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Five Technologies to Watch

2006 Edition Features Recordable HD Content, Domestic Robotics, the Digital Home Studio, Interactive Gaming and Innovative Displays

Arlington, VA – The Consumer Electronic Association (CEA) today released the 2006 edition of Five Technologies to Watch, an annual publication that examines five prominent technology trends set to influence the consumer electronics (CE) industry in the year ahead. This latest edition examines recordable high-definition content, domestic robotics, the digital home studio, interactive gaming and innovative displays.

This year’s edition of Five Technologies to Watch forecasts endless possibilities for the consumer electronics industry. “These five technologies truly illustrate the progress of technology in the digital age. They stood out in our extensive research process as the most likely to make the biggest splash in the consumer market in the year ahead,” said Gary Shapiro, president and CEO of CEA. “Every year the industry continues to make strides toward improvement, and it is clear that the consumer electronics industry has a bright future.”

Geared toward industry professionals, the publication provides an analysis of each of the five trends and outlines related issues and market forecasts for the upcoming year. Other topics covered for each trend include consumer perspectives, partnerships, key players and public policy issues.

The ability to receive and record HD content at home is quickly becoming a reality of the digital age. The surge in HDTV sets and HD programming will see recordable high-definition devices, including Blu-ray Disc, HD DVD and HD DVR, also making a big impact in the market, according to Five Technologies to Watch. Already, digital video recorders (DVRs) can be found in nearly 10 percent of American homes and the number is expected to rise in 2006 with more cable and satellite providers offering the HDVR service. Blu-ray Disc and HD DVD offer the ability to record and transport HD content, but a potential format war between the two standards could be a roadblock to the adoptability of HD recording. Copy protection and video-on-demand also pose significant threats to recordable HD devices; however consumer research points to a bright future for HD recording.

New advances in robotics still have not produced a robot that can match a human’s flexibility, mobility and dexterity; however, single purpose or specialized robots are quickly becoming a reality in a number of homes. For example, robotic vacuums can already be found in a half a million American homes and other domestic robots that can control home networks, sort laundry or scrub the kitchen floor are not far off. In fact, in the not-so-distant future, domestic robots likely will be sold as household appliances or accessories to a suite of appliances. But in order to achieve mass-market appeal, these robots must be relatively inexpensive, reliable and effective – on par with other labor saving consumer appliances.

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The explosion of digital cameras, camcorders, audio players, software and printers, along with other digital imaging and video recording devices and accessories, has created an entirely new segment of savvy consumers that create their own digital home studios to create, edit, print, store and share digital content. The do-it-yourself, or DIY, content market represents serious dollars. According to Five Technologies to Watch, in 2005 consumers will spend about $14 billon on devices for DIY content creation, which represents about one third of the total sales of digital cameras and camcorders. DIY content creation will not be a primary sales volume driver, but DIYers, while smaller in number, spend higher dollars for better equipment and help fuel the demand for new computers, peripherals and multimedia production software. With the rapid advancement and abundance of digital devices on the scene, aspiring photographers, filmmakers, musicians and artists will help make the DIY or digital home studio market thrive in the years to come.

Electronic gaming is a rich and dynamic component of the consumer electronics world. Shipment revenues of consoles and portable game platforms are expected to increase 18 percent to $3.7 billion in 2005, according to CEA market research cited in the publication. In addition, PC-based gaming has developed into a multi-billion dollar industry of its own and spawned new segments such as PDA and cell phone gaming platforms. Next generation consoles from Microsoft, Sony and Nintendo which will launch in late 2005 and early 2006 will be the next big opportunity for the video game market. These consoles can act as a cornerstone for the digital home by incorporating high-definition movie playback, online game play, digital camera and camcorder connectivity, and the ability to access computer files stored on a PC. On the console and PC gaming front, plans are in the works for on-demand game services offered through cable, satellite or IPTV and the possibility of a “personal game room” looks to be the next big thing in the custom installation world. Mobile gaming also continues to be big, with the market expected to reach $1.5 billion by 2008.

Finally, with the transition to digital well underway, the market for innovative television displays will continue to grow exponentially. With a renewed focus on home design and space, flat panel displays such as plasma, LCD and DLP have become increasingly popular. These sets promise a big screen and unprecedented picture quality in a thin package and sales of each will continue to grow even as the average wholesale TV price increases from $323 to $533, according to CEA forecasts. Still on the horizon for the TV market are newer, thinner display technologies, surface conduction electron emitter (SED) and organic light emitting diodes (OLED), which will succeed today’s flat panel display technologies and become the upgrade TVs of the near future. All combined, the volume of expected sales, the increased competition and the government’s effort to accelerate the transition create a market for display technologies that is sure to be hot long into the future.

The 2006 edition of Five Technologies to Watch also includes a special section dedicated to future technologies just emerging on the consumer electronics market. Hydrogen fuel cells for portable devices, radio frequency identification (RFID) chips, biometric scanners and nanotechnology will all help to create new CE products that will be more convenient, more personalized and more powerful that those of today.

About CEA:
The Consumer Electronics Association (CEA) is the preeminent trade association promoting growth in the consumer technology industry through technology policy, events, research, promotion and the fostering of business and strategic relationships. CEA represents more than 2,000 corporate members involved in the design, development, manufacturing, distribution and integration of audio, video, mobile electronics, wireless and landline communications, information technology, home networking, multimedia and accessory products, as well as related services that are sold through consumer channels. Combined, CEA’s members account for more than $121 billion in annual sales. CEA’s resources are available online at www.CE.org, the definitive source for information about the consumer electronics industry. CEA also sponsors and manages the International CES – Defining Tomorrow’s Technology. All profits from CES are reinvested into industry services, including technical training and education, industry promotion, engineering standards development, market research and legislative advocacy.

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