The New York Times The New York Times Technology January 13, 2003  

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At Big Consumer Electronics Show, the Buzz Is All About Connections

By SAUL HANSELL

LAS VEGAS, Jan. 11 — Not too long ago the only way to put your vacation snapshots on your television was with Scotch tape. Mainly, photos stayed on paper, music on the stereo, e-mail on the computer and movies on the television.

But since the consumer electronics industry has persuaded people to convert their music, photos and television into digital form, it is now possible for nearly any bit of sight or sound to be disgorged by nearly any digital electronic device. And that sets the stage for the industry's next big opportunity: selling products that link all these digital devices into various forms of home networks.

At the Consumer Electronics Association's annual trade show, which was held here Wednesday through Saturday, the industry was jubilant over its success with digital products. Despite economic uncertainty, sales of consumer electronics in the United States increased by 3.7 percent in 2002 to set a record of $96.2 billion, according to the association. The trade show, with 2,200 exhibitors and 100,000 attendees, has become the largest convention in North America, eclipsing the Comdex annual computer show.

What excited the manufacturers here most was the prospect that all these digital devices will create even more needs to fill. Now, the companies say, people need so-called media hubs and computer servers to store and organize photos, music and video. They need wired and wireless networks to move them around their houses. And they need portable gizmos to keep all the content in their pockets wherever they go.

"The boundaries of what constitutes consumer electronics and computers are getting blurred," said Gerard J. Kleisterlee, the chief executive of Royal Philips Electronics in an interview here. "As we get wireless networking in the home, everything starts to talk to everything."

No one is shipping a product that does all of this yet, but the show featured myriad new products that connect something to other things. Most common were systems to route music, downloaded from the Internet or copied from CD's, to home stereo systems, rather than confining it to tinny computer speakers. Other systems enable television sets to view photographs as well as home videos and, in some cases, to record television programs stored on devices in another room.

A new class of portable devices also appeared, one that lets users watch downloaded videos on the go, much as they now listen to MP3 audio files.

Amid the cacophony of product introductions here were the rumblings of an underlying debate about what sort of device will be at the center of these home-based networks.

Electronics companies like Philips, Samsung, RCA and Pioneer have created stand-alone devices to sit in a stack with other audio and video components. But computer companies like Hewlett-Packard and Viewsonic have introduced expanded Windows-based PC's to control audio and video signals.

"The place where it all comes together, your video and audio and your preferences, is the PC," said Bill Gates, the chairman of Microsoft, which makes a version of its Windows XP operating system that is used by the Hewlett-Packard and Viewsonic media computers.

"People want things in one place," he added. "When you had things in tape formats, you were always wondering where they were. It's very different than having it on a hard disk where you can say, `Christmas '97,' and see it right away."

But some companies, like TiVo, which makes personal video recorders, argue that people will not have one central storehouse for all their media but a variety of devices linked by a network. At last year's trade show, said Michael Ramsey, TiVo's chief executive, "we were pitching the idea of a hub that would be a central repository of all media in the home, but we have concluded that's not the right architecture."

People have already started collecting photos and music on their computers, and they do not want to move those onto a TiVo hub, he said. So TiVo's new service, a $99 software upgrade, simply grabs the music and photos from a computer and plays them on a stereo and a television.

"The convergence point is the home network," Mr. Ramsey said. "It facilitates the communication between devices so you can watch anything on anything."

TiVo's system also links two of its video recorders over a network so a viewer in a bedroom, say, could watch a program that was stored on a TiVo in the living room.

Continued
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