Out of the Box

At Technologizer, Harry McCracken, again showing that he is the king of context when it comes to tech blogging, cleverly compares Cisco’s acquisition of Pure Digital and the almost fatal acquisition of Palm Computing by US Robotics shortly before USR’s own purchase by 3Com. I’d argue that in some ways there was more obvious synergy between a networking company and Palm, which would eventually morph into a smartphone company, and Cisco/Pure Digital. Clearly Cisco is striving to establish its brand in the consumer market, and the relatively inexpensive Flip gives it a means of low-priced video acquisition on which to stamp its bridge logo and feed its new NAS (that seems to have a bigger LCD than the Flip!).

This is an interesting time for the category as we are clearly starting to see more blurring between these low-cost flash-based units that have traditionally sold for less than $200 and higher-end flash camcorders that have traditionally sold for more than $500, but that is to be expected as the future of the camcorder is undoubtedly flash memory. For example, while the Flip and the Kodak Zi6 lack an optical zoom, the new Sony Webbie has a 5x optical zoom. As these large-scale manufacturers companies take better advantage of the lower price and smaller size that flash memory increasingly makes easier to enable, Pure Digital may have timed its exit perfectly

Pure Digital originally sought to use disposable camcorders to drive a DVD processing business for drug stores and mass merchants. It may be a good example of what a company can gain when its products become targets for hackers, who had found a way to get video from its original products. This may have helped the company understand the potential for an inexpensive camcorder aimed at moms first and YouTubers (who understand more options for capturing video) second. There are certainly some Apple-like aspects to its products’ designs – minimalism, simplicity, and integrated software, and smallness. (However,  I think an Apple camcorder would either have a much larger screen or no screen at all (mino shuffle).

What would Cisco do with the Flip products? Adding Wi-Fi would be a logical next step to get around the buzz-killing upload process.  Flip technology could also be leveraged in home monitoring cameras, a market to which Avaak has brought rejuvenated interest. And of course, Cisco owns what was once Scientific Atlanta, so your future cable set-top box might be a platform for videoconferencing as well. Reflecting the increasing blurriness of the category, I’d also expect Cisco to push upstream with higher recording capacity (one of my biggest gripes about the Flip) and optical zoom although I would not expect it to vie with the flagship models from Sony, Canon and Panasonic. The challenge would be to manage all this iPod touch-like platform magic with iPod shuffle-like simplicity, otherwise the mino would be lost. (The mino would be lost.)

There’s also a diamond in the rough in FlipShare, Pure Digital’s revamped video organization software that has potential to be the iPhoto of video, but right now lacks critical features like being able to import videos from sources other than a Flip camcorder (such as the hard drive)..

I agree with almost all the points that Rick Clancy makes as he places his bet that Blu-ray discs will be around for far greater than five years. That said, I actually think few in the industry would disagree with that. The question I’ve been asked more often is how long will Blu-ray grow, especially compared to the decade or so of growth that DVD saw, and how deep will its penetration reach, at least in the U.S..

Compared to the near monopoly that DVD had as a format for selling movies, Blu-ray will face more competition, including stronger legacy competition in the DVD. However, barring any breakthroughs such as DECE changing the nature of downloads, Blu-ray will continue to offer a superior convenience factor for movie buying.. (As for rentals, digital distribution may make inroads there more quickly.) Therefore, I think that Blu-ray will grow for more than the next five years, and see it starting to peter out in about seven or eight years.

Just a few days after my Switched On.column on musical mashups in which  I talked about the possibilities of combining the Cerulean TX+RX with the EOS Wireless multi-room system, Gizmodo reports that Sony has introduced its own multi-room iPod dock, joining EOS Wireless and Klipsch. Unlike the EOS satellite speakers (which include a modest downward-firing subwoofer), the Sony satellite speakers offer remote control over iPod playback yet the system is priced competitively with the EOS Wireless speakers. A $400 kit will include the dock (which includes AV out but no speakers) and two external speakers, pegging the price of the main dock at about $240.

Also, like the EOS Wireless system, there does not appear to be a way to control the playback volume of satellite speakers from the main dock. Perhaps that would be possible, though, with an iPod touch application. While none of these products offer the flexibility or sophistication of Sonos, they are much simpler to set up than Wi-Fi-based systems and represent a great opportunity to make multi-room music more approachable.

The sudden momentum we’re seeing toward scrapping Wi-Fi for multi-room music has to have the folks at Logitech scratching their heads. The company entered the multi-room music market with products like the Wireless PC Music System and Wireless DJ that used a similar 2.4 GHz scheme. Both were part of its “Music Anywhere” system that Logitech promoted as “a better wireless solution with plug-and-play simplicity, digital audio clarity, and no home network required.” But that went out the window when the company acquired Slim Devices and its Wi-Fi-based Squeezebox.

It’s no surprise that Sony charging $50 to remove trialware from its PCs has gone over like a lead ultraportable. Sony is merely passing along the lost revenue from deals it would ordinarily strike with these providers of software and services. Still, making the tradeoff so explicit is tantamount to admitting that, not only is there no user benefit to these programs, but there is a price on the penalty of having them.

Also, one must question how receptive consumers will be to offers that they absolutely did not want on their PCs, but for which they didn’t want to pay the equivalent of five percent or more of the notebook value. Even at a lower price ($20), Sony would gather far more consumers opting in. It is a thorny time for trialware with Vista’s beefier requirements already making consumers more wary of performance slowdowns. And ultimately, it is in Sony’s interest to have more consumers who are delighted with their notebook experience. Competitive pressure may force its hand toward that.

Update: Reversed. Blogosphere outrage FTW!

In speaking with several reporters about the victory, I noted NPD’s research last year that found satisfaction with existing DVD players to be a more common reason for abstaining from the high-definition disc market than the format war with HD-DVD. As digital media gadfly and PR veteran par excellence Andy Marken notes, “The difference is now the BD folks won’t be able to blame Toshiba for holding back the success of high def disc sales.”

Blu-ray was the second must-win AV standards war after LCD vs. plasma that the company has won in the past few years by leveraging selective specification superiority — curious for the consumer electronics company that is so frequently identified with being a lifestyle brand. Blu-ray’s main technical difference vs. HD-DVD was that it offered 50 GB per disc as opposed to 30 GB.

Sony and the BDA didn’t make the capacity argument directly to consumers as much to the trade media, particularly before studio support became more relevant. However, Sony was the first company to proselytize 1080p or “full HD” to consumers, which has helped to give large-screen LCD the upper hand.

Further momentum behind BD can only help promote 1080p TVs (not that they seem to need much help). It will also be very interesting to see how much the standardization of Blu-ray now helps sell the PS3 after the PS3 was kind enough to do the same for Blu-ray since 2006. Sony’s content holdings may not have been enough to overcome the challenges of UMD as a movie format, but the virtually guaranteed support of Blu-ray by Sony Pictures was a validation of Sony’s integration of hardware and content. Of course, the equal loyalty of Disney and Fox was critical as well.