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Consumer Electronics

Digital technology promises to revolutionize the industry—and stir up more jobs in product development, design and testing

By Janet Anderson

Few industries have had a cultural and economic impact equal to that of the consumer electronics industry, particularly in the past two decades.

The 1998 annual report of the Consumer Electronics Manufacturers Association (CEMA) put it in a nutshell: "Most of the leisure conveniences we blithely take for granted had yet to be invented or developed when today's twentysomethings were born."

Twenty-five years ago, no one had stereos to clip to belts or toss into backpacks. Compact discs hadn't been invented. If you wanted to watch a movie, you had to go to a theater. School reports were typed on a typewriter; research was done in a library. "If you wanted to make a phone call away from home," says CEMA, "you had to use a pay phone; only spies and chauffeured executives had car phones."

And the last few years have seen a new basis for consumer electronics—digital technology. Ever since the invention of chips in the late 1950s, says The Wall Street Journal, engineers have been able to double the number of circuits in a given space on a chip about every 18 to 24 months. By the 1960s and '70s, they could turn everyday information—sounds and images—into the binary, or digital, language of computers. When translated into digital language, disparate types of information can be easily combined for use in personal computers, personal imaging devices, cordless and cellular phones, network access systems and digital "infotainment platforms."

Needless to say, every company that deals in consumer electronics has jumped on the digital bandwagon. The names are mostly familiar one—computer companies like Microsoft, Intel, Silicon Graphics and Sun Microsystems; and consumer product manufacturers such as Motorola, Texas Instruments, Mitsubishi Electric, Samsung, Panasonic and Sony, just to name a few. Even stalwarts from other industries are throwing their hats in the consumer ring. In 1997, aerospace and defense giant Rockwell completed its transformation from a diversified company into one focused primarily on commercial electronics markets.

Perhaps the most promising, as well as the most controversial, of the new products is digital television. Prototypes (with price tags as high as $40,000) produce pictures that are three-dimensional and rich in detail deep behind the camera's main focus point, coupled with crystal-clear sound. The designs for such a product range from a standard television set with movie-screen proportions and superb clarity to a hybrid—a personal computer with a big screen, or a TV equipped with PC software.

Broadcasters and television manufacturers, however, have spent the last decade wrestling with the FCC and each other to set the ground rules for the kind of TV sets and broadcast formats to use when the country switches over to a digital system. The transition to digital TV may be further slowed by inter-industry sniping. Makers of personal computers claim that PC/TV devices being developed will give them a huge new market opportunity because 98% of homes own televisions while only 40% of homes now own personal computers. Television manufacturers, on the other hand, claim that consumers do not want a complex system. "Consumers don't want to boot up a TV and have it crash," says Gary Shapiro, president of CEMA. But Bob Guntz, CEO of Good Guys Inc., a consumer electronics retail chain, thinks interactive television will someday become a way of life. "I think you'll be talking to—or through—the TV," he says. "I don't want to have my picture on the screen when I talk, but my guess is that it will be there someday."

THE FUTURE IS NOW

The 1998 holiday season marked the launch of DTV products and broadcasts. DTV is the digital broadcast standard, adopted in 1996 after more than a decade of development and debate, that will produce vastly better pictures and sound than today's analog systems. A whole new class of video-ready audio and home theater products was developed to simulate the movie theater experience at home. Based on sales of big-screen televisions and hi-fi stereo VCRs, an estimated one in four U.S. households currently has the basic equipment needed to assemble a home theater system. (VCRs, once considered a specialty product, are now commodity items.)

Another commodity, personal computers are growing more and more affordable, and laptop computers are increasing in popularity; about 15% of the American population currently owns a laptop. As of February 1998, about half of all retail computers in the United States were being sold for less than $1,000, compared with just 8% a year earlier, according to California-based industry research firm ZD Market Intelligence. Of the five largest manufacturers of personal computers in the United States—Dell, Compaq, IBM, Hewlett-Packard and Packard Bell NEC—only Compaq has kept up with this trend, a key factor in its increasing growth.

New software products are also spurring growth. IBM now sells a speech-recognition program that will follow voice commands or take down continuous dictation in a word processor. A. T. Cross Co. recently began selling the CrossPad, which allows handwritten notes to be transferred to a personal computer, where they can be converted into typewritten text.

Also rising in popularity, digital cellular communications services became available in the United States in 1996. This year, with the U.S. wireless subscriber base expected to grow to 67 million from 55 million last year, analysts believe that more than half of new subscribers will take digital service rather than traditional analog.

And a phone, wireless or otherwise, is no longer just a phone. In June 1998, the first generation of Internet-enabled phones arrived in the U.S. market. Nokia's 9000I Communicator is a mobile phone with a 11/2 x 41/2-inch screen and accompanying keyboard. It allows Web surfing, e-mail access and faxing, and includes a speaker phone. Cidco Inc. has a conventional phone with a screen from which users can check e-mail and surf the Web without ever booting up their personal computers. Motorola, Mitsubishi Electric, Samsung and Qualcomm have similar products.

Digital technology makes even the most pedestrian devices work more conveniently. Emerson Radio Corp. has produced a $50 clock-radio that will set itself as soon as it's plugged in and the customer selects a time zone. A chip inside—set to the U.S. atomic clock in Colorado when it leaves the factory—is programmed to adjust the clock automatically to daylight and standard time changes as well as leap-year adaptations.

Home entertainment will also continue to benefit from emerging technology. Compact discs, which revolutionized recording in the 1980s with their ultra-clear sound, will soon give way to the DVD, essentially a higher capacity CD that can hold about 10 times as many digital bits. Music producers will be able to create much longer recordings at today's quality, or somewhat longer recordings that are of better quality because more discrete pieces of sound are contained on a disk.

Not to be outdone, video and computer game sales soared 47% to a record $5.5 billion last year. Sega of America, formerly the market leader but currently outsold by Sony and Nintendo, has prototypes for a new machine code-named Dreamcast, set to debut in the United States this fall. Its expected capabilities include a computer CD-ROM drive designed for high speed. At the least, the new generation of computer games is expected to offer links to the Internet for multi-player games and a boost in the realism of game graphics. "In the next 10 years, you will see video games with a level of realism identical to film," predicts Howard Lincoln, president of Nintendo of America.

PLUGGING IN

One would expect all this new development to escalate the need for engineers and computer scientists in the consumer electronics market. In truth, some companies have been losing market share in the intensely competitive personal computer business and are therefore decreasing their work force. According to The Wall Street Journal, Packard Bell NEC will shrink its 5,000-person U.S. work force by as much as 20% by the end of 1999.

However, opportunities for those with engineering degrees still abound. Nokia, the world's largest mobile telephone manufacturer, wants software engineers. Rockwell has a strong desire for more design engineers, as well as industrial, systems, software and mechanical engineers. At Motorola, more than 70% of the engineers are involved in software development; the company is hiring electrical and systems engineers and computer scientists. Panasonic (a participating company of Matsushita Electric Corporation of America) lists a need for hardware, product and TV/video engineers at locations across the country on its Web site (www.panasonic.com). Similarly, Sony Electronics' site (www.sel.sony.com) posts openings in computer science and hardware, software and applications engineering.

Janet Anderson is a free-lance writer living in Princeton, N.J.

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