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It takes more than gizmos

Internet heavyweights usher an electronics era that's all about content.

By DAVE GUSSOW
Published January 9, 2006

	[AP photo]
	Google chief executive Larry Page wows CES participants with the company's expanding Internet reach, including video downloads.

LAS VEGAS - New guests dropped by the International Consumer Electronics Show last week, overshadowing the gadgets that usually play starring roles and even stealing the spotlight from the industry's heavy hitters.

Microsoft's Bill Gates gave his annual keynote. Sony chief executive Howard Stringer spoke, too. But neither could match Google co-founder Larry Page, who created the biggest buzz at the annual trade show that celebrates all things electronic.

Page's appearance set off all sorts of speculation about the Internet search engine's plans. But for the first time, his keynote along with one by Yahoo chairman and CEO Terry Semel gave two major Internet players prominent appearances at the show.

And it hints at a shift in focus over the coming years for the tech industry. The Internet has grown as a source of information, but it's poised to play an increasing role as a source for entertainment, from movies to TV to music.

What TV and radio were to the last century, Internet portals such as Google, Yahoo, AOL and MSN could be to this one.

Content, not gadgets, will rule.

"We've gotten beyond the device phase," said Stephen Baker, an analyst with the NPD Techworld research firm. "The devicemakers now understand and appreciate the fact that devices require content."

People need dazzling TV shows and movies to buy high-definition TVs, the coming high-definition digital video recorders and portable media players for entertainment anywhere. A number of major electronics companies have begun referring to "a high-definition lifestyle" as a selling point for their products.

For most of the show's history, traditional consumer electronics companies such as Sony and Panasonic dominated and the latest and greatest gadgets were front and center.

As digital technology began to expand beyond computers and into TVs, radios and other gadgets in the '90s, companies such as Microsoft, Intel and Dell entered the picture and began to take over. Now, it's the third phase, one that will be heavily influenced by content and the Internet.

It's not clear how this shift will affect gadgets, and certainly the industry's recent performance indicates it will take some time for it to come into focus.

The connected home? It's bogged down by devices that don't work together well, or at all,, while competing industry groups push different standards, leaving consumers confused.

More confusion is imminent. Toshiba said it will offer a high-definition DVD recorder in March for $499 using a technology called HD DVD. Other companies, such as Panasonic, say they'll have DVD recorders this year using the Blu-ray technology. There goes the simple DVD.

The computer has been hyped as the center of the home entertainment universe. But it's not necessarily a given. Bob Perry, an LG vice president, suggested that if companies put a hard drive in TVs, perhaps wireless connections so they can communicate with other devices, a computer might not be necessary.

But if you add those elements, is it a TV or a computer?

Elonex, a British company, displayed what looked like any 40-inch wide-screen TV. Still remarkably slim, it had a computer on the back, using Intel's new Viiv (rhymes with drive) technology that emphasizes home entertainment. It calls it an entertainment PC with a big screen.

"There's going to be an awful lot of different ways manufacturers can choose to go," Baker said. "In the long run, it's hard to see a particularly successful digital home environment without some computer impact."

Intel's drive to emphasize home entertainment also focused attention on the missing player in Las Vegas. Apple Computer, which holds its annual Macworld convention this week in San Francisco, will begin using Intel chips in its computers this year. With its huge success with the iPod, Apple's alliance with Intel could open more possibilities.

Yet Google owned last week, in part because it has a lot of money, it's willing to spend it and it has been so aggressive in rolling out new services.

"People are petrified by people who have a lot of money to burn," Baker said. "It can disrupt a lot of things."

Google and Yahoo were not the only newcomers to the trade show. The movie and recording industries, historically adversaries with the electronics industry over control of digital content, showed up. That prompted Gary Shapiro, chief executive of the host Consumer Electronics Association, to tell the Washington Post:

"Hell has frozen over."

- Dave Gussow can be reached at dgussow@sptimes.com or 727 445-4165.

[Last modified January 9, 2006, 08:17:42]