Panel Detail:

Wednesday, April 25, 2007
9:20 AM - 10:35 AM

Moderator:

Kevin Klowden, Managing Economist, Milken Institute

Attendees pack the session on home entertainment and computing trends, which focused on the next "must-have" product.

Todd Thibodeaux of Consumer Electronics Organization explained that most of the $3,500 that households pay each year on consumer products is actually money paid for services, and said that he sees innovative services as a good value proposition for consumers in the future.

Michael Warner of Quantum4D predicted that virtual reality-based applications will drive the innovation of tomorrow. These applications can range from games to business data visualization. And Shane Wall of Intel said that while it is hard to imagine all the applications that lie ahead, they will likely to be very personalized experiences driven by ubiquitous computing devices.

Silviu Moraru of Sumsung credited increased capacity of mobile devices as the main technology enabler for new services and applications. For instance, he explained, the fourth-generation (4G) wireless standard download speeds of 100Mbps (expected to debut around 2010) will dwarf the current 384 kbps 3G speeds available today. Intel is preparing for the ubiquitous computing future by developing chips and sensors at much smaller size and order of magnitude with UltraMobile PC technology.

Richard Stromback of Ecology Coatings reminded the panelists that in order to make these devices viable, they must be manufactured in cost-efficient and environmentally friendly ways. His company, he added, has recently invented a clean process for efficient and eco-friendly coating of many heterogeneous devices.

Asked about the challenges these changes are likely to bring for both consumers and innovators. Thibodeaux stressed that usability is becoming a major barrier to adoption of products, especially high-tech solutions. If you ask the consumer to define the next cool thing, you’d probably hear simply, "something that works." Too many gadgets flooding the market today are a result of "product splat -- throwing products at the wall and seeing what sticks," he said. Instead Thibodeaux recommended spending time and resources to help users integrate new products into their existing environments, such as providing integrated store displays, installation services and easy access to maintenance. Successful products, he added, are breakthrough in a clearly defined area, but complementary to products you already own.

As the number of devices expected to work together increases, interoperability becomes more important. Incompatible standards have been a major source of frustration to consumers. However, as Wall pointed out, proprietary standards provide vendors with competitive advantages without which they cannot gain enough market share to make money on R&D investments. Thibodeaux added that often technology leaders disagree about what the standard should be. Time is required to come to an agreement, but the market often does not want to wait; as a result, competing vendors adopt different open standards.

All the panelists agreed that digital rights management (DRM), as implemented today, is a major barrier to usability, interoperability and ultimately the adoption of innovative technologies. Wall noted that DRM is a "temporary phenomenon," necessary for studios to "get over their fears" of how to sell products. Now, as Apple has clearly demonstrated, consumers will buy music online if it is a simple process, even if there is still a way to download it illegally elsewhere. Moraru agreed that DRM is doing more harm than good. Among handhelds with WIFI capacity download songs, only 1 percent of consumers actually download songs. The major reason cited by consumers is that they feel restricted that the music they pay for can only be played on the phone and they want to control the content and be able to transfer it among all their digital devices.

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