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Discount Store News, Feb 5, 1996

LAS VEGAS - The Winter Consumer Electronics Show beat the odds this year, rising above lowered expectations to nearly match last year's attendance and introduce several of the most important new products of the past decade.

The show was buffeted by a weak economy, temporary shutdowns of visa offices that kept many foreign attendees home and decisions by many entertainment companies (notably Nintendo and Sega) to limit their show attendance to upstart E3.

Nevertheless, about 90,000 industry professionals gathered in Las Vegas, and most exhibitors were delighted with the quality of the attendance.

DVD, which utilizes extra-dense compact discs to pack up to 18 gigabytes of information on a multi-layered, double-sided 5-in. disc virtually indistinguishable from today's CD, can play up to 133 minutes of laser disc-quality video on a single side, and a single disc could theoretically hold every official recording ever released by The Beatles-over 400 minutes worth.

Within two years or so, additional capabilities (video games, recordability and a blue-laser upgrade) could make DVD a true omniplayer, effectively replacing in one unit the VCR, the CD player, the CD-ROM player and tape backup deck, the laser disc player, the laptop computer, and all video game platforms.

An Internet connection could be added painlessly and other functions can be added easily as they arise, given DVD'S open architecture.

And DVD will be affordable. RCA plans to have a unit on the market in August at $499. Pioneer will weigh in a month later with units priced at $599 and up, including a DVD/CD/laser disc combination player. Toshiba, Samsung, Goldstar, Philips, Sony and many other CE manufacturers will introduce players over the next 12 months, inevitably driving the price down.

While skeptics abound, mainly pointing out that large numbers of Americans already own VCRs and CD players and will be slow to upgrade to this new technology, most retailers are hopeful, although many don't expect to see meaningful sales until sometime in 1997.

A key to the format's early success (it is almost a sure hit in the PC market) will be the availability of software. Time Warner announced that it will support the standard with all VHS titles available immediately in DVD versions at roughly the same price. It plans a rapid deployment of catalog titles through the year, and will work closely with hardware manufacturers to ensure that adequate software supplies are on shelves during hardware launches.

Both sides are, of course, hoping to hit the ground running with a viable rental market already in place, but that will be up to rental chains like Blockbuster. However, with a picture resolution 300 times that of a VHS tape, virtually indestructible and with an estimated installed base of 7.5 million units by the end of the decade, the format should find favor with rental chains. There were also suggestions of an availability window of at least two weeks in advance of VHS versions, and at least a month prior to pay-perview, which would further stimulate acceptance of the format.

DVD dominated the news at the show, but there were hundreds of interesting products in all categories scattered around the floor (see CD-ROM roundup, p. 62).

One of the most interesting was Espresso, from Beond Communications. The little box, about the size of a paperback book, is for busy executives who spend a lot of time on the road and don't have personal secretaries. Espresso can receive and store up to 18 minutes of voice mail or 100 pages of fax documents, notify the user by pager about what's available, retrieve documents from a preselected menu and fax them forward (for instance, if you forgot your CES appointment schedule, a new copy would be a phone call away any time of the day). It also can automatically fax commonly requested documents. At under $300, Espresso could become a major product for office and computer retailers.

Fisher-price and Compaq combined to introduce a new approach to kids'computing. The Wonder Tools line includes hardware (a kids keyboard and the Cruiser, an automobile dashboard model input device for preschoolers) plus software to get youngsters interested in computing.

The Cruiser allows kids to "drive" through an imaginary world, brake when they see something interesting, steer around obstacles, turn on headlights to look more closely at something and use a built-in joystick to play games and solve problems. The software was developed to keep frustration to a minimum. Kids can do literally anything at any point without getting lost in the game. Bored with an activity you've seen too many times? Honk the horn and it'll go away.

Both products and all eight software titles (more are on the way) will work with virtually any modern system (486 and up ). Expected prices for the keyboard and the Cruiser are $130 and $150, respectively, each with one title included, but street prices are expected to be considerably lower.

Samsung introduced a new line of Syncmaster 17-in. computer monitors aimed at the home user, with street prices of about $650. A new wrinkle: Samsung will take high-quality 14-in. and 15-in. trade-ins, offering up to $100 off. Additionally, if during the first three years a problem arises, the company will overnight a replacement, allowing the user to ship back the original unit later.