Technology fights shaping CE industry's future - consumer electronics

Discount Store News, Jan 16, 1995 by Arthur Markowitz

It's deja vu for consumer electronics. Format fights are a classic story for the industry, the most notable being the '80s battle between VHS and Betamax as the tape standard for VCRs.

The industry is at it again. The immediate battle is taking place in the video game arena as vendors unveil 32-bit systems as replacements for current 16-bit players. Each manufacturer is offering a proprietary system that is incompatible with those of rival suppliers.

This, of course, was to be expected, as video game vendors have teamed up with different microprocessor suppliers--and the PC-chip business continued to wage ferocious format fights.

Two major format struggles involving CDs are looming. One is the embedding of liner notes--texts of songs, video clips and performers' comments--on enhanced CDs. These CDs play just music in a traditional CD player, but provide a full range of audio/visual features when used in a PC CD-ROM.

One format spots the enhanced information in the unused center of the CD, while the other places the information as the disc's first track. The latter format requires consumers to skip the first track when they play an enhanced CD in an audio-only CD player.

The other format contest entails compression of movies on a CD so that an entire film can be stored and played using just one disc. This technology is seen as an eventual replacement for the VCR.

One compression standard is compatible with current CD manufacturing, so the discs can be produced and sold at low cost. The other provides sharper movie theater-like resolution, but requires new manufacturing techniques and will result in more expensive CDs.

While consumer electronics vendors wrestle each other over formats, one industry segment, the TV networks and set manufacturers, is trying to avoid a tussle. A number of vendors (and technology allies such as research institutions) first proposed standards for high-definition TV broadcasts that would be the basis for the manufacturing of sets and broadcasting of programs by the end of the century.

These systems were tested by CableLabs, a nonprofit research and development consortium. Technology from these various proposals were then combined into one Grand Alliance technology will occur next month.

The future direction of the CE world is literally at stake in these format conflicts. The final standards won't just impact specific products, they will also determine the technology for what is the most important CE item for the rest of the decade: PCs with CD-ROMs.

Video game players are stripped down PCs that some vendors foresee promoting into true low-cost computers. High-definition TV is the key to the evolving morphing of TVs and PCs into a new home information/entertainment device. And CD-ROMs (and new technology that will enable discs to store more information) are the core storage and retrieval devices. The next few years will see the resolution of these format jousts, the future shape of the CE industry and whether the next generation of PCs enable everyone--not just the nation's more affluent consumers--to ride the information highway into the 21st Century.