If You Build It, They Will Video Phone

Monday December 19, 2011 – Stewart Wolpin

In the future, all TVs…

RING! RING!

Oh, could you hold on a second? My TV is ringing.

As I was saying (sorry, it was someone taking an opinion poll), in the future, all TVs will be equipped with Web cams and microphones and will become our major home telecommunications device. I'm no Nostradamus, Criswell or even Punxsutawney Phil, nor do I have to be. It's going to happen.

What, you, say? It's already happening? No, not really. Yes, LG, Panasonic, Samsung, Sony, Toshiba and Vizio all sell HDTVs to which you can attach a separate Webcam/microphone/processor array to turn the TV into a phone.

But asking consumers to buy a $2,000-plus TV PLUS another $150-$300 to buy an attachment box is an incredibly dumb way to move us to the video phone future.

What gnaws at me like the waste of unrealized potential is that these same TV makers have the answer right in front of them – build the damn Web cam and its processing guts into the bezel.

Will this make the TV more expensive? Yup. So you do what gadget makers have done for decades: you build this slightly expensive new feature into the top-of-the-line models. Then, as time goes on and people start buying them, economies of scale let you start building it into increasingly less expensive HDTVs.

This isn't rocket science nor is it news. HDTV execs I've spoken to know building a webcam into the TV is the right thing to do. They've seen what happened in the PC business – a few desktop PCs had built-in Web cams, then a few more, then a few laptops had 'em… Now ALL desktops and laptops have built in Web cams and mics, and when they built it, we came, and lots of other capabilities became possible.

HDTV makers are setting themselves up for a crash. As we're all sitting here, a certain fruit-named company is readying an HDTV that sure as shucks will have a built-in video telephony capabilities that can communicate with millions of the single most popular smartphone on the planet and the single most popular tablet on the planet. Maybe this fruity company's HDTV with a built-in Web cam (and who knows what else) will carry a premium price and therefore won't pose real competition in the HDTV space – but this kind of willful blindness has been the ruin of many of the cocky who have gone before.

I hope I see some HDTV makers with webcam-equipped sets at CES, I really do. It'll be good for them to gird them against the PC-like smart HDTV coming (and so their boob tube wares don't look so archaic when it does), and good for those of us who'd like to answer the phone with our TV remote control. I hope I will, but I doubt I will.

Viva Vita?

Viva Vita?

Monday November 12, 2011 – Stewart Wolpin

As the residents of Rock Ridge prepared to evacuate their small town ahead of the invasion by an outlaw horde organized by Hedy ("that's HED-ley") Lamarr, Sheriff Bart confronted leading citizen Howard Johnson.

"Can't you see," Sheriff Bart pleaded, "that this is the last act of a desperate man!"

Replied Mr. Johnson, "I don't care if it's the first act of Henry the Fifth! We're leaving!"

I thought of this scene from Blazing Saddles when getting a hands-on demo of the upcoming Sony Vita, the company's successor to the seven-year-old (a century in tech years) PlayStation Portable (PSP) and what could be Sony's – or anybody's – last desperate act to sell a dedicated handheld gaming device.

If Vita proves vital, it'll be because hardcore gamers still bring enough of the juice to slow a powerful trend – the explosive growth and sudden dominance of smartphone-based gaming.

The numerical advantage smartphones have in the gaming arena -- Android and iOS game downloads are measured in the billions, while dedicated disc-based game sales are measured in the millions -- is daunting. Are the casual smartphone gamers eating into the dedicated portable video game market? It seems reasonable to conclude that some folks who may have dabbled with a PSP in the past will forego the dedicated portable device, especially if they are only casual gamers. But, will the smartphone category eat into the hardcore gamer market?

So the question for Sony is, when Vita goes on sale February 22, will consumers buy a dedicated game player for $250 (Wi-Fi) only or $300 (Wi-Fi+3G) when they can buy a packed smartphone for the same price or less?

Dedicated vs. All-Purpose

This same dedicated device vs. smartphone scenario is being played out in both the portable navigation device (PND) and digital camera markets. In all three cases, dedicated device manufacturers are burning the midnight LEDs to come up with specialized functions and features not found on smartphones just to keep themselves in the consumer choice conversation.

As such, Vita promises a far richer and powerful gaming experience than smartphones and far richer than any previous portable game player.

Aside from duplicating a smartphone's magnetometer, gyroscope and accelerometer, similar wireless network connectivity capabilities for downloading content and communicating with fellow players, Vita adds quad core processing for more sophisticated game play, a rear touch control surface for extra features, dual joysticks – a portable first, handheld-to-PS3 (and back) Cross Play and Cross Save game transfer, the capability to add your avatar to a game character, geocaching of digital objects, and Near – the ability to detect fellow players within several kilometers to engage in multi-player game orgies, all on a five-inch screen.

These all add up to a unique portable gaming experience unequaled on a smartphone.

But the question is:

Who cares?

Vita is saddled with a couple of groaners. Vita's got no built-in memory. It requires a new proprietary micro SD-like memory card called, cleverly, "removable memory." Proprietary for security reasons, says Sony; proprietary my butt will say consumers. And Vita doesn't come with even a 4 GB card pre-installed to get you started. Hope someone tells each customer before they get home with a game machine they can't download games to.

To Cross Play and Cross Save, consumers will be forced to buy two versions of the same game, one for PS3, one for Vita. There is an internal Sony discussion to provide both PS3 and Vita versions in a discounted bundle, but – with apologies to Seth Meyers – really? Forced to buy two full-priced copies to play the same game? Really? Ever hear of Blu-ray's "digital copy"? Really?

Vita will play all previous PSP games, but there are only 15 Vita-specific games right now, with the promised "more to be announced at CES." Tens of great Vita games to choose from priced likely at tens of dollars from vs. a quarter million decent time-killing games on Android and iOS to choose from priced at tens of cents – or nothing?

These may be niggling hiccups to high-end gamers drooling at Vita's prospects for compelling portable play. But millions of smartphone owners are apt to shrug their shoulders and be satisfied to simply sling fuming fowl at egg-stealing swine – or just slide simple solitaire – on their smartphone.

As such, Sony will likely settle for a dedicated D-SLR-like specialty high-end gamer demographic to support Vita – since that's likely the only demographic Vita is likely to attract. Given the speed at which smartphone screen size is increasing and processing power is progressing, Vita may be anyone's last dedicated portable gaming act.

AVC Products Forecast Overview

Monday November 28, 2011 – Jing Sui

With more efficient coding and higher-quality play back, MPEG-4 AVC has expanded into every consumer digital video category going far beyond the ubiquitous MPEG-2 standard. The AVC market continues to exhibit notable growth and a majority of the product categories are experiencing growth.

DTC’s latest data narrates the trends of categories including AVC consumer electronic products, set-top boxes (STBs), mobile devices, PC and PC related products. Among AVC consumer electronics product families, integrated digital TVs (IDTVs) anticipate double-digit growth rates and experiencing the greatest compound annual growth rate throughout the forecast period. STBs are projected to have shipments of over 140 million units in 2012. Shipments of MPEG-4 AVC mobile handsets, due in part to the popularity of smartphones and high-end media handsets, are expected to grow to over 1 billion in 2016. Other AVC CE products, such as Blu-ray disc devices and video game consoles, are also consistently seeing healthy growth throughout the forecast period.

What Business Are Amazon and Barnes & Noble In?

Monday November 21, 2011 – Stewart Wolpin

This seems to be color LCD e-reader week, what with Amazon's Kindle Fire and Nook's Tablet charging into both online and retail shops within days of each other.

What is difficult to suss out is what business Amazon and Barnes & Noble think they're in – the content business or the device business?

Or, perhaps more importantly, is either company in the business of making money?

It looks as if Amazon is leaning toward being in the content business but, harkening back to its early days, not making money. Priced at $199, each Fire sold will reportedly lose Amazon $50.

Amazon figures it'll make up the difference on its content cornucopia – e-books (duh), magazines, movies, music, et al. After all, buyers will want to fuel their Fires.

It's harder to discern B&N's content v. hardware focus, though.

B&N's challenge

Barnes & Noble must think it's in the gadget business since it's selling the Nook Tablet for $50 more than the Fire, assumedly to make a profit on the hardware (or at least break even).

B&N's pricing makes sense on the surface, since the bookseller lacks the multimedia content to offset a lower tablet price as Amazon does.

Of course, B&N can't discuss its content deficiencies compared to Amazon. Instead, it will attempt to justify its higher price by stressing Nook Tablet's technical advantages – it has twice as much RAM (1 GB for Nook vs. 512 MB for Fire) and twice as much flash memory (16 GB vs. 8 GB) as Fire, plus a MicroSD card slot.

E-reader consumers, however, are unlikely to look past the price, especially since all purchased content from both book sellers can live in the cloud, and they perceive they don't need a lot of digital storage space for books.

And that's not even considering the insulting new price on the original Nook Color. The gleaming new Fire for $199, or B&N's old, clunky POS that's already been replaced for the same $199? Ooh, there's a decision!

With this ridiculous $199≠$199 price equation staring them in the face, consumers will need to be blown away by something wondrous on the Nook Tablet to justify spending an extra $50 – and they won't be. Consumers will project the poor value proposition of the over-priced old Nook Color onto the new Nook Tablet since the two are essentially twins, a similarity made more stark since they'll likely be placed in close proximity to each other in B&N stores.

In fact, it'll be the Fire that blows consumers away, thanks to its fiery moniker, its sleeker looks and its revolutionary lickety-split-loading Silk Web browser.

A different approach?

What puzzles me, considering the uphill device and pricing scenario it created for itself, why B&N didn't attempt a radical pricing approach.

What about a subsidized pricing model such as the old book and record clubs – you know, four books for $1, 12 record albums (ah, remember records?) for a penny (plus the hidden 13th), as long as you bought lots of books/records over the next year or two.

Imagine how Nook Tablet would sell if it were priced at, say, $149 (and blew out the old Nook Color at $99), and how many e-books it would subsequently sell. At $249, B&N risks losing the gains it made vs. Amazon with its only-LCD-e-reader game-in-town Nook Color, and losing the e-book battle.

Of course, both booksellers realize they are not just competing against each other. They also are competing against Apple, which suffers none of Amazon's or B&N's hardware pricing problems or content vs. hardware business schizophrenia.

This may be LCD e-reader week, but it's going to be a fascinating LCD e-reader fourth quarter.

What TV Could Be (If Steve Jobs Had His Way)

Monday November 14, 2011 – Greg Scoblete

In Walter Isaacson’s widely cited biography of Steve Jobs, we learn that Jobs “never put profits ahead of products.” Such was his devotion to making an insanely great consumer experience that he was willing to shun Business 101 in his pursuit of perfection. At least, that’s the myth. In reality it sounds just a wee bit self-serving, like an artist declaring that they would never value material success at the expense of their “art” only after they’ve become a blockbuster success and no longer subsist on mac-and-cheese.

However many grains of salt you want to sprinkle on the “products before profits” ethos, it’s pretty clear that whatever’s driving the pay TV industry, it's often the inverse of Jobs' mantra. The end-user’s experience - what they can watch, where they can watch, how they watch, etc. - is not a thing of beauty. What's frustrating for many observers is that it could be.

If technology had its way, our pay TV universe would look considerably different. For instance: you wouldn't have channels. Instead, you'd have apps. No more asking yourself, in the wee hours of the night, what's on channel 7,334. Instead, you'd navigate a sleek UI to find your app of choice.

Once you're in the app, you could choose from a linear offering (particularly useful in the sports world) or from a video-on-demand catalog. The app model provides the content provider with a wealth of opportunities to integrate more interactive content, contests, games and social interaction. Content owners would naturally charge a subscription fee for an app, but consumers could pick-and-choose only the apps they wanted instead of being saddled with content they're indifferent to.

These apps could be hosted on a "smart TV" or, more likely, a wireless home gateway capable of streaming to additional thin clients attached to televisions around the home.

None of the above is terribly high-tech. With technologies like Adaptive Bit Rate Streaming making Internet-delivered video ever more enjoyable to the end-user, it could be done tomorrow. It's the business models that don't work. Profits are trumping products.

But it needn't necessarily be so. Selling bandwidth into the home can be profitable. At the recent Telco TV show, many small and rural service providers without a video offering were taking a keen look at over the top video delivered over their broadband network as an easier entre into the triple play.

Even established service providers might eventually grow weary of the retransmission battles and black-outs. The future is out there. We just need to think different.

How Smart is the Perfect Smart TV?

Monday November 7, 2011 – Stewart Wolpin

Most high-end TVs have an Ethernet port for access to online content. But does that make them “smart?” As I see it, there are five components for TV manufacturers to cover to successfully conquer the evolving digital TV business:

• Hardware

• Software

• Content

• Search

Let’s use the rumored Apple television that could go on sale as soon as the 2012 holiday season or, according to a flurry of more recent reports, 2013 as our example.

Hardware-wise, guessing what an Apple television would look and act like physically and technically is as difficult as predicting who's going to be the Democratic presidential nominee in 2012 – it'd be a giant iMac with all the appropriate media slot and external connections.

On the software side, any well-designed smart TV will have a stable operating system, easy access to storage (be it in hardware or in the cloud) a way to distribute content to other devices inside and outside the home, and a way for consumers to use a QWERTY keyboard (be it hard or soft or touch) to interact with the TV.

And, a programming guide will need a major makeover which will include search abilities presented in a unique way. Apple will presumably have a new EPG co-developed with Rovi (Apple signed a deal with about a year ago). This is what Google TV tried but failed (so far) to do.

And for the final interface trick – since we’re basically writing a wish list here – let’s have a voice activation application. Well, a bug free voice activation application.

That leaves content.

How do we watch?

The way in which viewers consume content has been evolving over the past dozen years as viewers time shift with DVRs, and watch TV shows and movies on their computers and through their streaming devices.

Now that we viewers have more freedom to cherry pick the programming we want to watch when and where we please, there is more pressure on pay TV and broadcast networks to provide more flexibility for viewers. There’s also more pressure for them to make it easier for us to source programming from multiple places. To do that we’ll need an intuitive and well-designed program guide so that current channel-centric TV search capabilities, which are like looking for a person's name in a phone book arranged only by address, are a thing of the past.

In order to keep customers, pay TV providers will have to accommodate new ways of viewing, sourcing and displaying content. That will probably mean a little less content bundling and a little more à la carte action.

The iPad Effect

And content providers (and some pay TV providers) seem willing to give a little more à la carte a try.

The red-hot tablet market (mostly iPad) has every content provider rushing to create an app filled with its programs. And, of course, there are already a variety of programming sources that deliver à la carte programs from the Internet -- Amazon Prime, Netflix, Hulu, and iTunes. Perhaps traditional distributors of programming finally realize the à la carte programming future is tailgating them.

The combination of a thoroughly well designed smart TV (we’re not there yet), seamless programming guides across multiple programming sources, and wireless access of programming by multiple devices could usher in new business models and a whole new definition of what it means to “watch TV.”

Over Connected?

Monday October 31, 2011 - Jing Sui

If there’s any doubt that the consumer electronics industry doesn’t understand the importance of content delivery via the internet, take a look at the number of connected devices shipping over the next few years. Over 111 million living room-centric connected devices (including game consoles, Blu-ray Disc players and connected TVs) will ship in 2012. The number of these devices shipping will experience a 50% increase between 2012 and 2014, and almost double between 2012 and 2016.

In addition to Blu-ray Disc players, game consoles and connected TVs, tablets and smartphones are already streaming video direct to consumers (many while sitting in their living rooms), and many pay TV suppliers are specifying Ethernet ports in the next generation of set-top boxes.

Soon your entire living room will be full of connected devices. But is it necessary to include an Internet connection in every consumer electronics device? Are consumers really going to use all of these connections? We suspect that there may be some consolidation in living-room connected devices in the near future, but for now it looks as if few consumers will be without a connection….or two, or three, or more.

Over Connected?

Monday October 31, 2011

If there’s any doubt that the consumer electronics industry doesn’t understand the importance of content delivery via the internet, take a look at the number of connected devices shipping over the next few years. Over 111 million living room-centric connected devices (including game consoles, Blu-ray Disc players and connected TVs) will ship in 2012. The number of these devices shipping will experience a 50% increase between 2012 and 2014, and almost double between 2012 and 2016.

In addition to Blu-ray Disc players, game consoles and connected TVs, tablets and smartphones are already streaming video direct to consumers (many while sitting in their living rooms), and many pay TV suppliers are specifying Ethernet ports in the next generation of set-top boxes.

Soon your entire living room will be full of connected devices. But is it necessary to include an Internet connection in every consumer electronics device? Are consumers really going to use all of these connections? We suspect that there may be some consolidation in living-room connected devices in the near future, but for now it looks as if few consumers will be without a connection….or two, or three, or more.

Smartphone Wars: The Empire(s) Strike Back

Monday October 24, 2011 – Stewart Wolpin

This has been one wacky and wild week for smartphones, lots of fun if you're an analyst or tech pundit, not so much fun for consumers trying to make heads or tails of this sudden series of one-upmanship announcements.

Earlier this month, Samsung fired the first shot with its three Galaxy S II models, two versions sporting a 4.52-inch screen and the T-Mobile edition humming on a 1.5 GHz dual core engine.

BOOM!

Late last week, in case you missed the news, Apple unleashed the iPhone 4S starring Siri, the voice-controlled comedienne…er, personal assistant.

WHAM!

Then this past Tuesday, Motorola smacked down with its skinny 7.1mm thin Droid RAZR that supplies 12.5 hours of talk time.

SMACK!

Almost simultaneously, beleaguered BlackBerry quietly announced BlackBerry BBX, its long-awaited one-OS-to-rule-them-all (all being BlackBerry smartphones and the Playbook tablet).

SHHH!

At around the same time during Apple's quarterly briefing, CEO Tim Cook noted the company had sold "just" 17.07 iPhones in its fiscal Q4 compared to 20.3 million in Q3.

DAMN!

But then we heard a record 4 million 4Ss had been sold in the phone's first weekend of availability.

SLAM!

Tuesday night/Wednesday morning (depending on which side of the international date line you were on) in Hong Kong, Samsung swung back with its Galaxy Nexus with a 4.65-inch screen and the first smart phone running Android 4.0 Ice Cream Sandwich.

SWEET!

At around the same time (again, I'm getting a headache about relative time in Hong Kong, New York and London), Microsoft CEO Steve Ballmer confirmed new Windows Phone 7.5 "Mango" phones would be coming from Nokia next week. This follows up last month's announcement of the Samsung Focus S and Focus Flash Windows Phone 7.5 phones.

THWAK!

The next day (Thursday), Samsung swaggered that it had sold more phones than Apple in its last quarter, more than 20 million units.

POW!

I need a nap.

What it all means

My head is swimming not just with this sudden swirl of smartphone spectaculars, but how radically the cellphone space has changed in just a couple of years when Android appeared to give Apple a run for its iPhone core and made the flip phone as old-fashioned as a corset.

Three things are striking about all this recent activity.

1. If iPhone 4S had come from any other phone maker, it would have been laughed off as hopelessly antiquated – a "new" 3G phone with a 3.5-inch screen? That's sooooo 2010!

2. Yes, Samsung sold more smartphones than Apple last quarter – before iPhone 4S, after Apple pulled back the 4 in anticipation of the 4S, and before Apple spread its distribution wings to include Sprint domestically, moved more aggressively internationally (Apple says 12 percent of its Q4 revenue came from China), and started selling $99 and free iPhones, finally recognizing true market growth lies at the low end of the market.

3. In cases of too-little-too-late, are BlackBerry and Microsoft Windows Phone doomed? With the way Apple and Android have seemingly split the smartphone market between them, and considering the failure of the PlayBook, BlackBerry's recent service outage and subsequent reports of a mass migration of BlackBerry users to iPhone, and how late Microsoft has been to roll out Windows Phone updates and products, it's hard not to think the A's have it.

The Siri affect

The game changer in this competition free-for-all could be Siri. She (yes, I'm already anthropomorphizing her) has generated an immense amount of positive publicity that has smothered the specification drawbacks of iPhone 4S as well as both Siri's serious side and her drawbacks (you have to connect to the Internet to do everything and anything, even local tasks such as simple voice dialing). As if in a final tribute to the late Steve Jobs (RIP), Apple's reality distortion field perception has once again triumphed over reality.

But you can tell Apple's competitors are spooked by Siri – both Microsoft and Google have taken swipes at her while touting their own sound solutions. Only the worried malign new competitive features with absurdly dismissive "man will never fly" predictions.

Regardless of her pros, cons and sideline sniggering, however, bear in mind, Siri is technically still in beta. She's already proven to be a sexy prodigy, so she has nothing but upside potential as she grows up and moves to phones with faster network connections and more powerful processors. (Personally, I'd play Yenta and try and match Siri with IBM's Jeopardy-champion Watson. What do you get for the couple who knows everything?)

And we know the last project Steve Jobs was actively involved with before his death was the true iPhone 5. Due next summer, this is the iPhone we geeks were all expecting and presumably will be a 4G model (finally!) with a larger screen (finally!) powered by the company's new quad core 1.5-1.7 GHz A6 processor, which should provide Siri with the platform that could turn her into a supermodel.

And probably one more thing…

POW!

Will TV Everywhere Kill Set Top Boxes?

Monday October 17, 2011 – Greg Scoblete

As someone with little interest in watching TV on the TV, I've never quite understood the appeal of watching it on devices that are not the TV. But I also understand that my tastes are hardly mainstream and are probably downright un-American, and so the "TV Everywhere" trend gains steam. As it does, it raises an inevitable question: if you can indeed watch TV everywhere, what becomes of the set-top box (STB) market?

In the past few weeks, its turf has definitely been assailed. Microsoft fired a volley with the announcement that it would offer both free and pay TV on the Xbox 360 gaming console. Among the providers lining up to offer their content were some big names: Comcast, HBO, ESPN, Bravo and SyFy. The TV functionality isn't confined to the states either, with European providers, such as BBC, Canal+ and Lovefilm signing on.

The Xbox deal doesn't sideline a pay TV STB - at least one box would be required in the home to deliver programming. But it might convince some consumers to forgo a second box for ancillary TVs used for gaming. Economically, it's something of a wash: to access pay TV on the Xbox 360 requires a $60 annual subscription to Microsoft's XBox Live, about what you would pay per annum to rent a basic STB. The Xbox itself probably couldn't push the needle on STB shipments, but if Sony and Nintendo hop onto the bandwagon, that's another story.

DirecTV also made a move to disperse its programming to mobile devices with a product that's, dare-we-say, slightly Slingbox-ish. Dubbed the Nomad, this small STB lets consumers view DVR-recordings on up to five mobile devices. It can't stream live TV but can automatically sync DVR recordings with mobile devices.

Outside of devices, apps have been proliferating that let users view TV on their mobile phones and tablets. Not every content provider is enthusiastic about TV Everywhere, however. YES is battling Cablevision over the latter's iPad app, saying its programming cannot be distributed to mobile devices outside the home (a stance echoed by Viacom). But clearly more pay TV providers are looking for alternative means to give their customers their TV fix beyond the set top box.

Does this mean STB shipments will wither? Probably not in the short-term. TV Everywhere is aimed at out-of-home viewing - for those forlorn commuters stuck in a train or an airport. If you have access to a secondary TV in the home, it's unlikely you'd pop open the iPad to squint through the latest Mad Men. In the longer term, if the Xbox experiment proves successful and other game systems and content providers saddle up, it could make it easier for service providers to skip additional box installations. There's a clear benefit there for the pay TV provider - fewer boxes to inventory - and for the consumer as well, as they'll be one less device cluttering up the entertainment center.

But in this instance, content is king. Despite the impressive roster of names, the Xbox still doesn't boast the kind of channel line-up your average pay TV consumer has access to.

Digicam RIP

Monday October 10, 2011 – Stewart Wolpin

As the new iPhone 4S arrives, and as Android acolytes chuckle at iPhone 4S’s suddenly tiny screen and Android-like notification pulldown bar, and Sprint agrees to buy $20 billion worth of iPhones over the next three years, one segment of the tech industry, digital camera makers, may just accuse Apple of murder.

With iPhone now sporting a CMOS 8 MP camera with face detection and 1080p video recording, the cheap digital camera could be dead-tech walking.

But iPhone 4S's enhanced camera specifications are the least of the problems facing point-and-shoot digicam makers.

Psst! Wanna cheap iPhone?

Apple (or, rather AT&T, Verizon and Sprint) will be giving away the iPhone 3GS – as in free, with a two-year contract – and selling an 8 GB iPhone 4 for $99.

Hmm, let's ponder the digital camera buying dilemma as a consumer would. A whole iPhone 4 with a 5 MP camera and 720p video recording for $100, or a digital camera that can't upload pictures to Twitter or attach snaps to a text message for around $150?

Okay, maybe that's not much of a dilemma.

Yes, digital cameras have better lenses and can do a lot of other fancy photographic tricks. But face tracking, funny frames, funhouse effects or in-camera editing can't come close to compensating for connectivity.

Plus, who says a cheap digicam is a better camera than a smartphone? While I still use a high-end point-and-shoot camera for business, I suffer no geeky qualms leaving it at home for casual candids. iPhone 4 takes remarkably good photos and, presumably, the iPhone 4S will take even better ones. In fact, I recently took similar night shots with an iPhone 4 and with a new digicam, and the iPhone shots were far superior – with no special exposure or "night scene" settings.

I'm also playing with both the Sprint and AT&T editions of the Samsung Galaxy S II smartphone, each with an 8 MP camera and 1080p video capture, and I'm shockingly impressed with the results of both.

And, I'm guessing, so will the great unwashed. Camera, shmamra. Camcorder, camshmorder. Who needs 'em? And the numbers bear out this dismissive attitude.

Apple outsells whole industry?

According to DTC, 440 million smartphones will shipworldwide this year – and that projection was made before anyone knew Apple would expand iPhone 4S sales through Sprint and offer a free and sub-$100 iPhone.

In its last quarter, ending in July this year, Apple sold 20.3 million iPhones. Anyone doubt iPhone shipments may surpass 50 million by the end of the year? Anyone? Bueller?

Conversely, DTC projects only 121 million digital cameras will be shipped worldwide this year. In other words, Apple alone could ship the equivalent of 40% of the total number of digital cameras that will ship worldwide this year.

Oy.

And then DTC believes only a third of all digital cameras are capable of recording HD video, the only digital cameras providing a true alternative to the iPhone 4 and most of the new 5 MP/8 MP-720p/1080p-equipped Android phones introduced this year.

Double oy.

And, again, this is a projection made before Apple announced AT&T, Verizon and Sprint would give away iPhones. Anyone now doubt this digital camera shipment projection may be a bit short? Anyone? Bueller?

Yes, the new iPhone 4S is good news for lots of folks in the tech biz. But smartphones have practically made pocketcams obsolete, and now have their laser sites are targeted at the digital camera business.

Content Can't Be King Without Customers

Monday October 3, 2011 – Greg Scoblete

It's been a raucous few weeks in the pay-TV space. First, Netflix suffered the mother of all PR debacles as it split its streaming and rental service into two entities, causing rampant consumer confusion and forcing the CEO into a public apology. (To add comical insult to injury, the Twitter handle adopted by Netflix's new brand Qwikster, was already occupied - by a foul-mouthed, pot-smoking malcontent).

News of the bifurcation of Netflix and the company's expectation that it would lose a million more subscribers than they initially thought as a result, sent the company's stock plummeting. Suddenly, formerly bullish analysts were realizing that Netflix's streaming library didn't have quite the roster of attractive content that its disc business did (an artifact of an increasingly anachronistic law that treats digital distribution differently than physical distribution).

Then, Starz piled on, by pulling out of Netflix's service after the two failed to come to terms. It turns out that Starz wanted Netflix to charge customers even more for "premium" movies, above the monthly $7.99 fee for Netflix's current streamed offering.

But perhaps the bigger news, at least potentially, came from Reuters, which reported that several cable operators were "privately working on a plan to force programmers to unbundle their networks and allow customers to subscribe to channels on an individual basis."

This move to "a la carte" programming has long been resisted by pay TV providers, who have argued that consumer choice would leave niche programming to whither on the vine. But now it's appearing like an economic imperative not only for them, but their customers. Take the economics of the pay TV providers first. They are being battered with soaring retransmission fees. In 2010 alone, those fees soared a whopping 46.7 percent and, according to Reuters, have been outpacing inflation in the past decade with growth between six and 10 percent. Do you remember your last 10 percent raise? How about your last 46.7 percent raise?

Typically, pay TV providers handled these increases by passing them along to their customers. But then the global economy collapsed, taking millions of American jobs with it. According to Felix Salmon, a stunning 40 percent of U.S. households today spend all of their income on food, shelter, transportation and healthcare. Even if that number is wildly inflated, it's obvious that the consumer, at least in the U.S., can no longer absorb such price hikes - and the pay TV providers know it.

Netflix and other Over the Top providers were seen as a possible solution for these penny-pinchers - a way to preserve access to content without the steeper monthly fees of a cable or satellite bill. But a la carte pricing could strangle a nascent OTT threat in its crib - if the pay TV and content providers can agree to favorable terms. The content providers in particular need to think long and hard about a pricing strategy that involves ever-escalating costs to the end-user in an era of economic austerity (or, worse, depression). Content may be king, but what good is a kingdom without any subjects?