As an IT consultant/network administrator a few years ago, one of my clients was a small but fast-growing retailer with several remote locations spread across the country.  Having no trusted technicians available in some of these cities, it was a clear win when I chose to go with WYSE thin client terminals on many of these remote seats (I wrote a bit about that here).   While the idea of such simple and lightweight “web appliances” dates back to the late 90’s, despite a few short stints as The Next Big Thing, the devices never proved quite as popular as promised - but conditions now are more favorable than ever:

• Increasing functionality in the cloud mitigates much of the need for heavy client-side application installations (and the RAM/processor power/data storage they require)
• The current global economic climate certainly favors less expensive (and often computationally redundant) devices

There’s a third (and crucial) factor, though: now that wireless internet access has become nearly ubiquitous, we all place an increasing premium on portability (consider that by most accounts, laptop sales actually surpassed desktop sales for the first time during 2008).  What do you get, then, when you take all the innate advantages of thin computing and add today’s need for mobile computing?

The “netbook” - a small (8″ or 10″ screen) laptop with a lightweight operating system, long battery life, (and often) solid state disk (SSD) storage.  As with good bread, the Beatles, and text messaging, it’s Europe that’s been out in front on this, but that’s expected to change as US acceptance of the netbook grows.  In fact, while industry analysts at Gartner expect overall 2009 PC sales to decline by almost 12% (a historic high), they see netbook sales doubling.

To date, the low-power Intel Atom has been the netbook CPU of choice, but AMD and Motorola have each recently released new processors of their own aimed at this growing market.   As for what operating system runs on those chips, for now it’s come down to a battle between Microsoft and the Linux community (Apple having not yet demonstrated much interest in this lower-end market).  Google’s Android cell phone operating system has even been ported over to a netbook - an interesting possible future platform for the open source OS.

Many of the first netbooks ran a specialized Linux kernel, a trend that only looked to gain more momentum once Microsoft stopped stopped selling XP last June.  However, with the netbook trend starting to pick up, Vista proving too resource-hungry for many desktops (let alone netbooks), and with Windows 7 still months away, Microsoft had a change of heart - and recently decided to bring back XP Home, giving the OS a second life as their unofficial interim netbook operating system (until Windows 7 arrives, that is).  It’s an easy decision to justify: while netbooks are by definition leaner and meaner than traditional PCs, users still expect them to be more than mere terminals: in other words, people like their applications (and chances are pretty good the ones they’re used to are not going to be available for Linux).   Furthermore, despite (or maybe because of) the fate Vista met in the marketplace, many users still like XP - and in any event, to a less technical user, that oh-so familiar Microsoft desktop would have to look more reassuring (and less toy-like) than a Linux desktop - even if only on a purely emotional level.  Lastly, even if Vista was able to run on a netbook, licensing costs for the new OS would tend to put the machine well beyond the price point of the average netbook.

So, not surprisingly, the decision paid off for Microsoft: XP Home lives on and has beaten Linux out to ship on the majority of netbooks now sold (in a telling sign, HP recently stopped even offering Linux netbooks in otherwise penguin-friendly Europe).

Either way, in addition to all the other advantages, at only $200 to $400 each, these devices (much like smart phones) are inexpensive enough to be subsidized by long-term internet service agreements - so going forward it’s hard to imagine a scenario in which netbooks do not figure in heavily.   Microsoft, for one, agrees, and is committed  to releasing a lightweight version of Windows 7 optimized for netbooks (despite the economics of the netbook market dictating substantially lower license fees than Redmond is used to charging).

I think there might be one in your future too.

I know I want one - so it’s got to be cool, right?

Televisions and set-top boxes with embedded network interfaces are coming, that much is agreed upon.  What’s up for discussion, though, is just what the user interface is going to look like - an “internet video-only” implementation that places a premium on simplicity and system stability, or a full-featured “browser for the couch” allowing full unrestricted access to the internet.

Gordon Campbell, a 30+ year veteran of the semiconductor design and marketing industry with stints at Honeywell, Motorola, Intel, and several start-ups under his belt, calls the former approach “hogwash.”   According to a recent article, his current company Personal Web Systems (no web site yet)) plans to bring a device to market later this year allowing full unrestricted access to the web (the company also has plans to subsequently offer that same functionality to CE manufacturers on a single chip).

“This generation doesn’t want their hands tied behind their backs. They want the same experience as with a PC (on their TV)“, Campbell states.

I think he is precisely wrong.

Television web browsing has been tried many times before, with little or no success - and although today’s increased broadband penetration and (more text-friendly) HD screen resolutions suggest perhaps it’s time again to make yet another pass at it, the bottom line is that average folks just do not want a lean-forward PC experience on their TV, thank you very much.  And even if they did, there would be user input device issues to solve (keyboard on your coffee table, anyone?), challenging security issues to deal with,  and (in contrast with computer users), zero tolerance for crashes and restarts.

I could go on and on - but in short, I feel it’s a mistake to assume that internet access necessarily dictates a full PC/web browser paradigm - for example, consider twitter, skype, IM, even iTunes - all examples of succesful non-browser/non-PC dependent internet applications, none of which “this generation” would consider “hogwash”.

Once you explain to them what the word “hogwash” means, that is.  

To sum up, the consumer electronics industry has discovered the internet - and these new devices are not going to need (or look anything like) a PC or a web browser.

For better or worse, the TCP/IP protocol (and the internet it makes possible) will not remain the exclusive turf of the computer industry for very much longer - a point some in the industry are slow to see.

The trend is unmistakable: the consumer electronics industry has discovered the internet, and activities that have until now always involved a “computer” (such as internet video viewing and mobile internet access) will be increasingly done using a new generation of leaner and meaner dedicated CE devices instead.  This is all well and good: arguably, the modern home computer – more flexible and powerful but also more complicated and (let’s face it) maintenance-intensive than ever – is clearly overkill for such activities.  But as the computer justifiably loses the battle to convince us it’s also a CE device, CE devices are in turn left to grapple with an issue of their own: how much and how best to emulate the computer.

I’m talking software deployment.  You buy a computer, it includes a license for an operating system, and you’re free to go and install whatever software (or malware) you want - in other words, “you buy it, you break it” (in a way, an inversion of the “Pottery Barn rule ” invoked by Colin Powell over the war in Iraq).  But what about a smartphone, or that internet-enabled television you’ll be buying within the next year or two?  While the availability of a rich selection of high quality 3rd party applications is in the best interest of both the device maker and the user, a wide open ”no guard-rails” software deployment policy is in both parties’ worst interest: poorly written applications can harm both the user  as well as the brand, and (news flash) the average home user is a lot less interested in taking on that kind of responsibility than many companies in the computer industry have ever really understood.

For their upcoming line of internet-enabled televisions, Yahoo/Intel have addressed the issue by going with a “widget” rather than “application” model: lightweight software running on a JavaScript engine rather than the OS itself.  Taking another approach, Apple (which in terms of revenue has been a CE company with a side business in computers for a while now) has come up with the iTunes App Store: applications for the iPhone (and likely for the Apple TV in the near future) are installed on the OS itself, but must be first vetted by (and subsequently purchased through) Apple.  This offers the best of both worlds: the developer base for the device is virtually unlimited, but nothing’s going to break, and apps are guaranteed to be secure.  In fact, the “app store” model is currently being imitated by other smartphone makers such as Nokia because it’s been so successful and popular with users.

Well, 98% of us, that is – there’s also a growing geek subculture out there that believes they have the right to do whatever they want to with something they’ve purchased, thank you very much – and they’re dedicated to removing the iPhone’s software restrictions - “jailbreaking”, as it’s called.  Although the practice is in direct violation of the iPhone EULA (software license agreement), it’s gotten so widespread now that a Google search of “jailbreak” and “iPhone” currently yields 3.6 million results -and so the two sides (the Electronic Frontier Foundation and Apple) are set to face off this spring.

Apparently, this dispute is subject to the Digital Millennium Copyright Act , originally meant to fight piracy of copyrighted “works” such as film and music – therefore, it will ultimately fall upon those famously tech-savvy folks at the Library of Congress to decide the issue.  A case can be made for either side – but although I have to admit I’d love the ability to put my iPhone on a network that covers the NYC metro area better than AT&T , I tend to side with Apple on this one – not only because I feel the iPhone EULA puts them on a pretty strong legal footing, but also because I feel that it’s “good and right” to treat software for CE devices differently than software for computers.

One thing is for certain, though – just as developers will continue to write great App Store applications for Apple, others will continue to hack open the system.  What’s unknown is whether Apple go to the length of actually suing users – a tactic that didn’t work very well for the RIAA .

Back from CES - the annual Consumer Electronics love fest in Las Vegas,  (OK, I am a bit late posting this) - I am actually pretty psyched about what’s coming down the consumer electronics pike this year.

As CE devices get faster, smarter, and increasingly untethered, the “on-your-terms” digital lifestyle proposition pitched to us for all these years seems a considerable step closer to its “anywhere, anytime” goal.

Yet, despite years of impressive CES innovation hoopla, I continue grappling with a personal observation I lovingly coined the “Star Trek bottleneck”:

CE designers’ propensity for innovation seems directly proportional to their lifetime exposure to, yup, you guessed it - the popular Starship Enterprise television series.

OK, I am kidding. But as with any good joke, there’s some truth to it.

To stick with the Star Trek analogy - short of time travel and “beam me up Scotty” - is there anything in CE land that Captain Kirk and his crew didn’t have that’s not readily available to us in stores today?

There’s the wireless video monitor and the wrist-band smart phone, plus the super-smart refrigerator, remote home security, and a growing number of cute gadgets.

All set in slick form factor, of course, all with build-in intelligence processing more information ever faster. Good ol’ Gene would have been proud.

In other words, it’s as if this past-century icon of sci-fi television continues to haunt our 21st century CE designers to this day.

Of course, I have no empirical data, no scientific studies. Just a pretty good hunch, mixed in with a healthy dose of cynicism, about why today’s CE industry seems unable to think more innovatively about, well about innovation itself.

Maybe it needs a new and decidedly young(er) generation of CE designers to get us beyond my “Star Trek bottleneck” dilemma? One void of stylized sci-fi TV exposure and implicit 60ies and 70ies ideas of what innovation should be.

But than again, no matter what any new group of CE designer may come up with, it still needs to stay sufficiently functional and attractive to consumers, right, or it simply won’t sell?

So, maybe it’s not just about passing the CE design torch on to the next generation, but also about our own limitation as consumers to desire (and then use) something entirely different from what we collectively perceive as “innovative” today? 

So where might we be heading next?

My guess on this, next-gen CE devices will focus on software rather than hardware, and regard bolstering quality-of-life as a key goal.

That next evolutionary step in consumer electronics might then have less to do with form factor (that’s largely covered ;-), and much more with adding previously unavailable intelligence inside and outside existing hardware concepts.

The key driver - and blocker at the same time? Our collective ability to imagine beyond the obvious.

Any of this probably not for CES 2010. But hey, let’s see what CES 2020 will bring.

It was almost two years ago now that Apple dropped the ‘Computer’ from its corporate name, reflecting the company’s growing presence in the consumer electronics space.  We believe the next iPod-like disruptive CE devices will be an completely new generation of network-enabled TV and set-top hardware offering direct and simple access to internet video ‘baked-in’ - and we believe some compelling implementations are right around the corner.

Meanwhile, consider an exchange from a panel at last week’s ‘Future of Television East‘ conference in NY: asked whether the emergence of such hardware would have much impact on the (currently computer-centric) internet video space, a panel member representing a major software firm essentially reduced the issue to that of merely a difference in user interface ergonomics  - keyboard/mouse vs. remote.  To paraphrase the panel member, “the user will get to the content whatever way the user gets to the content” - but yet minutes later, this same panel member was admitting that user uptake of their internet video TV technology was “not happening as quickly as we’d all like to see”.

Why is that?  Well, if a company’s solution to the problem of getting video from the internet to the TV involves putting a personal computer between the television and the internet and administering it all from the desktop rather than from the couch, they are just not going to see much uptake from Joe the Plumber – instead, the average user will wait for a ‘lean back’ solution to become available, saving him or her from having to get up and touch the computer at all.  Although this is precisely the point at which we currently find ourselves, we don’t see the situation lasting very much longer - again, we believe internet–enabled TV hardware will be the big story of 2009 (one of the issues that’s kept this from happening so far is the development of a useable motion/pointer remote, but that’s on its way too - more on that here).

Clearly, there are major ease-of-use differences between the personal computer/media server internet TV model and the (as yet unavailable) embedded hardware internet TV model - in terms of set-up, user experience, and maintenance.  But while the various software incumbents might have a stake in downplaying these differences, they fail to recognize the inevitability of standalone internet video devices at their own peril – because this new generation of hardware will also require a new generation of lightweight system software and highly efficient video codecs/players (a potentially substantial new market).  Furthermore, to the extent internet-enabled TV and set-top hardware is successful in the broader mass market, a new user application market could also emerge for these ‘quasi-computers’ (Apple’s App Store is a good example of an appropriately simple and elegant approach to distribution and administration for such an entirely new software model).

Amazon has an industry-leading online retail business to support its ‘Video on Demand’ internet video initiative. Netflix has an industry-leading DVD rental business to support its ‘Watch Instantly’ internet video initiative.  The iTunes video service?  Apple is, well, Apple.   And Movielink is owned (and supported) by Blockbuster.  Alone among the major video services, relative old-timer CinemaNow was out there by itself in the still very nascent long-form premium content internet video space.

Until yesterday.

As Sonic Solutions’ Chief Technologist Jim Taylor was sitting on a Future of Television East panel here in New York yesterday, his company was announcing the acquisition of CinemaNow.   Known for the Roxio DVD authoring software, Sonic had recently chosen CinemaNow as the storefront service partner for their Qflix DVD-burning system (CinemaNow’s other main partner to date is HP, which offers direct access to CinemaNow from their MediaSmart line of HD TVs and Connect set-top box - in fact, both ship with $20 CinemaNow coupons).

Since we believe the next phase of internet video will be about long-form premium content accessed directly from dedicated  network-enabled CE hardware, we were particularly interested to read Sonic Solutions’ CEO David Cook’s take on the move:  “With broadband-connected consumer electronics hitting the market in ever greater numbers, there is a growing need for a service that gives consumers one-click access to premium entertainment on any device in the digital home.  The combination of CinemaNow’s content and embedded device strategy with Sonic’s technical prowess and broad PC and CE distribution promises to fulfill CinemaNow’s original mission.”

A smart move for Sonic Solutions…  unlike the current Qflix system (which requires a PC), look for a combined Sonic/CinemaNow to offer Qflix-enabled hardware with embedded access to CinemaNow - no computer needed.   Such a device could compare very favorably to an AppleTV or Amazon/TiVo solution.

I’ve long been of the opinion that longer-form (professionally produced) internet video will happen on a truly widespread scale only when the problem of getting that content over to the television is solved – and that current discussion of internet video (and how to how to best monetize it) is often based on two questionable premises:

1. The personal computer will continue to be the primary internet video delivery device.
2. Internet video is necessarily about short- and mid-form content.

Such discussions often completely fail to adequately recognize how profoundly game-changing direct access to the internet from the next generation of TVs and set-top boxes will be.  In other words, while short form internet video (user-generated or otherwise) will always be a workplace diversion, the main event has not happened yet - we’re still in merely a transitional, evolutionary phase of the process - a process which will end at the couch, not the desk.

Where are we now?   Several major CE manufacturers are already offering a first generation of standalone internet-enabled devices (each partnered with one or more internet video services):

Hardware:                                Service:

• Sony Bravia, PS3               Sony Playstation Network, Amazon on Demand
• Roku                                   Netflix, more to come…
• LG                                      Netflix, more to come…
• AppleTV                             iTunes
• TiVo                                   Amazon, Netflix
• HP MediaSmart                  CinemaNow, including others
• Microsoft xBox360            xBox Live Marketplace, Netflix

The problem with the above scenario is that no computer means no web browser, which in turn means no Flash – so each OEM wishing to offer multiple services directly via their network interface-enabled hardware (TV, DVD, PCR or set-top box) has had to implement the interface to each service partner individually – a tremendously inefficient reinventing of the wheel.

Therefore, I’ve long felt that what’s needed is a standardized technical protocol for CE hardware to interface with these multiple video services.  Last week, Reed Hastings of Neflix expressed a similar view, noting that in the absence of standardization, “Everyone’s going to have to do customer interfaces for each device”, and further, that it’s “slowing down the market tremendously.”

While the web standards we now take for granted were developed in the shelter of academic and government agency environments, there’s a huge amount of money (and an equal amount of competing agendas) at stake in the internet video space – so the development of a new standard from the ground up at this point seems highly unlikely.  Instead, an embedded web browser running Flash (and/or Microsoft’s Silverlight) sounds like the better idea (Sony has already moved in this direction, embedding the highly-regarded Opera browser into its Bravia line of network-enabled TVs).

Admittedly, though, web on the TV leaves a bad taste in the mouth – previous attempts suffered from three major issues:

• Bandwidth
• Screen resolution
• User interface

Of these three, two are already solved: most broadband connections are now capable of streaming at least SD video, and increased resolution of HD TV makes web text quite readable. The third issue alone remains: the user interface.  Recognizing this, Hastings predicts a new generation of Nintendo Wii-like pointer/motion remotes to replace the primitive up/down/left/right arrows (and four dozen other never-used buttons) on today’s remotes (interestingly, Apple has recently filed for a patent on some technology for just such a device).

Look for this to be the big story at the CES show this January…

When talk turns to video distribution over the internet, I’m always amazed that the issue of physically bridging that last yard or two from the home internet connection behind the computer to the television in front of the coffee table isn’t discussed more.

At last week’s Digital Hollywood show in LA, the majority of panels were about how to better monetize the video currently being streamed to the web browser (understandable, given the current economic climate).  The basic problem is that while the CPM rates that web video publishers can charge advertisers run several times higher than what traditional broadcasters can get away with charging, online viewers will tolerate only a small fraction of the amount of advertising that traditional broadcast and cable television viewers will put up with (imagine how well a traditional two minute commercial break would work on Hulu…).

To me, the issue is fairly clear –

• Only longer-form programming (lasting a half-hour or more) will support higher advertising density and attract more mainstream brands.
• Ales’ Theorem: The willingness of the viewer to sit alone at a desk or in front of a laptop is inversely proportional to the length of the programming.
• Therefore, a truly sustainable internet video business model relies on solving the physical problem of getting that content onto the television.

In other words, to paraphrase Gil Scott Heron: The Revolution Will Be Televised

…look for some big announcements at CES in January.