Seeing Is Believing At CESSeeing Is Believing At CES

Now that the networked home is a reality as opposed to a concept, more vendors than ever are using this year’s International Consumer Electronics Show in Las Vegas as a vehicle for targeting digital integrators as strategic partners. In turn, integrators attending the show will be applying a much higher standard when determining which vendors to partner with throughout the new year.

Digital Deck is just one example of a vendor that since last year’s show has come to the realization that integrators are the right arena for driving product sales as part of a full networked solution. Last year, the Redwood City, Calif., vendor introduced its multizone A/V distribution systems at CES with intentions to sell the product exclusively through retail. But several months later, the company realized that if the product, as intended, was part of a whole-house entertainment system, it would take the skills of an integrator to properly install and support it, says Martin Levy, vice president of strategic development at Digital Deck. The vendor will pitch the system, scheduled for shipping this month and running about $4,600 for a three-zone setup, to integrators.

“The biggest single reason for the shift in strategy was the emergence of the networked infrastructure in the home,” Levy says. “If you go through retail, you need to sell something that a consumer can easily set up in a home. If it doesn’t work off the bat, they’re going to return it, and those transactions kill business. Now we have integrators doing the installation and making it work correctly. That increases customer satisfaction and decreases the chance of returns.”

Industry experts agree that new, cost-effective IP-based networking products, backed by widespread sales of iPods, personal video recorders, digital imaging and video solutions, and price drops in feature-rich flat-panel displays, are fueling consumer interest in distributed media, IP surveillance and VoIP.

“In many cases, the consumer doesn’t wake up one morning and say, ‘I want a home control system.’ But they will say, ‘I want a digital TV.’ That person will then move into some type of home theater, and I guarantee he’ll soon have a table covered with remote controls,” says Jim Gist, director of business development at Control 4, a Salt Lake City vendor of control systems, which will exhibit at Booth 21407. “If we can show them a way to make their entertainment experience better and easier to control at the right price, then they’ll begin adding other things like controlled lights and surveillance.”

Control4, which attracted a flurry of interest when it first showcased its products at last fall’s CEDIA Expo, will host its first Developers Conference at CES for about 30 partners in Room S115 in the South Hall. The company’s aim, Gist says, is to encourage the integration of more third-party solutions into the Control 4 suite of products, all of which will ship this month.

Al Giazzon, vice president of marketing at BenQ, adds that rapidly falling prices for flat-panel displays is helping to propel sales of other solutions into the SOHO and home networking markets.

“A year ago, larger-format LCDs and plasmas as the central point of a home networking solution were only for a small niche of customers, but the dramatic decrease in price has made them more of a focal point in the SOHO, home and SMB,” Giazzon says. “Now we’re seeing 30-inch LCDs for under $2,000, and that dramatically opens up the market. We’ll see a lot of new opportunities where people will start opening their wallets for more products and solutions like distributed media.”

Like many dealers, Jim Hargate, president of Hargate Theatre Vision, a custom installer in Palm Desert, Calif., feared price drops in displays would hurt his bottom line. But he has found the exact opposite has happened. Since moving his business to a better location, Hargate has attracted a more upscale clientele and has sold twice as many displays as it did a year ago. Customers who get a price break in one area also will often spend the savings in other areas, such as lighting, in-wall speakers and more custom furniture. In the past several years, Hargate’s business has shifted sales from about 95 percent retail to 85 percent custom-install.

Today, his customers are also asking for more PC-related and wireless networking solutions. Those technologies have also helped Hargate expand his business to a less-affluent customer base.

“We have a lot of competition, but we’ve continued to grow because we’ve established a niche,” says Hargate, who’ll take time at the show to see the latest speakers from Nyles, Paradigm and Atlantic Technologies, and new wireless products.

He also plans to visit projectionist specialist Runco in hopes of becoming an authorized dealer. “With more items to sell, we’ve been able to increase the services we offer. You can’t keep doing business the way you did it last year. You have to change with the times.”

When reflecting on changes in the industry, vendors and integrators note that CES is quickly taking the place of the defunct Comdex show as the place to view not only the hottest CE products, but IT-related technologies as well. It’s also the ideal venue to build relationships.

“It took me only three hours to walk through Comdex last year. This absolutely replaces it,” says Tyler Dikman, CEO of Cool Tronics, a San Jose, Calif., integrator that focuses on residential and education markets and is about to launch a vertical division geared toward aging baby boomers. “The joke used to be that everybody in Silicon Alley would get on the same plane and met at Comdex. That’s how CES is now. It has most of the technology you want to see and most of the people you want to meet.”

This year, Dikman will be comparing new wireless networking products from companies such as Buffalo Technology, Linksys and Netgear, exploring video-on-demand services and checking out the latest HDTV offerings.

Gary Shapiro, CEO of the Consumer Electronics Association, the founder and host of CES, tells Digital Connect that the organization is limiting attendance to 120,000 registrants this year, down from about 132,000 last year, to help the show maintain its business-to-business focus.

“What also has shifted is that the products [used to] start in the IT world, then went to the consumer world. Now they’re starting in the consumer world and going to the IT world,” he says. “We are getting more and more integrators into CEA, there’s no question.”

There’s also no question that more pro A/V installers and traditional CEDIA members are finding new opportunities in commercial markets as they familiarize themselves with IP-based networking and other IT-centric products.

“From a channel perspective, what we’re seeing is that the traditional CE dealers selling TVs and speakers have embraced front projection solutions and are selling them into boardrooms,” says Jim Davis, senior director of consumer products at InFocus, based in Wilsonville, Ore. “They’re finding new opportunities in different markets, and that’s new from a year ago.”

But InFocus, which until recently focused on the commercial market, realizes there’s opportunity in the home market for its traditional solution provider partners. At CES, the company will roll out five new projectors geared specifically to the home and backed by integrator margin protection.

“The key word today is ‘convergence’: the IT side coming together with the CE side,” Davis says. “That drum is being beaten louder and louder.”

Convergence between IT- and CE-related technologies has opened new business opportunities for Rick Butare, CEO of IntelliHome Tech, Martinsville, N.J. Butare, who attended last year’s CES, began selling into the new home and retrofit markets and has since expanded into point-of-sale solutions for retail stores.

“What I’m doing with displays in retail isn’t much different from what I’m doing in homes,” says Butare, who’ll be looking at next-gen technologies related to Windows Media Center Edition, wireless video streaming, Linux applications, and the latest displays and other products from Samsung and ViewSonic. “Business applications are, in many cases, now being driven from the home. The technology is often the same; it’s the user interface that changes.”

The convergence trend isn’t lost on Buffalo Technology, an Austin, Texas, vendor of wireless networking products. Buffalo has leveraged its strong presence in SMB to move more aggressively into the SOHO and home networking markets. The company will showcase its LinkTheater (MSRP $349), a wireless networked media player with built-in progressive scan DVD, and the Wireless LinkStation storage unit with built-in print server, which comes in a 160-Gbyte version ($349) and a 250-Gbyte version ($449).

“Prices on wireless products have come down tremendously, and the SOHO and consumer products have more features [such as security] that VARs feel comfortable selling to their clients,” says Morikazu Sano, Buffalo’s vice president of product marketing.

The plethora of IP-based and CE products, disparate technologies and mix of attendees make this year’s CES the most important that Belkin, Compton, Calif., has ever displayed at, says Mark Reynoso, vice president of sales for the Americas. Its booth--with segments dedicated to pro A/V, entertainment, VoIP and SOHO and home networking--is aimed at the new breed of integrator that is adjusting its business to provide products and high-margin services to the commercial and residential markets. Needless to say, Reynoso expects heavy traffic.

“We’re going to show how IP-based solutions dominate the SOHO and living room. We’ll address how critical it is to understand IP and digital technologies in all aspects of networking,” he says. “Integrators have to recognize that the landscape they’re doing business in is shifting. They have to realize that they’re competing for the same customer and to win they have to differentiate their businesses through services. They have to be well-armed enough to say, ‘These solutions are real, they are deployable and this is what it means to the bottom line.’ ” MAINTAINING YOUR SANITY AT CES

Survival Guide

You have to wear comfortable shoes. That’s a given. CES veterans, however, offer additional tips to help you maintain sanity and stamina during what promises to be an exciting, yet chaotic, show.

Lee Travis, CEO of Home Technologies, Bellevue, Wash., was attending the show before he was legally allowed into the casinos. Today, with more companies setting up in hotels away from the convention center, it’s become more of a gamble to make appointments on time. To beat the hellish taxi lines, Travis relies on as many hotel and convention shuttle buses as possible. The trip might take longer, but it beats standing in cab lines. “The hotel-suite thing has really made it a challenge,” he says.

Tyler Dikman, CEO of Cool Tronics, San Jose, Calif., opts to gather a few like-minded souls and hire a Town Car to quicken his ride. “It costs you a little extra, but it saves you a lot of time,” he says. When the Town Cars are taken, he’s able to move up to the front of the line by claiming he has a flight to catch. “That’s why you have to carry around one of those little wheelie bags,” he jokes.

Rick Butare, CEO of IntelliHome Tech, Martinsville, N.J., books a room in Vegas for the duration of show to lessen the madness. Each night he also plans the next day’s strategy so that he can focus his time in one area of the convention center instead of jumping around. “You have to develop a single purpose each day because, otherwise, it’s just too overwhelming,” he says.

Jim Hargate, CEO of Hargate Theatre Vision, Palm Desert, Calif., attended the first CES show and is still around to talk about it because he’s always followed one of the best pieces of advice when viewing products and scheduling vendor meetings. “You have to continually have an open mind to stay on the cutting edge,” he says. “And, of course, you need to get good walking shoes.”

Cool Booths

BenQ
South Hall Booth 30313. New products: projectors, family friendly and backlight LCD monitors, 46-inch LCD TV.

Buffalo Technology
Renaissance Hotel (behind LCC) Booth RD1130. New products: wireless version of its LinkStation Network Storage Center; LinkTheater High-Definition Wireless Media Player, TeraStation NAS.

Control 4
South Hall Booth 1/21407. New products: Line of digital media control and distribution solutions.

Iogear:
South Hall Booth 30359. New products: KVMs, Bluetooth GPS.

Hitachi
South Hall Booth 25342. New products: The Hitachi Digital Home will feature small-form-factor devices based on new hard drives.

Intel
Central Hall Booth 7155. New products: Entertainment PC barebones platform.

Microsoft
Central Hall Plaza, CP8 and 7145. New products: Everything related to Windows MediaCenter 2005 Edition OS. XBox Division, Hilton Suites/HC1630. New products: latest games, gadgets and gizmos.

Samsung
Central Hall Booth No. 11024. New products: 40-, 46- and 50-inch wide-screen LCD HDTVs, Home Theater In A Box.

ViewSonic
South Hall Booth 3/30679. New products: Wireless Media Gateway.

Keynotes

Wednesday, 6:30 p.m., Las Vegas Hilton
Microsoft Chairman and Chief Software Architect Bill Gates kicks off preshow festivities. Expect him to herald Windows Media Center Edition 2005, Xboxes, Tablet PCs, smart phones.

Thursday, 8:30 a.m., Las Vegas Hilton Theater
Gary Shapiro, president of the Consumer Electronics Association, lays down the state of the industry. Intel CEO Craig Barrett shares the stage with his opening day keynote.

Thursday, 4:30 p.m., Las Vegas Hilton
Motorola Chairman and CEO Edward Zander discusses how technology advancements help consumers stay more informed, connected, entertained and secure.

Thursday through Sunday, North Plaza
Installer Challenge: Installers compete in this four-day mobile installation contest to build the best car.

Friday, 9 a.m., Las Vegas Hilton
Hewlett-Packard Chairman and CEO Carly Fiorina takes the stage to talk up innovation. If her keynote is anything like last year’s, you can expect some major stars to join her.

Friday, 10:30 a.m., Room N250 LVCC
TiVo CEO Mike Ramsay chats up digital video recording.

Friday, 3:30 p.m., Las Vegas Hilton
Texas Instruments CEO Rich Templeton discusses semiconductor strategies that will enhance the industry.