Category: The Front Line

I Have Seen the Smart Phone’s Future, and It Sings!

If your main priority is watching your smart phone, buy a Samsung Galaxy S5, which has the best display ever put into a cell phone, at least thus far. But what do you do if you want much-better-than-CD-quality sound to come out of your phone’s little 3.5-mm audio jack? Is such a thing even possible? And even if it is, will you be able to tell the difference with earphones that cost less than a small BMW? The answers, perhaps surprisingly, are “yes,” “yes,” and “yes.”

Two currently available smart phones — the Harman/Kardon edition of the HTC One (M8) and the LG G2 — contain the the digital-analog converter (DAC) circuitry for decoding 192kHz/24-bit FLAC files. (This compares to CD’s quality of 16 bits and 44.1 kHz PCM sampling rate.) The result was demonstrated for me on Tuesday evening (June 24) by David Chesky, head of Chesky Records and the creator of HDTracks, which supplies downloadable music files at 24-bit studio quality. HDTracks generally charges for the files you download but a music sampler is available on the site at no charge.

I certainly don’t have “golden ears,” but listening to the Doors with what were described as “a $100 pair of Chinese earphones” plugged into the HTC One was a remarkable experience. Musical texture and dynamic range were much better than what I’ve become used to, with stunning musical detail and spaciousness. Unlike Beats earphones, which attempt to impress you by distorting the sound, high resolution audio gives you the uncompressed, uncompromised sound that studio engineers have been listening to for years (before they dumb down the product to accommodate whatever file size and bit rate consumer products could handle).

Now, said top audio engineer Frank Filipetti of Earwhacks, “Consumers can hear exactly what we hear in the studio. They just have to ask for it.” Filipetti and Chesky were just two of the audio industry’s technical luminaries who spoke at the “High Resolution Audio Listening Experience” sponsored by the Producers and Engineers Wing of The National Academy of Recording Arts and Sciences, the Digital Entertainment Group, and CEA.

At the "High Resolution Audio Listening Experience," held June 24 in New York, Bob Ludwig discussed his project to convert the entire Bruce Springsteen catalog to high-resolution audio.  (Photo:  Ken Werner)

At the “High Resolution Audio Listening Experience,” held June 24 in New York, Bob Ludwig discussed his project to convert the entire Bruce Springsteen catalog to high-resolution audio. (Photo: Ken Werner)

This was no dry technical exposition. Presenters, guests, media, bottles of beer and glasses of wine were crowded into the main studio at Jungle City Studios. (Jungle City is so far west on 27th Street in Manhattan that audio types were rubbing shoulders with revealingly dressed young women and their escorts angling for early entry to a velvet-rope club that shares the street.

The other major speakers were Mark Waldrep of AIX Records and Bob Ludwig. Ludwig has more awards for Best Mastering Engineering, among many others, than would fit in this column. One of his current projects is remastering the entire Bruce Springsteen catalog into high resolution audio. He demonstrated some befores and afters in the studio, and golden ears were not needed to tell the difference. The high-res track conveyed much richer emotional content than the original CD.

As the demonstrations at CE Week and ShowStoppers a few blocks away on the following day showed, it is clear that high-resolution audio will be commanding a lot of attention in the consumer electronics space during the coming months and years. The high resolution audio track and the TV track are not converging yet, although the Dolby Atmos 3D sound system is being adapted to high-end TV audio systems, and that is also receiving considerable attention.

High-res audio is one of the more exciting developments in consumer electronics to come along in some time. After years of pushing convenience and mobility at the expense of audio quality, the industry is now clearly committed to returning to quality. But this is not simply a return to the quality of a good CD player playing through a cabinet full of audio components. It is much, much better. Even though the consumer hi-res industry is in its infancy, we can get remarkable quality from a cell phone. A separate DAC can be purchased for less than $100, and at ShowStoppers, Sony was showing its HAP-S1 networkable digital music system for $1000. The S1 has a high-quality DAC, a large hard drive for storage, a 4.3-inch display interface, a stereo amplifier, and even a couple of analog inputs. The audio quality is phenomenal, the compact case looks and feels like high quality, and this is certainly a consumer product: seamless and easy to use. Prices go up from there (Sharp was showing a $5000 high-res audio device with WISA wireless speaker connections), but even now, hi-res audio is accessable to anybody with the resources to acquire a high-end smart phone.

This is going to be interesting.

Ken Werner is Principal of Nutmeg Consultants, specializing in the display industry, manufacturing, technology, and applications. He consults for attorneys, investment analysts, and companies entering or repositioning themselves in industries related to displays and the products that use them. You can reach him at kwerner@nutmegconsultants.com.

Time For A Game Reset!

I’m writing this column the Friday before InfoComm, the AV industry’s largest trade show. It takes place next week in Las Vegas and should be a doozy, what with all of the changes happening in our industry: 4K digital displays and media players, new IPTV “in a box” solutions, expanding use of wireless connectivity, high-power laser-illuminated projectors, and next-generation display interfaces looming on the horizon.

Concurrently, the NBA Finals are underway, with the workmanlike San Antonio Spurs in the process of routing the flashy, star-studded Miami Heat. When you watch a Finals game on TV, the broadcast will frequently show a “game reset” graphic, which shows you which team has the possession arrow, how many fouls players have accumulated, and how many timeouts each team has left.

So before I leave for Las Vegas, I’m going to offer a “game reset” as we approach the mid-point of 2014. (Wow, did those six months pass by quickly, or what?)  There’s been lots of news about consumer electronics, TVs, 4K, China, Netflix, and video streaming recently – here are some of the headlines that grabbed my attention.

Sony TV Sales Rise 30% as Viewers Ready for World Cup (Bloomberg): Finally, some good news for a legendary CE brand that has seen an endless series of setbacks, including another whopping financial loss for its most recent fiscal quarter. According to Bloomberg, sales of Sony televisions during Q1 ‘14 generated $2.15B in revenue for the company, an increase of 30% over Q1 ’13.

While encouraging, that number doesn’t being to approach rival Samsung’s $9B revenue. But it at least keeps Sony in the game and earned them the #4 spot in sales rankings after Samsung, LG, and TCL. Sony forecast that 16 million TVs would be shipped this year, but claims it can still make money with a few as 13.5 million TV shipments. Keep in mind that Samsung and LG accounted for 40% of all TV shipments in the quarter, so Sony still has some ground to make up.

4K TV Shipments Are Taking Off (Business Insider): Two weeks ago, BI released a report that stated 4K (Ultra HD) TV shipments reached the “million per month” plateau this past March, and should hit 15 million by the end of the year. That’s nothing to sneeze at – with current TV shipment levels, Ultra HD would account for 7.5% of all worldwide TV shipments through December.

Falling prices have a lot to do with, as does the growing desire for bigger TV screens. BI states that the average selling price for 4K-capable televisions has dropped 86% worldwide in just two years, falling from $7,851 in 2012 to $1,120 in 2014. Last weekend’s HH Gregg sales flyer featured the LG 55-inch 55UB8500 120Hz Ultra HD LCD TV for just $1,999 – a discount of almost $1,000 from its original price – while Vizio has already gone on record saying they will have a 55-inch Ultra HD smart TV (no 3D) shipping later this year for $1,299.

Streaming video is greener than watching DVDs (Advanced TV):  This story was intriguing, as it details research by Northwestern University and Lawrence Berkeley National Laboratories that claims streaming movies and TVs shows is much more eco-friendly than watching them from an optical disc, such as the DVD or Blu-ray format. Researchers developed a model called “life cycle analysis” and studied five different ways of viewing movies, calculating the energy used and carbon dioxide emissions attributed to each method.

The test model required accounting for the energy used to manufacture DVDs; to transport DVDs by truck; to drive to and from local stores and rental locations to obtain discs; to stream movies over the Internet; and to manufacture and operate the DVD and Blu-ray players ultimately used to watch the movies. With no 4K standards in place yet for Blu-ray and sales and rentals of optical discs continuing to drop each year, will streaming become the de facto format for 4K content delivery?

49% Of U.S. Households Have a TV Connected to the Internet (Leichtman Research Group): It should be no surprise at all that almost half of all U.S. households now have a television connected to a wired or wireless network. And that’s because Netflix streaming now accounts for about 34% of all evening Internet traffic. The LRG study shows that 49% of Netflix subscribers watch video via a connected TV or other device (Roku, Blu-ray player, game console, computer) on a weekly basis.

Non-Netflix subscribers aren’t as enthusiastic, with only 8% of them using their Internet-connected TVs on a weekly basis. And 78% of survey respondents say they watch Netflix on a TV, and not on tablets, phones, or computers. Interestingly, 47% of all households surveyed get Netflix, Amazon Prime, and/or Hulu Plus, and 34% watch any streaming video on a daily basis.

Cisco says 4K IP Traffic Rising (Home Media): Finally, Cisco’s forecast for “visual networking” and service adoption predicts that 4K (Ultra HD) streaming video will account for 11% of all IP video traffic by the year 2018, a massive increase from last year’s paltry .1%. 2K HD video will constitute 52% of all IP video traffic over the same time period, with SD video streaming dropping to 37% from its current 64% share.

Cisco goes on to say that more than half the world’s population will have an Internet connection in 3.5 years with half of that attributable to mobile devices. In 2013, the average bandwidth used by an Internet customer was 15 GB a month, and that is expected to double by 2018. Now here’s a fun number to wrap your head around: Annual Internet traffic is expected to grow nearly three-fold to 1.6 zettabytes (ZB) by 2018! According to the story, “That is more than 13 times than all the IP traffic generated in 2008 or the equivalent of 1 billion DVDs being downloaded per day.”

OK, the referees are signaling our timeout is over. Back to the game!

Fat TVs Come Back

A few years ago Samsung introduced very thin large-screen LCD-TV sets with LED edge-lighting and thin light-guide plates (LGPs). The company earned its place in the infamous marketing hall of fame by ignoring reality and calling these sets “LED TVs,” which has confused TV consumers and salesmen every since. With these thin, elegantly designed sets, Samsung created a reason for people to buy premium TVs and enjoyed a surge in market penetration that lasted until the rest of the industry caught up — about 9 months. Thin was in.

But as LEDs became more efficient and less expensive, manufacturers began to see advantages in returning to the old style of placing the backlight’s lamps directly behind the LCD, but with a significant difference. The old stack of several cold-cathode fluorescent lamps would be replaced by a full array of LEDs. This would also be a return to the old, thicker, “light box” style of backlight, which LGPs had seemingly relegated to the dustbin of history. Would consumers accept thicker TVs after the industry had spent so much time selling them on thin ones, or would Tei Iki’s old flat-screen insight carry the day?

Tei Iki? In the waning days of CRT monitors, Tei Iki was assigned the task of squeezing as much lifetime as possible from Sony’s then-large CRT and monitor operation in San Diego. Iki was fond of placing a flat-screen LCD monitor on a desk next to a nearly-flat-screen Sony Trinitron CRT monitor, and aligning the screens so they were in the same plane. “See,” he would say. “All screens are flat.” And then he went on, motioning to the very different depths of the monitors, “The rest is just infrastructure.” How much infrastructure will consumers accept? And what will they get in return?

Two-year-old Samsung TV, as seen at the GrafTech International booth at SID 2014.  The display is removed to show the full-array LED backlight. GrafTech makes the graphite heat spreaders seen under the LEDs on the left side of the backlight. (Photo: Ken Werner) Two-year-old Samsung TV. The display is removed to show the full-array LED backlight.

Two-year-old Samsung TV, as seen at the GrafTech International booth at SID 2014. The display is removed to show the full-array LED backlight. GrafTech makes the graphite heat spreaders seen under the LEDs on the left side of the backlight. (Photo: Ken Werner)

A couple of years ago, LCD-TVs with full-matrix LED backlights began to appear in the North American market as low-cost sets. (See photo.) One big saving was the elimination of the expensive LGP. And to keep costs really low, a minimal number of LEDs were used in the array. As a result, these sets generally had less luminance than edge-lit models.

But, as was very well-known at the time, the LEDs in a full-array backlight can be controlled in groups to significantly enhance the dynamic range of the images displayed. Thus, set makers could use the same backlighting technology for value-priced and premium sets, depending on the number of LEDs and the sophistication of the “local area dimming.”

And that’s what Vizio is doing as it rolls out its new 2014 M Series, FHD, smart LCD-TVs. The premium M series sets have their LEDs controlled in up to 32 separated zones, with the 70-inch having 36 zones. Only the 80-inch still uses an LGP. (The 80-inch also features local-area dimming since a somewhat limited version of this technology can still be implemented with edge-lit LGP backlights.)

The more economical E series also uses full-array backlights and local dimming, with the local control maxing out at 18 zones.

Although it’s not really part of this column, Vizio is not offering 3D capability on any of its 2014 sets. Chief engineer Ken Lowe has always said that Vizio achieves its very competitive pricing not by compromising quality, but by including only those features consumers value. Vizio feels that consumers’ lack of interest in 3D is so profound that the cost of 3D capability should be directed to other features.

Getting back on topic, AmTRAN, which has licensed the JVC name for direct-view TV sets, announced this week the introduction of a 32-inch HDTV model in its JVC Emerald Series. The EM32FL is intended for the growing number of people who inhabit small apartments but still want a full-featured TV. The $269 (MSRP) set features full-array backlighting. Since AmTRAN claims a four-million-to-one dynamic contrast ratio and “silky black levels,” we can assume the set is using local-area dimming.

Is this enough performance and cost-saving to justify a fat TV? Well, they really aren’t that fat. Vizio’s 65-inch M-class is a whopping 2.28 inches thick. Yes, an LGP edge-light could cut that to less than an inch. But I feel Tei Iki leaning over my shoulder, saying, “It’s just infrastructure.”

Ken Werner is Principal of Nutmeg Consultants, specializing in the display industry, manufacturing, technology, and applications.  He consults for attorneys, investment analysts, and companies entering or repositioning themselves in industries related to displays and the products that use them.  You can reach him at kwerner@nutmegconsultants.com.

Of Phablets and 4K

Lately, trying to predict sales trends is like shooting at a moving target. And just when we think we have a market segment figured out, it turns in a new direction.

So it goes with the shipments of tablets, which most analysts had pegged to grow by 20% in 2014 over last year. But hold on – a recent report from IDC has dropped that number to 12% after Q1 shipment numbers came in.

In a January press release, IDC had predicted that tablet shipments would hit 270M units this year. At some point, that number was revised downward to 261M units. Now, IDC is forecasting 2014 shipments will drop to 245M units, based on lower-than-expected Q1 results.

What’s the reason for the fall-off? IDC states one obvious cause: People are keeping tablets longer than expected. Unlike smartphones, which are usually recycled every two years (the length of the typical service contract and phone battery), many older tablets are still in service. My wife still uses her iPad 2 daily, and I’ve gotten two+ years out of my Nook HD tablet.

IDC also found that older tablets are often “handed down” to another family member, which represents another lost sale. The vast majority of tablets are using conventional Wi-Fi connections to get data, which means they aren’t sold with annual contracts for LTE service.

But there’s another factor that IDC identified, and that is the growing popularity of large smartphones, or “phablets” as some wags have named them. Phablets are phones with screens larger than 5 inches, although IDC prefers to start the category at 5.5 inches. These gadgets can do everything a tablet can (plus make phone calls and send/receive texts), and many consumers find they’re large enough to stand in for a tablet screen.

The phablet category really took off when Samsung’s Galaxy smartphones broke the 5” screen barrier over a year ago. At the time, many analysts predicted that screen size would be too large for consumers. Guess what? They’ve been flying off the shelves. And now we’re starting to see 6” smartphones from the likes of LG and HTC. (LG even has a curved model, the G Flex.)

LG's new G-Flex curved phone has a 6-inch screen. Too big? Apparently not!

LG’s new G-Flex curved phone has a 6-inch screen. Too big? Apparently not!

IDC’s research states that smartphone shipments (30.1 million units) increased from 4.3% in Q1 2013 to 10.5% in Q1 2014. Consequently, shipments of larger tablets (8” – 11”) are expected to increase this year by 3% over 2013, while 7” – 8” tablets will see a decline of 5% in the same time period.

Even though phablets are pushing the limits of screen sizes, they’re finding a sweet spot with the public. The same thing appears to be happening on a smaller scale with 4K (Ultra HD) TVs, which IDC also tracks.

According to their research, worldwide 4K TV shipments reached over one million per month in March and are expected to hit 15.2 million for the full year. That’s better than most analysts expected, given the low awareness of 4K by the general public. IDC also found that the average selling price for Ultra HD TVs has fallen 86% since 2012 (when there were a handful of models) from $7,851 to $1,120 at the end of March.

According to a new report from Business Insider Market Intelligence, 4K TV sales are largely propelled by low prices in China, where many fabs are moving to 4K LCD panel production and leaving low-margin 2K panels behind. Indeed; the BI press release identified the Chinese market as “most accessible” for 4K TV.

In North America, BI predicts that 10% of all households will have at least one 4K TV by the end of 2018, and that worldwide shipments of 4K TVs will hit 11 million units by the end of 2016. We’ll no doubt see Korean manufacturers switch over to 4K LCD panels in larger sizes within two years, as the profit margins on 2K glass have dwindled to almost nothing.

There’s a precedent for the move to 4K, and that is the transition almost eight years ago from 720p/768p display resolution to 1080p. Now, history is repeating itself, and it’s likely that LCD TVs larger than 55” will all be Ultra HD in short order.

Have your doubts? At CES, Vizio announced a fall line-up of Ultra HD Smart TVs with eye-popping prices, such as a 50” model for $999, a 55-inch version of just $1,300, and a 65-inch offering for $2,200. Those prices aren’t much higher than what “loaded” smart 3D 2K LCD TVs command now. Vizio will even have a 70-inch 4K set for $2,600!

Consider also that Chinese manufacturers are setting up shop to build LCD TVs close to the US market. Last month, TCL purchased Sanyo’s TV manufacturing facility in Tijuana, Mexico, giving it a big advantage over other Chinese brands in shipping and tariffs. And you can bet that 4K Ultra HD TVs will be rolling off that line in the not-too-distant future.

By the way, 4K and phablets have already intersected. At least five new smartphones support native 3840x2160p/30 video recording; among them Sony’s Experia Z2, Samsung’s Galaxy Note 3 and S5, LG’s Optimus G Pro, and Asus’ Liquid S2. And three of them fall squarely into the phablet category, providing me with an appropriate wrap-up to my story…

A Tale Of Two Companies, Part II: The Best-Laid Plans…

In a recent post, I talked about Panasonic’s impressive financial turnaround from its last fiscal year, booking a nice profit after doing some soul-searching and consequent house-cleaning of underperforming business units. And I contrasted Panasonic’s performance with the struggles of Sony, who continues to struggle with red ink. Let’s take a few moments to revisit both brands.

Coincidentally, Panasonic held a couple of press days this week in New York City to talk about its 2014 TV lineup. I attended the Thursday session and can say that it was much more low-key than previous Panasonic TV events.

For 2014, the emphasis was on two things – 4K, and cloud connectivity. Panasonic introduced a new concept, LifeScreen, which is yet another search engine combined with a clever graphical user interface.  You pre-set your preferences, and your Panasonic TV searches for content to match them.

And how, exactly, does the TV know it’s you? Thanks to a pop-up camera and face recognition software, the TV comes to life when you stand or sit in front of it and loads up your programs choices. A new remote control provides both swipe control and voice recognition (shades of Samsung 2011!), and seems to work reliably.

Jay Park Presents 600p

Panasonic’s Jay Park fills us in on the 2014 TV lineup details.

Panasonic’s cloud structure isn’t much different than other manufacturers. You can download photos and video and share them with connected tablets and phones in your house. And you can upload your own photos and videos to the same online storage.

Now, to the nitty-gritty. As expected, the 2014 TV lineup is 100% LCD. What’s unexpected, but ultimately not surprising, is that you’ll find a mix of IPS and PVA LCD panels in these new TVs, meaning that Panasonic (like everyone else) is shopping for the best price and performance combination in LCD panels for their new TVs.

Given the cutthroat pricing in the TV market, this isn’t surprising and in fact is a smart strategy: There’s plenty of good LCD glass coming out of Korean, Taiwanese, and Chinese fabs, so why bother with the costs of making it yourself?

Panasonic's 2014 LCD TVs (center) predominantly use PVA glass and are quite improved over the 2013 models (right), holding their own against last year's ZT-series plasma (left).

Panasonic’s 2014 LCD TVs (center) predominantly use PVA glass and are quite improved over the 2013 models (right), holding their own against last year’s ZT-series plasma (left).

 

You can operate the 2014 TVs from an iPad, iPhone, or Android device - even to the level of a full grayscale and color calibration.

You can operate the 2014 TVs from an iPad, iPhone, or Android device – even to the level of a full grayscale and color calibration.

Panasonic’s value-add for these TVs is to improve the spectral response of the white LEDs used in these new sets, and it’s impressive. They’re claiming 98% coverage of the minimum DCI color space and have improved the rendering of yellow.

Side-by-side demos with last year’s award-winning ZT60 plasma TV showed the difference dramatically. Aside from the usual issues with PVA and IPS LCD panels, the images had excellent contrast, great color saturation, and decent black levels – and you can clearly see why plasma has fallen by the wayside.

There will be six series of models in the 2014 TV line-up, starting with the entry-level A400 and moving all the way up to the new 55-inch and 65-inch Ultra HD AX800-series TVs. The new remote and camera system come with three of these lines, and some models now include a sound bar (smart move!) in the box.

HDMI 2.0 and HEVC decoding are standard on the AX800, which is interesting considering how few Broadcom HEVC decoder chips have been deployed by TV manufacturers to date. And you can operate the TV from your iPhone or iPad (or Android device), even to the point of doing a full color and grayscale calibration, thanks to a new app.

So Panasonic remains a player in the TV game, even though the company’s worldwide market share fell out of the top five in 2013. Panasonic’s return to corporate profitability will take a lot of pressure off the TV division, which has relocated to San Diego from New Jersey.

In contrast, Panasonic’s neighbor down the street in San Diego – Sony – continues to struggle with red ink. The company released its final numbers for fiscal year 2013 last Thursday, and things still don’t look good, even though the picture is lightening up a bit.

For 2013, Sony booked a net loss of -¥125B (about $1.23B USD) with operating income of ¥26.5B (about $265M USD). There were a couple of operating divisions that continue to drag down profit, most notably Sony’s discontinued PC business unit, battery manufacturing, and disc manufacturing (DVD, Blu-ray) outside Japan and the U.S.

Sony’s long-struggling TV operations are reported as part of the company’s Home Entertainment and Sound business unit, which recorded a loss of -$248M for FY 2013. That’s actually a 70% reduction from FY 2012, which is a silver lining. Overall, the TV division saw its sales increase 30% Y-Y, which is more good news.

Another bright spot for Sony is its Imaging Products and Solutions (IP&S) division, which booked $256M in operating income. That’s not enough, however, to offset the -$729M operating loss from PC operations and the -$78M loss from the Game division. And an impairment charge of -$250M was assigned to the disc manufacturing business, adding more red ink.

Getting rid of the unprofitable PC business will definitely help next year’s results. (Apparently, so will the sale of Sony’s New York City headquarters on Madison Avenue, which netted almost $700M, according to the company’s financial statement.) The operating loss reported for the Game division (-$78M) was a surprise, but Sony attributed it to costs involved in launching the PlayStation 4 console and a $60M write-off of PC game software titles.

There’s no question that Sony has quite a mountain to climb and get back on the “plus” side of the ledger. Unlike Panasonic, Sony’s worldwide share of television shipments held pretty steadily in 2013 (about 7%, down slightly from 2012), but that number either has to go up or further cost-cutting must take place to make TV retailing worth continuing.

Sony also has to make a decision about its optical disc business unit. The Blu-ray Disc Association (BDA) hasn’t released a standard for 4K yet, while the Digital Entertainment Group’s numbers have shown pretty consistently over the past four years that digital media consumption is shifting emphatically to digital downloads and streaming. Given this trend, it’s not likely that the disc manufacturing unit will ever return to profitability and might also be a candidate for the axe by year’s end.

You know that old saying about the best-laid plans oft going astray? Hmmm…