opera browser.

      Separately, Ford is talking up the MyTouch platform which will emerge in the 2011 Ford Edge. MyTouch
      isn't a change touchscreen sitting in the console and controlling car functions like navigation climate
      control and radio. But if a user connects a cellular modem screen can be used for browsing the web and
      other Internet functions.

      Comments from the three live debrief sessions: Other automakers working with Sync/MSFT.; Sync is
      confusing, does it mean Synchronize?- No.




                                                         37                                Copyright The Kerton Group
CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief                                    2010

      Synaptics’ Touch Demo
      Although nothing that wouldn’t be expected, touch-sensor leader Synaptics showed a prototype
      touchscreen plugged into a laptop as a proof-of-concept platform to illustrate various new ways of
      managing an OS via touch.

      Videos of different Touch UI Prototype ideas, such as grab and crumple, wipe out erase, 5-point
      multi-touch, and press pressure are available at the links to my videos below.

      Since this is just a proof-of-concept demo, we’ll forgive them that the “press harder to zoom demo
      failed”.

      http://www.youtube.com/watch?v=GmFE5jl844k

      http://www.youtube.com/watch?v=0LhRicl8RUw

      http://www.youtube.com/watch?v=r6eDoB3AvFs




                                                       38                                Copyright The Kerton Group
CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief                                    2010

      Home Control
      Home control is at the show every single year. A few different standards
      battle it out, have their demo pavilions, and introduce newer
      products…and yet the market never seems to take off.

      While these smarthome products appear quite innovative, potentially
      useful, and should appeal to the mass market, they fall flat. What’s up?

      Comments from the three live debrief sessions:

              Consumers don’t want to pay a lot of money to upgrade
              something that they see as working just fine. Nobody complains
              that their light switches or thermostat just aren’t good enough.
              Derek said: There is an aversion to things that don’t work reliably.
              These products have historically worked as well as 90% of the time: that is how often does the
              light go on when you click the “on” command.
              Consumers will basically reject anything less than
              99%, since the old technology works 100%.
              All the big brands in switches, electronics and HVAC
              continue to work on solutions.
              There is a market for these for people who have
              second homes that can’t be as readily managed in
              person.
              Derek: one barrier to the market is cost, but if
              solutions can be built on top of other trends, that
              might lower costs. Ex: using existing wifi, or tablet
              PCs, or Android OS could potentially reduce the
              cost for the system.
              Home builders and consumers want to see the
              payoff or the ROI. One way this could happen is
              with smart meters and smart thermostats. There are savings
              to be had here, and that could be the entry point into the
              market.
              We invested in home control, but could not find a good
              channel. There are no installers who are blue-collar enough
              to install wire, and white collar enough to do IP work. Home
              builders don’t like the margin, Geek Squad can’t be
              bothered, and home security services would rather focus on
              their $30/mo ARPU businesses.




                                                        39                               Copyright The Kerton Group
CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief                                      2010

      Zomm Phone Reminder/Theft Alarm Device
      I include Zomm in this report because the device won awards, was talked about extensively, covered in
      numerous blogs…despite the fact that I don’t find it very appealing. Well, this is a crowd-sourced report,
      and the crowd liked Zomm.

                                                                              Zomm is a product that connects
                                                                              wirelessly to your phone using
                                                                              Bluetooth. It is intended to be
                                                                              kept in your pocket or
                                                                              somewhere else on your person.

                                                                              When your phone and the Zomm
                                                                              get too far apart, the Zomm
                                                                              sounds an alarm.

                                                                               The device also functions as a
                                                                               Bluetooth speakerphone, a
      personal alarm, and will also dial 911 on your phone quickly and easily. Zomm should be available by this
      summer or $80. I question the consumer's appetite for such a device at an $80 price point.




                                                         40                                Copyright The Kerton Group
CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief                                    2010

      In-Vehicle Cameras / Black Boxes
                                                              Just a quick observation that there were all
                                                              kinds of dash-mounted cameras, mostly
                                                              intended for consumer use.

                                                              These are standard issue in police cars, and
                                                              some verticals where the vehicle drives many
                                                              miles per year, and there is ROI.

                                                               The fact that this is now a consumer product
                                                               reflects the dropping prices in digital video
                                                               cameras, and flash storage media. When the
      price is cheap enough, why not grab video of the road ahead. How much could it be worth in case of a
      disputed accident? Is it just another form of insurance?




                                                        41                               Copyright The Kerton Group
CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief                                     2010

      Other
      Nuance Speech Recognition:

      We got to chatting in each of the sessions, and one of the topics that
      came up was voice control. I mentioned that I got a demo of Nuance’s
      Dragon voice recognition on an iPhone inside a very loud trade show
      room, and was absolutely blown away by the recognition accuracy.

      I’ve heard and seen voice recognition pitches for over a decade, but
      never seen one that worked outside of a quiet room...but quiet rooms
      are precisely where I do not use my mobile devices. This app is free
      for now, but the business model is to charge for it once it gets
      traction. As a side note, I’m not associated with Nuance, but I used
      Dragon’s desktop voice recognition software to write about half this
      document (when my fingers get tired).

      Voice recognition was a warm topic at CES, with Google integrating it
      into the Nexus One.

      Were there app developers at the show?

      Not really. It doesn’t fit the show. They’ll be at MWC and CTIA, and other local developer venues like
      Mobile Monday.

      Disappointed At MSFT

      Many of our attendees were disappointed in MSFT’s lack of progress on any front, lack of any big
      announcements, and a general weak Keynote. I agree, although it’s also true that people are generally
      hard on Microsoft. This year’s keynote was about non-interesting products, and seemed to be an effort
      to get ahead of Apple on the tablet/slate race. Microsoft’s best efforts so far are in the game console,
      the IPTV sector, and the in-car systems where it has had several contract wins – if not winner products.

      Green / Sustainability

      The debrief attendees asked why there seemed to be little mention of “Green” products, since that had
      been a dominant theme at last year’s CES. We all agreed that “Green” seems to have dropped off the
      map at CES, but those who went to Vegas noted that “green” was just not new anymore, but was still
      growing in implementations. Most products had green aspects, such as shutting off “vampire” power
      drain, or reduced energy use, or LEDs etc. Green just seems to have moved down the list from top bullet
      to below the fold. That may be a good thing for the environment.

      Qualcomm resurrecting BREW

      Qualcomm announced progress on re-launching BREW as a “smartphone-ish” OS for middle and
      low-end phones. Dedicated widget BREW apps will help the phones appear similar to their more
      expensive cousins. AT&T is on board.
                                                        42                                Copyright The Kerton Group
CES, Consumer Electronics Tradeshow, Las Vegas - Analyst Debrief                                    2010

      Android

      Very strong showing at CES, well beyond just phones. Tablets, Netbooks, e-Readers and more all had
      Android.

      Comments from the three live debrief sessions:

             Android has no firmware control. They ship 1.0 and 1.5 and then abandon those versions. The
             updates are too infrequent, and the result is the kind of fragmentation we saw in the Java space.
             Customer service is non-existent on Nexus One phone. This will haunt Google.




                                                       43                               Copyright The Kerton Group

				
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