DIGITAL

CTA.tech/i3 $995
A SPECIAL SUPPLEMENT TO

AMERICA
State of the U.S. Consumer Technology Industry 2017
 SAVE DATE
INNOVATORS JAN. 9-12, 2018

ALWAYS THINK AHEAD.

2 Digital America 2017 Las Vegas, NV | CES.tech | #CES2018

Consumer Technology Association
1919 S. Eads Street
Arlington, VA 22202
Tel: 703-907-7600
email: CTA@CTA.tech
CTA.tech
CES.tech
©2017 Consumer Technology Association (CTA)
May be reproduced in part, provided credit is given to CTA
A Special Supplement to It Is Innovation (i3) Magazine
Contributors:
Gary Shapiro,
CTA president and CEO
Jeff Joseph,
COVER IMAGE BY: KASHA_MALASHA
senior vice president
Cindy Loffler Stevens,
senior director, publications
Mark Chisholm,
senior manager, publications
Jeremy Snow
coordinator, publications
Jenni Moyer,
director, marketing
2017 DIGITAL AMERICA
STATE OF THE U.S. CONSUMER
TECHNOLOGY INDUSTRY
TABLE OF
CONTENTS:
The Connected World 3
CTA Technology & Standards 6
CTA Market Research 8
2017 CTA Leadership 10
Accessories 14
Audio 22
Digital Imaging 40
Gaming 52
Health and Fitness Technology 60
Home Theater 66
TechHome 84
The Future of Vehicle Technology 90
Video 96
Wireless 116
Chronology: CT Milestones 123
Industry Sources 144
Contributing Editors:
Jim Barry
Jeff Berman
The Consumer Technology Association (CTA)TM is the trade association
Robert Calem
representing the $292 billion U.S. consumer technology industry, which
Mark Chisholm supports more than 15 million U.S. jobs. More than 2,200 companies – 80
Joe Palenchar percent are small businesses and startups; others are among the world’s
Alan Richter best known brands – enjoy the benefits of CTA membership including
policy advocacy, market research, technical education, industry promotion,
Bill Schiffner
standards development and the fostering of business and strategic
Murray Slovick relationships. CTA also owns and produces CES® – the world’s gathering
Greg Tarr place for all who thrive on the business of consumer technologies. Profits
Stewart Wolpin from CES are reinvested into CTA’s industry services.
Digital America 2017 1
THE
CONNECTED
WORLD
T
he steady drumbeat of the digital transition has
created an installed base of more than a half-
billion broadly-defined “computing” devices in
homes, vehicles, pockets and purses. Now, a symphony
of innovation is driving a new generation of digital
products that attach to, connect with, enhance or
repurpose many of these existing devices.
In a year when technology played a key role in
a tempestuous presidential election, this disruptive
consumer technology industry enjoyed another strong
year. While a cursory glance at sales shows that 2016
retail revenues were flat at $288 billion, a closer look
shows continuing strength in traditional product
categories, with significant increases and bright promise
in emerging product areas. The Consumer Technology
Association (CTA)™ forecasts 2017 retail sales at $292
billion.
For the past several years a rising few core categories
— smartphones, tablets, TVs and computers — have
driven the industry to new heights, accounting for more
than half of all revenues. But in 2016, that share dipped
to 48 percent. Nevertheless, innovation continues to
drive the industry. Sales statistics for 2016 reveal that
without emerging innovative categories there would have
been a slight decline in sales of about one-and-a-half
percent. But new product segments contributed some
PINKYPILLS

$20 billion to the total, resulting in the slight increase.

Next year those new categories are expected to account
for an even greater share, growing to some $26 billion.

Digital America 2017 3

 THE CONNECTED WORLD
Consumer Technology
Wholesale Revenue
(billions)
$228.49
$225.09
$223.45
$218.77
$210.63
‘13 ‘14 ‘15 ‘16e ‘17p
Source: CTA Market Research
We’ll highlight a few categories here, then detail the
strength and regenerative power of the consumer
technology industry in the pages of this year’s Digital
America — where mature categories continuing strong
sales on high plateaus, while new sectors blossom.
Americans’ prodigious appetite for new TV sets
continued in 2016, spurred by new display technology and
better-than-ever prices. Television continues to evolve and
again showed strong sales approaching 40 million units.
But it still suffers the historical curse of the industry. Those
declining prices consumers like so much put enormous
pressure on margins for manufacturers and retailers.
The latest technology, 4K Ultra High-Definition, showed
impressive growth to more than 10 million units, but also
saw average unit prices begin to slide.
Perhaps the biggest change in television in recent years
hasn’t been in display technology, notwithstanding the
terrific gains there. Delivery of programming is where
the real action has been with internet-delivered programs
putting pressure on traditional over-the-air, cable, satellite
and phone-line delivery. There’s a demographic element to
this transition with millennials in the vanguard of the cord-
cutting movement.
Digital imaging is another category that continues to
reinvent itself with new devices to capture memories in
all types of settings. Digital camera sales peaked early
in this decade selling some 37 million units contributing
more than $7 billion to the industry totals before the full
impact of the smartphone camera began to be felt. In 2016
digital imaging sales fell again to 13.6 million units for
$8.3 billion while average unit price rebounded to $289
thanks to a trend toward full-featured units for serious
photographers. Innovative formats for digital imaging –
4 Digital America 2017
action camcorders, 360-degree models and units designed
specifically for live streaming – are still in growth mode
with action camcorders exceeding 2.5 million unit sales
worth $496 million.
Another emerging area — connected home technologies
including smart thermostats, locks, lighting, motion
sensors — continued to surge to more than $2.24 billion
in revenues in 2016 with unit sales rising to almost 18
million. Smart home tech has been jump-started in recent
years by advances in wireless technology, enabling simple
connections without major structural home renovations.
Fitness wristbands and smartwatches still represent the
lion’s share of $5 billion-plus sales of wearable technology
but the category has moved to a wide variety of devices
including clothing to monitor health and fitness – even
our sleep!
The audio marketplace, disrupted as much as any
product category by the march of digital technology, is
once again one of the most interesting with new product
areas growing to replace diminished sales in others. The
wireless headphone juggernaut continues its roll with sales
exceeding $2.2 billion in 2016 while wireless Bluetooth
speakers are now in more than 40 percent of households
and are expected to surpass $1 billion in sales in 2017.
Soundbars surpassed the $1billion mark for the first
time, a strong contribution to $3.3 billion in audio sales
in 2016. And in a “back to the future” moment, turntable
sales reached $200 million to accommodate the renewed
interest in vinyl albums.
Hi-res audio – making full use of the digital realm to
reproduce the type of sound appreciated by discriminating
listeners — is starting to make headway too with sales of
hi-res-capable receivers, speakers, headphones and other
gear.
The smartphone continues to be the leader in unit
and dollar sales, growing to nearly 180 million units
worth more than $54 billion. Fewer than 20 percent of
all wireless phones purchased last year were standard
models as compared with smartphones. In the decade
since the iPhone was introduced, the smartphone (and the
apps enabled by it) has transformed the world with new
uses. Smartphones, tablets and laptops are the preferred
means for people to access the internet, but the desktop
PC market is stubbornly persistent, showing modest sales
growth in 2016.
The marriage of action camcorders with flying robots
juiced the drone market which in 2016 exceeded two
million units with revenues nearly doubling to $800
million and expected to pass $1 billion in 2017. Whether
commercial applications like photography, farming or real
estate, or just-for-fun consumer uses, the drone came into
its own in 2016.
Video gamers didn’t have to wait the typical five years
for their next game console with updated versions of Xbox
from Microsoft and PlayStation from Sony arrived in 2016
with, among other improvements, an emphasis on virtual
reality. Nintendo introduced its next gen game console in
early 2017, and the 40-year-old video game market seems
more vibrant than ever appealing to players of all ages.
Top automakers now introduce new cars at CES with
vehicles described as the platform for consumer technology.
Meanwhile the aftermarket for in-vehicle tech equipment
continues to struggle despite the arrival of some new
applications including rear-view and dashboard cameras.
Aftermarket autosound sales fell below $1 billion as
factory-installed tech grew to more than $15 billion.
The real action in automotive is the growth of electric
vehicles of all types and the accelerating approach
of self-driving vehicles. Just a few years ago at CES
driverless cars seemed a distant dream, but now they’re
here and combining with the sharing economy for a true
transportation revolution.
With the growth of mobile devices so too has the
consumer tech accessories market grown to where it’s
totaled more than $9 billion for each of the past three
years. IoT devices promise to bring another generation of
accessory devices in the coming years.
Perhaps the biggest growth potential going forward
is represented by the technologies contained in 2016’s
breakout hit — Amazon Echo aka “Alexa.” Joined late in
the year by Google Home “Hey Google,” Echo combines
two of the most difficult applications in the tech world
— voice recognition and artificial intelligence. Voice
recognition has made remarkable strides in the past few
years so that the technology can now approximate the
capabilities of human hearing.
Last year’s election season was a challenge to everyone
including CTA’s government affairs staff. CTA’s policy staff
is charged with keeping legislators and regulators up to
speed on the innovation economy and the need for sensible
regulations that don’t stifle the development of new
products and technologies and the businesses that bring
innovation to market.
Trade, immigration, spectrum allocation and patent
policy are prime issues for the tech industry and are sure to
get attention from the new Congress and administration.
Drones, self-driving cars and the sharing economy
are issues that are expected to be in the forefront in
Washington and state capitals across the nation and require
considerable education for those charged with regulating
them. CTA’s Innovation Movement is the grassroots
campaign designed to encourage action by consumers to
help educate their legislators to foster innovation and not
to build roadblocks to progress.
CTAPAC, the association’s non-partisan political
action committee, enables the association to promote the
innovation agenda with a strong voice and contribute to
candidates who support CTA’s issues.
Reflecting on 50 years of CES at this year’s #CES2017
in Las Vegas, some industry veterans noted the similarity
in the contemporary raft of emerging technologies poised
to take hold in the market — IoT, self-driving vehicles,
5G, robots, drones, wearable tech etc. — with the tech
landscape in the early 1980s when personal computers,
video games, VCRs and an array telecommunications
devices were just taking the stage.
Now, we’ve entered new era where existing products
are being transformed, new products are emerging and
a “smart,” connected, wearable, augmented, virtual,
autonomous digital age is coming into its own.
Gary Shapiro
President and CEO
Consumer Technology Association
Digital America 2017 5
 CTA TECHNOLOGY & STANDARDS
W
hen people in the industry hear CTA
Technology & Standards, they often think of our
accredited standards program that has existed
for decades and resulted in Emmy-winning standards and
interoperability across millions of devices. We are equally
proud of CTA’s technology projects including our growing
work on IoT device security and video streaming.
Leading CTOs and engineering executives participate
in CTA’s Technology Council, which oversees our
most forward-looking projects. Under this group, CTA
developed an online security assessment tool to help
companies measure the maturity of their software security
teams. The council is actively investigating self-driving cars
and the ways technology can help people lead engaging
and active lives as they age.
On the standards front, nearly 1,200 technical experts
from the industry are involved in CTA committees creating
standards that describe how to design, build or test things
using common terminology, processes or procedures.
CTA works closely with the leading television standards
organizations, such as ATSC, MPEG and SMPTE to
ensure that TVs are energy efficient, support the latest 4K
Ultra HD features and work with the latest videos sources
from Blu-ray to ATSC 3.0. We have significantly ramped
up standards for health and fitness devices and are doing
groundbreaking work on sleep monitoring, step counting
and heart rate measurement. CTA standards are on the
move too, including our first drone standards and multiple
standards for aftermarket automotive products.
Participation in standardization efforts is free for
CTA members. Taking advantage of this benefit provides
members with insider knowledge and early access to key
6 Digital America 2017
Order CTA Standards
from Techstreet
CTA members get a 25 percent discount when
purchasing individual CTA standards and bulletins
from Techstreet at 800-699-9277 or 734-780-8000,
or by visiting techstreet.com. Receive your CTA
member discount by using coupon code CTA2017.
process and application information, supporting innovation
and the development of new products. For a complete list of
CTA standards, current projects and information on how to
get involved, visit standards.CTA.tech.
International Web Video Interoperability
Program (WAVE Project)
Commercial web video, also known as over-the-top video,
suffers from marketplace fragmentation. Differences in
technologies used, and differences in applying each of
those technologies, cause inefficiencies at both ends of the
internet. Content providers must create multiple versions
of a piece of content, such as a movie, in order to support
the different types of consumer devices. On the device side,
JAMESTEOHART
manufacturers must sit down with major content providers
to work out the technical details of operating with each
service. The “long tail” of content obviously does not get
this kind of service and may be lost in the process.
 A single, interoperable means for content suppliers to
package internet video and for devices to interpret that
package, with common agreement on what features devices
support, would significantly reduce the fragmentation
problem.
The WAVE Project at CTA has brought together more
than 60 companies in the over-the-top commercial video
ecosystem. The WAVE Steering Committee roster includes
Adobe, Akamai, Apple, Comcast/NBCU, Google, LG
Electronics, MLBAM, Microsoft, Qualcomm, Samsung,
Sky, Sony, Starz, T.P. Vision and WWE. More than 140
engineers have been meeting and working out details of
this interoperability, often reaching out to other industry
groups around the world to coordinate efforts. The
first technical documents from the WAVE Project was
published in Q2 2017.
New Health & Fitness Standards
The Health & Fitness Technology Subcommittee produced
its first standards in 2016. The Sleep Monitors Working
Group published its first standard, providing definitions
and characteristics for wearable sleep monitors to provide
consistency in the understanding of sleep monitor functions
in wearable technology. Work is underway on a standard
outlining the recommended performance requirements for
sleep monitors. The Physical Activity Monitoring Standards
working group published its first standard creating
definitions and performance criteria for measuring step
counting on consumer wearable or app-based consumer
devices. Work is being conducted to create definitions and
performance criteria for consumer technology that measures
heart rate or related parameters. Future efforts may include
measurement of moderate to vigorous physical activity, as
well as consideration of data requirements from a physician’s
point of view. The Health and Fitness Subcommittee is
working closely with CTA’s Health & Fitness Technology
Division.
Helping People Hear Again
The Food and Drug Administration regulates hearing
aids as medical devices. There is another class of
lower cost and less-regulated devices called Personal
Sound Amplification Products (PSAPs), which could
benefit millions of people who cannot afford and do
not need prescribed hearing aids, provided the quality
of these PSAPs is high enough. CTA’s Personal Sound
Amplification Working Group responded by creating
its first standard ANSI/CTA-2051, Personal Sound
Amplification Performance Criteria, which identifies
target values for consumer products providing personal
sound amplification or enhancement to users. These
minimum performance criteria for PSAPs will help ensure
consumers can identify high-quality PSAPs and avoid
underperforming products.
Serial Numbers for Drones
The Small Unmanned Aerial Systems Working Group is
working on a new standard explaining a unique serial
number for unmanned aerial systems (drones). Members
of the working group are collaborating on procedures
pertaining to the acquisition and regulation of these unique
serial numbers.
Powering VoIP During Emergencies
Traditional analog home phones are powered from the
central office, which is why your old landline phone
worked even when the power went out. New Voice over
IP (VoIP) phones that use an internet connection need
local power in your house. The FCC changed its rules to
make sure consumers will have an option to buy back-up
batteries for VoIP phone systems. The VoIP Battery Backup
Working Group was created in 2016 to address these
changes to Part 12 of the FCC’s rules. Work is ongoing to
create a standard addressing how providers can provide
battery backup power of facilities-based fixed, residential
VoIP service in the event of a power outage.
Shape the Future of the CT
Industry: CTA Technology &
Standards Forums
CTA hosts Technology & Standards Forums to
bring together leaders who develop standards to
shape the industry’s future. These forums provide
a common venue for technology professionals
to share ideas and chart strategy for future
innovation. CTA helps grow the influence of
industry alliances through networking events,
joint meetings and speaking opportunities at
CTA Technology & Standards Forums. Attendees
debate, develop and finalize crucial consumer
technology standards using CTA’s streamlined
standards development process which is accredited
by the American National Standards Institute
(ANSI).
Join CTA in San Diego, CA
September 27-29, 2017.
For details visit standards.CTA.tech.
Acronyms
ATSC Advanced Television Systems Committee
FCC Federal Communications Commission
PSAP Personal Sound Amplification Product
SMPTE Society of Motion Picture & Television Engineers
VoIP Voice over IP
Digital America 2017 7
 CTA MARKET RESEARCH

Charting the Industry

Industry Sales Data
CTA market research focuses on the $292 billion
consumer technology (CT) industry to help members
make informed business decisions. CTA’s comprehensive
CTA delivers industry sales statistics — past,
research includes industry sales statistics, forecasts,
present and future — in the following reports:
economic analysis and consumer data that is valued at
more than $1 million annually.
The technology community, financial markets,
• CTA MarketMetrics – Monthly and quarterly
reports monitor the health of the U.S.
the media and economists all rely on CTA’s industry
consumer technology industry through product-
knowledge. CTA member companies can access
oriented reports that track shipment volumes
CTA’s research library staff, publications, webinars,
and revenues.
presentations and research events all year.
• Consumer Technology Extended Forecasts –
Published twice a year, CTA’s most detailed
Economic Analysis
sales and forecasts report provides a five year
CTA provides insights into economic trends impacting CT
outlook on hundreds of products and features.
businesses through presentations and webinars, as well as
through the CTA Consumer Sentiment Index, a monthly
• U.S. Consumer Technology Sales and Forecasts
– Based on the Extended Forecasts and CTA
report that measures consumer confidence in the economy
MarketMetrics, this report offers a high level
and the outlook for technology spending, which CTA has
look at sales trends in the CT industry, with
been tracking since January 2007.
data covering five years past and one year
forward. Published twice a year.
Research Releases
• 19th Annual Ownership & Market Potential Study • Historical Consumer Technology Sales Data – A
comprehensive database of factory unit and
• 15th Annual State of the Home Tech Builder
dollar sales, average wholesale price and
• CES Asia Research
household penetration rates across more than
• VR Focus Groups
80 categories of consumer technology products.
Forecasts and Market Reports
• The CTA Research Library synthesizes CTA
Market Research and other sources so
• CTA MarketMetrics Quarterly Outlook Q4 2016
members can make the best business decisions.
• U.S. Consumer Technology Sales and Forecasts Release

8 Digital America 2017


CTA’s Research Summit at CES 2017
The 7 annual Research Summit at CES 2017 was a
th
premier event with more than 2,300 attendees over two
days. Programming addressed key CES trends like the
Internet of things (IoT), home entertainment, holiday sales,
automotive technology, the sharing economy, augmented
and virtual reality, artificial intelligence, smart cities,
mobile commerce and the smart home.
Consumer Technology Association Publications
CTA provides members with the latest technology and
industry news and information.
It Is Innovation (i3) – CTA’s
flagship magazine focuses on
innovation in technology, policy
and business as well as the startups
that grow the consumer technology
industry. i3’s content is also
available at CTA.tech/i3.
Five Technology Trends to
Watch – Published annually, Five
Techs uses the latest CTA market
research and analysis as well as
third-party research to predict
which products and services will
transform consumer’s lives.
Consumer
Research
CTA also produces more than two dozen
reports each year. Recent and Upcoming
Releases:
• The Evolution of Smart Cities and
Connected Communities
• Wearable Health and Fitness
Technology in U.S. Medical Care
• Short Form Video: A Rising Norm of
Digital Consumption
• Smart Home Device Shopping (Retail
Board Research)
• Commercial & Recreational Drones:
Consumer Perception & Adoption
• TV Default Settings
Research Library
CTA’s team of professional librarians is a valuable member
resource, fielding the most challenging requests using CTA
research as well as third-party sources. Contact the CTA
Research Library at 703-907-7763, or via email:
info@CTA.tech.
Webinars, Presentations and Events
CTA Market Research webinars and presentations are led
by experts with insights into the latest industry research
and trends, including seasonal updates, political events and
economic overviews. CTA’s webinars are free to members
and can be accessed for a fee by non-members.
CTA Corporate Report –
Highlights CTA’s initiatives
and programs during the
year.
Consumer Technology Association
Blog – The CTA Blog covers CTA
initiatives, relevant issues and
research, as well as industry trends.
CTA SmartBrief – This free, daily e-newsletter provides
a summary of the top tech news stories to keep insiders
informed.
Digital America 2017 9
 EXECUTIVE
LEADERSHIP

ETERNALCREATIVE

10 Digital America 2017

 2017 Consumer Technology
Association Executive Board
Chair I ndustry Division Representative
David Hagan Executive Advisor John Penney
Chairman and CEO Patrick Lavelle EVP, Product Strategy &
Boingo Wireless President and CEO Consumer Business
VOXX International Development
Corp. Twentieth Century Fox

Vice Chair DEB Chair President and CEO

Mike Fasulo David Inns Gary Shapiro
President and COO CEO CTA
Sony Electronics Inc. GreatCall

Vice Chair DEB Vice Chair Treasurer

Randy Fry Eliott Peck Glenda MacMullin
President Executive Vice President Chief Operating Officer/
Fry’s Electronics & GM Imaging Chief Financial Officer
Technologies and CTA
Communications
Immediate Past Chair Canon USA Inc.
Daniel Pidgeon Chairman and CEO
Chairman Canon Information
Starpower Technologies Services

 ivision
D Secretary
Representative Jacqueline Black
Jim Mault Manager, Executive
VP and Chief Office
Medical Officer CTA
Qualcomm Life

At-Large Members
Mike Dunn Laura Orvidas Fredrick Towns
President of Product Vice President, President
Strategy and Consumer Consumer Electronics New Age Electronics, a
Business Development Amazon Division of SYNNEX
Twentieth Century Fox Corp.

Bridget Karlin Steven Tiffen

CTO and VP President and CEO
IBM GTS Technology, The Tiffen Company
Innovation &
Automation

Digital America 2017 11

 EXECUTIVE LEADERSHIP

2017 Consumer Technology

Association Board of Industry Leaders
Ty Ahmad-Taylor Jim Braun Bob Fields
VP, Product Marketing President and CEO President and CEO
Facebook Dual Electronics Corp. Beacon Technology
Group

Melissa Andresko Jim Buczkowski Ron Freeman

Communications Henry Ford Technical Chairman
Director Fellow & AAMP Global
Lutron Director, EE Systems
Ford Motor Company

Itai Ben-Gal Scott Burnett Deena Ghazarian

CEO Managing Director, Senior Partner
iRule Global Consumer TargetPath
Electronics Industry
IBM

Brett Beveridge Lee Cheng Denise Gibson

President Co-Founder and
The Retail Outsource Chairman
Ice Mobility

Craig Birmingham Henry Chiarelli John Godfrey


VP & GM CE, Retail, & EVP, Industry Relations Senior Vice President,
eCommerce Reseller Gibson Brands Public Policy
Channels Samsung Electronics
Ingram Micro America

John Boris Kristen Cook Joellyn Gray

CMO Managing Director New Business Director
Shutterfly BDS Marketing Fujifilm North
America

John Bosch Matthew Diamond Ximena Hartsock

President and CEO Chief Medical Officer Co-Founder
Grand Destiny Nokia Technologies Phone2Action

Jeff Bradly Andy Fathollahi Robert Heiblim


Senior Vice President, Founder and CEO Principal
Devices Incipio BlueSalve Consulting
AT&T and Interim
Management

12 Digital America 2017

Eric Hsia Ken Lowe John Shalam
Venture Partner/Senior Co-Founder and Vice Chairman and Founder
Adviser President VOXX International
TransLink Capital VIZIO Inc. Corp.

John Ivey Mike Mansuetti Jake Sigal

President and CEO President Founder and CEO
MiTek Corp. Robert Bosch LLC Tome
AtlasIED

Russ Johnston Steve McIrvin Sean Stapleton


EVP, Marketing, Product CEO President and CEO
Planning & Corporate Autel Robotics USA Warrantech Corp.
Communications
Pioneer Americas
Pioneer Electronics
(USA) Inc.

Henry Juszkiewicz Jay McLellan Joe Stinziano

CEO Vice President, Energy Executive Vice
Gibson Brands Inc. Management, Controls President, Consumer
and Automation Business Division
Leviton Samsung Electronics
Manufacturing Co. Inc. America

Dave Keller Michael Moskowitz Erich Sullivan


VP Sales – North President Director
America Panasonic Canada Inc. Sam’s Club
Vantage Controls & Panasonic Consumer
Electronic Company
(Americas)

Omar Khan Henry Muyshondt Doug Webster

Executive Director Vice President, Global
Enseo MOST Cooperation Marketing and Corporate
Communications
Cisco Systems

Sally Lange Derek Pace Gary Yacoubian

Vice President Owner President and Managing
National Retail Certified Sounds LLC Partner
Sprint Specialty Technologies/
SVS

Noel Lee Carmichael Roberts Tim Yerdon

 
Head Monster Partner Global Vice President -
Monster Inc. North Bridge Venture Marketing &
Partners Communications
Visteon Corp.

Mara Lewis Paul Sabbah

CEO and Co-Founder President
GrowthX Corporate Stamford International
Inc.

Digital America 2017 13

 ACCESSORIES
Top Trends
•  ccessories for the latest wireless phones continue
A
to lead the accessories market, driven by strong
demand for new smartphones.
•  he most in-demand wireless accessories are
T
cases, as well as portable power devices and
chargers.
•  ales of controllers and other video game console
S
accessories are likely to grow behind sales of new
systems including Nintendo Switch.
•  irtual reality (VR) device market growth is expected
V
to drive sales of VR headsets for video game
consoles, wireless phones and computers, as well
as new kinds of accessories.
• Increased interest in augmented reality (AR) may
give wireless phone accessories an even bigger lift
in 2017.
•  omputing accessories stand to be helped by
C
Wi-Fi mesh routers as consumers look to improve
internet access in their homes.
•  he market for tablet, traditional digital camera and
T
MP3 player accessories continues to shrink.
•  ne bright spot for tablet accessories: keyboards
O
for iPad Pro and other tablets categorized as
professional.
•  V antenna sales may grow as more consumers
T
cut the cord (or at least shave the cord) from pay TV
services.
•  onsumer drone market growth could be weaker
C
in 2017, but should still drive emerging market for
drone accessories including camera mounts and
propeller replacements.
• Increased demand for connected car accessories.
ONEINCHPUNCH

• Potential demand for 3D printer accessories.

• Increased demand for smart home devices and
accessories for them, including motion and water
sensors.

14 Digital America 2017

Digital America 2017 15
 ACCESSORIES
T
he main takeaway for the U.S. consumer technology
accessory market in 2017 is that trends similar to
what we saw in 2016 are expected to continue across
most product categories.
The entire U.S. consumer technology accessories and
media market, including batteries, blank media, pet tech and
unmanned systems (drones and home robots), is projected
by CTA to grow 2.82 percent in 2017 to $24.32 billion
from an estimated $23.65 billion in 2016. That represents a
slight improvement from the 2.16 percent increase that was
seen in 2016.
Stripping out batteries, blank media, pet tech and
unmanned systems, consumer tech accessory sales is
projected to grow only 0.36 percent in 2017 to $9.30
billion. That would be only a slight improvement over the
0.31 percent growth that was seen in 2016 compared to
2015.
The Main Growth Drivers
As usual, sales of consumer tech accessories in 2016 closely
mirrored the performance of those devices they attach with
and that’s expected to continue in 2017. So devices that
remain in heavy demand, like smartphones, are continuing
to drive demand for those accessories.
Accessories for mobile phones, including TOTAL CONSUMER
cases, were the largest contributor to total tech TECHNOLOGY
accessory revenue in 2016 and again, will be ACCESSORIES
the most significant contributor in 2017. U.S. Sales to Dealers
(millions)
Standout accessory trends for 2016 included
strong demand for mobile device cases, power
and charger products for portable devices,
and increased demand for antennas as more
consumers cut – or at least shaved – the cord 2013
from their pay TV services, according to
Steve Koenig, CTA senior director of market 2014
research.
“From a volume standpoint, cases are the
2015
major player in the accessory sector once again,
simply because pretty much everybody with a
2016e
tablet or a phone – I mean even a laptop – has
got to have a case to go with that, whether it’s
2017p
to protect the device or just to carry it in,” he
says.
A potential growth driver for cases,
meanwhile, is the popularity of slimmer, Includes: TV, home theater
and audio, digital imaging,
“wallet-style, kind of bi-fold” wireless phone wireless phone, video game
cases where users can keep a couple of credit and computing accessories
cards, a driver’s license and cash, he says, Source: CTA Market Research
noting this can decrease the number of items
we need to carry around with us. “Instead of shoving your
phone in your front packet and your wallet in your back
pocket, people are just saying: ‘Well, really all I need is some
cash, a credit card and my ID, so I just put that in my phone
case that opens like a wallet and I’m good to go.’”
16 Digital America 2017
He adds that in some cases, consumers don’t even need to
carry around a credit card thanks to Apple Pay and similar
mobile payment options that can be used at a number of
businesses.
Demand for power and charger products has been
notably strong as well. As part of CTA research conducted
last year, 23 percent of tech consumers polled said they
planned to buy portable battery chargers as a gift this past
holiday season.
“We’re seeing double-digit increases” in shipments of
portable power devices for wireless phones, Koenig adds.
CTA expects about four million units of the power devices
will ship in the U.S. during 2017, which would be a 10
percent increase from 2016, he says. That’s after shipments
grew 16 percent to about 3.6 million units in 2016. In dollars,
CTA expects portable power sales will grow to $105 million
this year – a six percent increase from $99 million in 2016.
The latter was an 11 percent gain from $89 million in 2015.
Also possibly having an impact on the sale of wireless
accessories is the fact that consumers tend to change to a
new model phone every 18 months or so on average, down
from 24 months in the past, Koenig says. That has happened
as service providers move away from two-year contracts
and, in the case of Apple, consumers can
now pay a monthly fee and get a new
phone each year, he notes. While some
consumers are switching phones every 12
months, others are keeping them longer
because the smartphones keep getting
better, Koenig says.
The Cord-Cutting Factor
$8,447 In the audio and video accessory category,
meanwhile, there’s “strong single-digit
9,183 growth” being seen in the U.S. for TV
antennas, Koenig says, noting sales are
expected to increase to about eight million
9,237
units this year from about 7.5 million in
2016. That’s seven percent volume growth
9,268
for each year, he says. Antenna revenue
is expected to grow to $123 million this
9,299
year from $113 million in 2016 – a nine
percent rise, he says. That’s after only a
five percent rise in 2016 from $107 million
in 2015.
Whether consumers are cutting the
cord entirely, or merely shaving the cord,
“households are adding over-the-air to
their TV viewing” options, he notes. And
that is a sales driver for antennas. After all, “it would be rare
indeed for a household to have an antenna and then also
subscribe to say DISH Network and then also have Netflix
and Hulu,” although “I’m sure there are some households
like that,” Koenig says.
 A growing number of households are finding it
increasingly appealing to just subscribe to a “skinny
bundle” of TV networks – like DISH’s Sling TV – that
costs less than a traditional pay TV service, he says.
Other Notable Trends
Also “relevant” is that consumers are continuing to add
controllers and other accessories for the new video game
consoles they own, Koenig says.
Controllers have long been popular accessories for
consoles because the systems tend to come with only one
controller, forcing consumers to buy at least one more
controller separately if they want to play a game with a
friend or family member.
While the latest Microsoft and Sony consoles – the
Xbox One and PlayStation 4 (PS4) – each shipped in
late 2013, each manufacturer shipped enhanced versions
of their game systems in 2016. Microsoft is preparing
to ship another revised version, dubbed “Xbox One X”
and offering 4K gameplay, in late 2017. Most of the
new versions of their consoles were designed to take
advantage of 4K and high dynamic range.
Nintendo, meanwhile, shipped a new hybrid home
video game console and portable game system in March
this year – the Nintendo Switch, which got off to a
promising start. The company is hoping that it performs
better than its last console, the Wii U, which failed to
match the strong demand for its Wii.
How strong video game accessories perform in
2017 will depend on how well Switch and the revised
Microsoft and Sony consoles perform. Despite strong
initial demand, however, Switch isn’t expected to be
available in adequate enough supplies to meet consumer
demand for much of 2017, so that stands to cut down
on the chances for significant Switch accessory sales for
this year.
Meanwhile, consumers are interested in buying
keyboards for the Apple iPad Pro to make them more
like the Microsoft Surface line of tablets that come with
keyboard covers, Koenig says.
Despite that bright spot in the tablet category,
however, “tablet sales have been declining from their
peak in the 2014-2015 period,” he says, predicting
tablet sales will decline five percent in units, to 58-59
million, in 2017 after dropping seven percent to just
over 62 million in 2016. Tablet volumes are expected to
continue dropping in the low single digits due largely to
“saturation,” he says, noting that a little over 50 percent
of U.S. households already own a tablet.
Another factor is the growth of hybrid computing
devices that can be used as both laptops and tablets, he
points out. At the same time, smartphones keep getting
more powerful, while their screens keep getting larger
and closer to the size of some tablets.
Although many people still travel with a computer,
smartphone and tablet, by 2020 that will likely decline to
only two devices, Koenig predicts.
An Alternate but Similar Take
NPD analyst Ben Arnold had a similar take on the U.S.
consumer tech accessory market as a whole in 2016.
“Mobile accessories continue to be very important” to
the consumer tech market, Arnold says. But mobile phone
and tablet accessories combined were down about 10
percent in dollars in 2016 from 2015, he adds, citing NPD
data. (Although CTA categorizes tablet accessories under
computing accessories, NPD combines tablet accessories
with wireless phone accessory sales.) According to NPD’s
data, mobile phone accessory sales alone declined seven
percent to $3.5 billion in the same period, Arnold adds.
One factor was “stagnation” in smartphone sales,
which have “kind of leveled off,” he says adding, “The
market’s matured. You’ve got fewer and fewer first-time
adopters now. I think that’s probably leading to some of
the malaise in mobile phone accessories.”
Arnold predicts there will be a “rebound” in mobile
phone accessory sales in 2017, driven by factors including
changes in phone plans that are freeing consumers up
to switch to newer smartphone models sooner. Another
possible factor could be the continued growth of mobile
phone screen sizes, he says, pointing out a case can be
made that “it’s easier to break a phone with a bigger
screen,” and so that might give phone protection
accessories a sales lift.
“I would not expect a seven percent decline in 2017. I
think it’s probably slightly up – maybe one or two percent –
to slightly down maybe three percent” this year, he says of
mobile phone accessory sales.
What could “certainly change things” even more for the
better would be a new iPhone later this year, especially if
Apple offers some major enhancement with it, Arnold says.
Strengthening sales from Google’s Pixel phone could also
provide some upside to wireless phone accessory sales this
year, he adds.
Continued Tablet ‘Drag’
The relative stability of mobile phones and accessories for
them was, meanwhile, not enough to offset what Arnold
says was a “drag” from products including tablets last
year. Sales of tablets continued to slow in 2016, declining
about 13 percent in revenue, he says, noting that sales
clearly had an impact on tablet accessories.
Sales of tablet cases – the largest contributor to tablet
accessory sales – tumbled 27 percent in 2016, he says,
citing NPD data. Sales of tablet accessories other than
cases grew 43 percent in 2016 to $450 million, he says.
That could have been driven by the introduction of the
iPad Pro and other new tablets in the “professional
Digital America 2017 17
 ACCESSORIES
segment” of the market and demand for accessories that
can be used with devices like those including stands and
styluses, he says.
The decline in tablet sales “softened as the year went
on” in 2016, “so perhaps there’s some upside” for 2017
when it comes to tablet accessory sales, he says. That
upside could come especially from the pro side of the
tablet market including tablets with larger screen sizes.
“I’m not sure that it goes positive, but I think that the
tablet case market will track pretty similarly to what we’ll
see in tablets” this year, he says. He predicts that tablet
case sales may decline somewhere in the 10 to 15 percent
range in 2017. That, of course, would be a relatively
promising improvement.
More Challenges
While consumers will likely continue to buy cases for
their mobile devices, it’s questionable how much they will
be willing to spend on those accessories, Arnold says.
“You can buy a lot of low-cost stuff on Amazon” to
protect your mobile devices today, and that may be good
enough for many consumers, Arnold points out. “An $11
case, if you can get by and not break your phone, ends
up being as good as a $50 case,” he says. As a result, the
average selling price of cases may decline, he notes.
“That may be the big challenge for the market,”
Arnold says. Another potential challenge: If we continue
to see soft sales of mobile devices, he adds.
Challenges continue to abound, meanwhile, in the
digital imaging market, which continues to be hurt by
the rise of smartphones and continued improvements in
smartphone cameras.
Sales of digital imaging accessories (lenses, filters,
adapters, caps, cases and straps) fell five percent in 2016
to $700 million, Arnold says, citing NPD data. But he
called that a “much softer” decline than the drop in
digital camera sales.
It’s “more of an enthusiast market” than a consumer
accessory market, Arnold says, pointing to the decline
that’s been seen in “point-and-shoot” cameras costing
$100 or less. On the other hand, digital cameras costing
Total Unmanned Systems Drones
U.S. Sales to Dealers (millions) U.S. Sales to Dealers (millions)
2013 $240 2013
2014  371 2014
2015 644 2015
2016e 1,060 2016e
2017p 1,486 2017p
Source: CTA Market Research Source: CTA Market Research
18 Digital America 2017
$1,000 and more continue to see sales growth and people
are buying accessories for them, he says.
As a whole, the digital camera accessory market has
been “fairly stable” despite the weakness of recent years,
Arnold says, predicting about “the same rate of decline”
in 2017 as was seen in 2016. “A three to five percent
decline in 2017 is very reasonable,” he says. The market,
however, is “somewhat challenged by some saturation
among these consumers,” he adds.
Meanwhile, “if there’s an accessory market that’s
benefiting from the move to people using their
smartphones more for taking pictures then it’s products
specifically designed to be used as smartphone camera
accessories, including clip-on lenses and accessories to
help shoot in 360 degrees”, Arnold says.
Grips and stabilizing mounts are among the other
popular accessories being used specifically for smartphone
cameras. NPD, however, doesn’t break out specific sales
for such accessories and they aren’t including them as
part of the mobile accessory or digital imaging accessory
categories, Arnold says. But he estimates that sales of
smartphone camera accessories are likely relatively small.
One additional challenge facing the accessory market
is a move by many retailers to reduce square footage
devoted to many products to “maximize sales per square
foot,” CTA’s Koenig says. That is likely going to lead to a
shrinking number of accessory SKUs being sold at retail
stores and an increased number of them being sold only
online as e-commerce continues to gain in popularity,
he says. That could lead to more product returns, he
projects.
Koenig also says that as a result of what retailers
are doing to maximize sales per square foot, it’s
questionable how many will be willing to devote shelf
space to a new, “niche” accessory like smartwatch
replacement bands that would especially benefit from
a store experience. “As always, if you’ve got a retail
experience where the customer can try something in
the store before they buy or they can at least see it and
touch it, that goes a long way to ameliorating returns,”
he says.
Home Robots
U.S. Sales to Dealers (millions)
$44 2013 $196
204 2014  167
443 2015  201
799 2016e  261
1,168 2017p  318
Source: CTA Market Research
Wireless Phone Accessories Computing Accessories
U.S. Sales to Dealers (millions) U.S. Sales to Dealers (millions)
2013 $2,145 2013
2014  3,302 2014
2015  3,519 2015
2016e  3,634 2016e
2017p  3,716 2017p
Source: CTA Market Research Source: CTA Market Research
More Potential Opportunities
On the audio and video front, greater affordability of
big-screen TVs is likely helping the sale of flat-panel TV
mounts, NPD’s Arnold says, noting that sales of mounts
grew four percent in 2016, according to NPD data.
“You’ve got a wider group of consumers that can afford
big-screen TVs,” he says. Also, 50-inch and larger TVs
now “occupy a larger space in the market” than they used
to and there is “probably a connection between bigger TV
screen sizes and the desire to mount them on the wall,”
he adds.
The greater presence of OLED TVs this year and the
continued “march towards bigger screens” could help
drive TV mount sales growth of about seven percent in
2017, he predicts.
It remains to be seen if the increasing sales growth of
4K TVs will lead to a major lift in sales of HDMI cables
– especially HDMI cables specifically designed to be used
with Ultra High-Definition (UHD) TVs.
“There will not be significant growth in audio and
video cables overall in 2017,” Arnold says. But “there’s a
little bit of upside” possible from the expected increase in
4K TV sales and potential demand for UHD HDMI SKUs
to go with those sets in 2017, he says. Audio and video
cable sales may, as a result, be “flat or up one or two
percent” this year, he says. Many consumers, however,
may continue to just use the same HDMI cables they used
for their HDTVs on 4K sets.
Comments made on that subject by Jim Kozicki, audio
buyer at retailer Abt Electronics in Glenview, Illinois,
suggest that not too much hope should be placed in any
HDMI cable sales surge.
“I am not noticing any rise in HDMI sales,” Kozicki
says. “In fact, our HDMI business shrank by about 15
percent last year. I believe the attachment rate to 4K TVs
is as strong as it ever has been, but our unit sales for TVs
are down. I am not sure people are actively concerned
about the cable being 4K compliant. That usually comes
from the sales person. If they make it an issue, customers
will buy a new cable. We don’t carry any cheap cables
Audio and Video Accessories
U.S. Sales to Dealers (millions)
$2,291 2013 $2,514
 2,130 2014  2,208
 2,142 2015  2,014
 2,123 2016e  1,926
 2,102 2017p  1,892
Source: CTA Market Research
that are not 4K compliant, so I cannot speak to how
often people are buying a noncompliant cable. Since our
cable supplier, AudioQuest has had 4K compliant cables
for years now it is totally possible that our customers
would not need to upgrade their cable, so there is a strong
possibility that they are just using their existing cables.”
Abt’s overall cable business was down in 2016,
“largely due to HDMI cable sales being down,” Kozicki
says. But there’s a bright spot, he adds: “Our audio cable
business is actually growing due to our renewed focus
on selling higher end audio.  I anticipate that we will
continue to see growth in audio cables, but HDMI will
continue to trend flat.”
Not all electronics retailers, of course, are renewing
their focus on high-end audio as soundbars and other
wireless speakers continue to be among the most popular
home audio products. Therefore, we shouldn’t expect to
see a surge in audio cables across the industry anytime
soon. It also doesn’t help that overall TV sales volumes
are declining, according to CTA data.
On the computing accessory front, “the big story is
with Wi-Fi mesh networking,” Arnold says. Mesh router
systems will probably become the driver of growth in the
market for computing accessories as more consumers try
to improve the Wi-Fi coverage throughout their entire
homes, he says. The Eero whole-home Wi-Fi system,
which uses TrueMesh technology, is a notable example of
one product that’s led to consumers spending more money
on their Wi-Fi needs than they have in the past, he points
out. As a result, routers – particularly Wi-Fi mesh models
– stand to help offset the “mature” markets for keyboards
and mice, he says.
Opportunities from Nascent Markets
There is potential from the nascent virtual reality (VR)
and augmented reality (AR) markets, Arnold says.
Accessories that could generate strong sales include hand
controllers and cameras that can be used in conjunction
with headsets. He says, “There is probably an audio
accessory opportunity that we really haven’t seen just
Digital America 2017 19
 ACCESSORIES
yet.” But the questions would then be whether to
categorize such accessories as AR and VR accessories, or
video game and digital imaging accessories, or even as
separate audio products.
Regardless, “at this point, I don’t see it as huge,”
Arnold says of the VR and AR accessory market
opportunity.
Another major question is just how to categorize the
VR headsets. One can conceivably categorize them as
standalone devices deserving their own category. But one
can also conceivably make an argument that headsets
for computers are computer accessories, headsets for
smartphones are mobile device accessories, and headsets
for video game consoles are video game accessories.
“You can’t just go out and buy an Oculus Rift” headset,
CTA’s Koenig points out, “You’ve got to have a PC to
attach to it.” Similarly, PlayStation VR (PS VR) can be
classified as an accessory for the PS4, he says. A consumer
would need to own the console to use PS VR, but PS4
owners don’t necessarily need to buy PS VR.
For now, PS VR could be the largest contributor
to VR accessory sales in 2017. Down the line, VR
accessories could get a similar lift when Microsoft adds VR
functionality to its Xbox One product line or if Nintendo
opts to enter the VR arena. Nintendo said last year that
it was mulling over VR for Switch. That company is no
stranger to AR success. After all, game developer Niantic
licensed the rights to use Nintendo’s Pokemon world for
the AR mobile game Pokemon GO that became a hit last
year.
Drones remain another nascent market. NPD started
tracking drone accessory sales, Arnold says, sales of such
products jumped 186 percent in 2016. That’s “on par”
with sales growth for drones themselves, he says.
“By far the most popular” drone accessories are
batteries, Arnold says, telling us they accounted for
about 75 percent of total drone accessory sales in 2016,
according to NPD data. Other drone accessories include
replacement rotors, bags and camera gimbals.
NPD isn’t tracking the emerging pet tech sales yet like
CTA is. But Arnold guesses we may be seeing a new pet
tech exhibit area at CES in 2018. Devices being used for
pets so far include tracking devices, he notes.
Video Game Accessories Digital Imaging Accessories
U.S. Sales to Dealers (millions) U.S. Sales to Dealers (millions)
2013 $1,179 2013 $318
2014  1,249 2014  294
2015  1,316 2015  247
2016e  1,383 2016e  201
2017p  1,434 2017p  156
Source: CTA Market Research Source: CTA Market Research
20 Digital America 2017
There could also be increased demand for 3D printer
accessories, although Arnold says that, for now anyway,
that remains mainly an enterprise product category rather
than a consumer one.
There is also likely going to be more significant demand
for accessories used with smart home devices as products
like the Amazon Echo continue to gain in popularity. One
clear example is the Samsung SmartThings product line
that includes multiple accessories, including motion and
water sensors.
Unmanned Systems
Unmanned system sales including drones and home robots
still trail far behind most of the categories included in CTA’s
tech accessories and media report. But, for the second-
straight year, drones generated more revenue in the U.S. than
digital imaging accessories last year, while home robots as
CTA projected generated more revenue than digital imaging
accessories for the first time in 2016. Total sales of unmanned
systems to dealers also surpassed $1 billion in 2016.
Unit sales of drones are projected by CTA to grow to 3.4
million in 2017 after more than doubling to an estimated
2.4 million in 2016 from 1.1 million in 2015. At least part
of the growth over the past couple of years can be attributed
to more manufacturers introducing drones at consumer-
friendly prices. The average unit price of a drone in 2014
was $455 and that fell to $387 in 2015 and an estimated
$330 in 2016. The average price is expected by CTA to inch
up slightly, to $343 in 2017.
Unit sales of home robots are projected to increase to
1.2 million in 2017 from an estimated one million in 2016,
which was slightly higher than CTA’s prior forecast of
892,000 for 2016.
Wireless Phone Accessories
This year, 207.4 million wireless phone accessory units are
projected by CTA to be sold to U.S. dealers, up from an
estimated 196.3 million in 2016. Wireless phone accessory
revenue is projected by CTA to inch up to $3.72 billion from
an estimated $3.63 billion in 2016, despite the average unit
price dipping to $18 from $19.
The wireless phone accessory growth mirrors the growth
seen with smartphones. CTA projects U.S. smartphone unit
sales will grow to 185.3 million from an estimated 179.9
million in 2016, with revenue increasing to $55.6 billion
from $54.5 billion.
Computing Accessories
This year, 99 million computing accessory units are
projected by CTA to be sold to U.S. dealers, down from an
estimated 99.8 million in 2016. Revenue in the category
is projected by CTA to narrow slightly this year, to $2.10
billion from $2.12 billion, while the average unit selling
price is projected to remain $21.

CTA’s Accessories
Division
CTA’s Accessories Division encourages accessory
product sales, consumer education and the develop-
ment of industry standards that promote continued
growth, innovation and compatibility for CT accesso-
ries.
Key Focus
• Educate consumers on how accessories can
help extend the functionality, enhance the
performance and add to the enjoyment of their
products.
• Provide retailers with strategic guidance
and thought leadership on the importance
of selling CT accessories through a series of
bylined articles in trade magazines.
• Conduct research to explore opportunities for
accessory purchase decisions.
The computing accessory slowdown mirrors what’s
happening with most computing devices. CTA projects
U.S. desktop computer unit sales will drop to 6.7 million
from an estimated 7.2 million in 2016, while laptop/
notebook computer sales are projected to dip to 26.9
million from 27 million and tablet sales are projected to
slip to 58.6 million from 61.7 million.
Audio and Video Accessories
This year, 88.6 million audio and video accessory units
are projected by CTA to be sold to U.S. dealers, down
from an estimated 92.2 million in 2016. Revenue in the
category is projected by CTA to dip slightly this year, to
$1.89 billion from $1.93 billion, while the average unit
selling price is projected to remain around $21.
The audio and video accessory flatness mirrors what’s
being seen with the sale of AV products – the traditional
core of the consumer electronics device category.
Although U.S. unit sales of full HD 1080p TVs are
projected by CTA to fall to 24.4 million in 2017 from an
estimated 25.7 million in 2016, unit sales of 4K TVs are
projected to jump to 15.6 million from 10.4 million.
Video Game Accessories
Sales of video game accessories have been inching up
slightly since 2011. This year, 41.5 million video game
accessory units are projected by CTA to be sold to U.S.
dealers, up from an estimated 40.3 million in 2016.
Revenue in the category is projected by CTA to inch up
to $1.43 billion from $1.3 billion, while the average unit
selling price is projected to increase by $1 to $35.
Digital Imaging Accessories
Digital imaging accessories have been the hardest hit
among the core consumer tech accessory categories by
significant changes in the market – especially the arrival
of smartphones. And the digital imaging accessory
category is expected to continue declining in 2017.
This year, 12.7 million digital imaging accessory units
are projected by CTA to be sold to U.S. dealers, down
from an estimated 15.7 million in 2016. Revenue in the
category is projected by CTA to tumble to $156 million
from $201 million, while the average unit selling price is
projected to dip to $12.
Although overall digital camera sales have been
on the decline, there had been some strength seen in
mirrorless interchangeable lens cameras and action
camcorders from GoPro and other brands. But CTA
expects the two bright spots for 2017 within the digital
imaging category to be action camcorders and cameras
that shoot 360 degrees, the latter of which only became
a category in 2015. Although action camcorder unit
sales to U.S. dealers are projected by CTA to grow to
2.7 million units from 2.5 million in 2016, revenue from
them is expected to drop to $451 million from $496
million.
The 360 camera market, meanwhile, is still emerging
and isn’t expected to become significant this year.
But the expected sales growth for those cameras is
promising. CTA projects unit sales to U.S. dealers will
jump to 407,000 units from an estimated 129,000 in
2016, with revenue soaring to $99 million from just $36
million.
Regardless how one looks at it, all those action
camcorders and 360 cameras projected to be sold this
year provide opportunities for retailers to sell a decent
number of digital imaging accessories, including cases,
mounts, selfie sticks and interchangeable colored
faceplates for action camcorders.
Acronyms
AR Augmented Reality
HDMI High-Definition Multimedia Interface
HDR High Dynamic Range
OLED Organic Light-Emitting Diode
PS4 PlayStation 4
PS VR PlayStation VR
UHD Ultra High-Definition
VR Virtual Reality
Digital America 2017 21
22 Digital America 2017
 AUDIO
Top Trends
•  ome audio sales grew 3.7 percent in 2016 to
H
a factory level $3.34 billion, driven by gains in
soundbars and AV receivers, CTA estimates show.
•  ortable audio sales grew 1.4 percent in 2016
P
to a factory level $4.59 billion, driven by strong
gains in Bluetooth speakers and headphones, CTA
estimates.
•  ownloaded songs and music streaming accounted
D
for 79 percent of U.S. music industry revenue in
2016 reports RIAA.
•  he stars of the home audio industry include
T
soundbars, wireless multi-room audio systems and
smart speakers (voice-controlled digital-assistant
speakers) that respond to spoken commands.
•  ome, portable and aftermarket car audio products
H
now play downloaded better-than-CD-quality high-
resolution audio (HRA) files.
• HRA is now available on streaming services.
•  ireless multi-room audio systems let consumers
W
distribute music wirelessly from PCs, smartphones
and cloud-based streaming services at home.
•  leek, simple-to-install soundbars had factory level
S
sales rising nearly 19 percent in 2016 to break the
$1 billion mark, says CTA.
•  martphones are driving sales of headphones,
S
generating factory level growth of nine percent in
2016 to an estimated $2.25 billion, says CTA.
•  ales of portable Bluetooth speakers surged 19
S
percent in 2016 to a factory level $1.37 billion, with
household penetration of 44 percent.
•  urntables are undergoing a mini surge as vinyl-
T
DESIGN PICS

record popularity grows, rising 18 percent at the

factory level to $202 million in 2016 and forecast to
grow seven percent in 2017, says CTA.
 AUDIO
M
usic downloads and cloud-based streaming services
have replaced CDs and other physical media as
music playback sources at home and on the go.
Smartphone apps, for example, direct music from
networked PCs and cloud-based streaming services over
home Wi-Fi networks to tabletop speakers throughout the
house. High power portable Bluetooth speakers, which
are the new 80s-era boomboxes, unchain music from
smartphone headphones so people can listen to songs at
home or while camping. And new Wi-Fi-equipped music
streaming speakers let you control smart home systems by
voice.
Massive change has also come to home theater audio.
Now, smart TVs stream movies in surround sound
from the cloud to soundbars whose virtual-surround
technologies deliver surround effects without setting up
dedicated surround speakers. And new types of surround
sound systems deliver sound effects not just around you
but above you, bringing unprecedented realism to movies.
Audio has evolved to keep up with changing lifestyles
to continue to give consumers goose bumps. In music,
change has been driven by the rise of “lossy” compressed
digital audio formats, such as MP3, enabling easy access
to huge personal music libraries at home and on the go.
Compressed audio lets music streaming services deliver
customized “radio” stations and music on demand to
consumers’ smartphones and home audio systems.
Digital music sources have grown, however, to include
“lossless” high-resolution audio (HRA) music, which is
downloaded in such “lossless” high-resolution formats as
192kHz/24-bit FLAC (Free Lossless Audio Codec), 192/24
PCM (pulse code modulation), and Direct Stream Digital
(DSD). These formats deliver the clarity and resolution of
the original mixing studio master recordings, restoring all
of the nuances and quality lost when music is compressed
and stored in a lossy digital format. In 2017, HRA came to
music streaming services for the first time.
Easy access to huge personal music libraries triggered
immense change in the audio industry, driving up sales
of portable MP3 players to soaring heights before music
storing, music streaming smartphones rose up to knock
them off the mountaintop. Home audio suppliers also
adapted. They added home network technology to
component AV receivers, tabletop radios, compact tabletop
stereo systems, home-theater-in-a-box (HTiB) systems and
soundbars. Via Wi-Fi or wired Ethernet connection, these
products stream music from networked PCs, network
attached storage (NAS) devices, smartphones and tablets.
And through a networked broadband modem, the devices
stream cloud-based music services.
Networked AV receivers deliver a new control option:
Smartphones and tablets now serve as Wi-Fi remotes,
thanks to suppliers’ remote control apps. The apps’
24 Digital America 2017
graphical user interfaces (GUIs) simplify control of the AV
receiver setup process, access to content and other features.
Wireless wonders: In another major shift, music stored
on and streamed through mobile devices is driving sales
of wireless speakers equipped with Wi-Fi, Bluetooth or
both. Bluetooth speakers, mostly portable battery-powered
devices, reproduce music streamed wirelessly from any
Bluetooth-equipped cell phone, tablet or laptop.
Another wireless audio option is the multi-room Wi-Fi
speaker. Wi-Fi makes it possible to stream music with
higher fidelity from smartphones, tablets and laptops.
Songs can also be streamed simultaneously to multiple Wi-
Fi speakers in the house. With most Bluetooth speakers, in
contrast, a smartphone or tablet streams music to only one
speaker at a time, and the speaker must be within 33 feet
of the speaker.
Most Wi-Fi speakers are AC-only, so they have to
be plugged into a home’s power outlet. Some, however,
include a battery so they can also be used outdoors if
they are in range of a home’s Wi-Fi network. Some Wi-Fi
speakers also include Bluetooth so guests can stream music
without accessing your home network. Some of these Wi-
Fi/Bluetooth speakers even retransmit a Bluetooth stream
over Wi-Fi to other speakers.
Most Wi-Fi-based multi-room audio systems let
consumers use a smartphone or tablet as a remote control
to select songs stored on a networked PC or mobile
device. You can direct different songs to different speakers
simultaneously or send the same song to all speakers. The
speakers also access internet radio stations and cloud-based
music services.
Other home audio products, such as AV receivers
and soundbars, also include Wi-Fi-based wireless multi-
room audio enabling them to integrate with a network
of home Wi-Fi speakers. Wireless multi-room audio is
possible because of the widespread adoption of home
Wi-Fi networks. At the end of 2016, 68 percent of U.S.
households had a Wi-Fi network, Strategy Analytics
estimates, up from 2014’s 57.8 percent and forecast to hit
81 percent by 2020.
High-res gains: In another industry shift, high-resolution
home, portable and car audio products will continue to
raise the quality of streamed and downloaded music files,
delivering “lossless” quality that often matches the sound
quality of studio masters.
High-resolution products include portable MP3-
style music players, USB audio DACs (digital-to-analog
converters) that connect PCs to stereo systems, dedicated
music servers, networked AV receivers, networked AV
preamplifier/surround processors, select soundbars and
smartphones. More wireless multi-room audio systems
also stream high-res files over Wi-Fi. At least five
suppliers offer aftermarket in-dash car stereos with high-
res playback and at least a dozen aftermarket high-res
signal processors are available. And don’t forget high-res-
capable smartphones, available from multiple companies.
High-res Bluetooth: Bluetooth is also going high-res.
Qualcomm’s aptX codec, designed to deliver CD-quality
stereo over Bluetooth, got a resolution upgrade in 2016
to 24 bits from 16 bits while maintaining a 48 kHz
sampling rate.
Portable USB DACs have also emerged to unfurl the
high-res banner. They go in-line between headphones
and a laptop’s USB port, bypassing a laptop’s lower
quality internal DACs to send high-quality audio to
headphones. Some headphones include built-in high-res
DACs for laptop and smartphone listening.
Soundbars: Amplified soundbars feature slim, bar-
style horizontal cabinets that complement the styling
of flat-panel TVs. The cabinet includes amplifiers and
front-firing speakers. Many soundbars are designed
simply to fatten up the thin sound of flat-panel TVs.
The speakers in many flat-panel TVs strain to deliver
intelligible vocals, and many distort at moderate volume
levels. Many soundbars also add surround-virtualization
technologies to deliver a surround-like soundfield
without cluttering a room with two or more surround
speakers.
Winners and Losers
Change creates winners and losers. Just ask the makers
of piano rolls, CD players and portable MP3 players.
Some audio industry segments, however, are singing
sweet tunes, especially headphones, Bluetooth speakers,
soundbars, AV receivers and multi-room audio speakers.
Besides MP3 players, losers include HTiB systems and
tabletop MP3 player docking speakers (which physically
dock with portable MP3 players).
Total Home and Portable Audio Sales (Factory-level sales, in millions)
Total Home Audio* Total Portable Audio** Total Home, Portable
2013 $3,826 30.8% 2013 $4,981
2014 $2,885 -24.6 2014 $4,833
2015 $3,224   11.8 2015 $4,523
2016e $3,343  3.7 2016e $4,586
2017p $3,421  2.3 2017p $4,614
*Total home audio includes components, HTiB systems, compact systems, home/clock radios, and multi-room AV systems.
Components include receivers, tuners, amplifiers, preamplifier/processors, DACs, soundbars, in-room and custom-installed speakers, and other.
**Total portable sales include portable MP3/media players, headphones, Bluetooth speakers, MP3 player docking speaker systems, CD and cassette
headset stereos, portable tape and digital memo recorders, portable radios, and AC/DC boomboxes but exclude tabletop AC radios.
Source: CTA Market Research
Sales of standalone portable MP3 players are dropping
dramatically because of smartphones, which are used by
83 percent of U.S. households, a January 2017 CTA survey
found. For the three months ending November 2016, more
than 204.7 million smartphones were owned by people
ages 13 and up, and of them, more than 34 percent used
their smartphone to stream music, a Comscore survey
found. And 27 percent listened to music they downloaded
to their phone, the survey also found.
For their part, HTiBs have become passé as consumers
fell for the sleek form factor of soundbars and the
simplicity of soundbar setup. And with the rise of
Bluetooth and Wi-Fi speakers, MP3 player docking
speakers have taken a nose dive. These small, one-piece
speaker systems dock with MP3 players, smartphones or
tablets to amplify device-stored music for everyone in the
room to hear. Many are battery-powered.
Docking speakers are down largely because people who
use their smartphones to store or stream music want to
keep their mobile device close at hand in case a call comes
in, not docked in a speaker.
With all the changes, combined sales of home and
portable audio products, still rose an estimated 2.3 percent
in 2016 to $7.93 billion and are forecast to rise another 1.3
percent in 2017, CTA statistics show. Growth is coming in
both the portable and home segments.
Portable audio rises again: Pummeled by years of double-
digit percentage declines in sales of MP3 players and MP3
player docking speakers, the portable industry has stabilized
and resumed an upward trajectory. In 2016, strong growth
in headphones and Bluetooth speakers drove up factory level
portable sales by an estimated 1.4 percent to $4.59 billion
following a 6.4 percent dip in 2015, CTA statistics show.
Headphone sales rose nine percent to $2.25 billion and
are forecast to rise by 15.6 percent in 2017. Bluetooth
speaker sales rose an estimated 19 percent in 2016 to $1.37
billion.
-16.1% 2013 $8,807 0.01%
-3 2014 $7,718 -12.4
-6.4 2015 $7,747 0.4
1.4 2016e $7,929 2.3
0.6 2017p $8,035 1.3
Digital America 2017 25
 AUDIO
Bluetooth speakers are classified as portable products
because most units sold are AC/DC models that run off
batteries when not plugged into a home’s power outlets.
Home audio on solid ground: Sales are on the upswing,
rising an estimated 3.7 percent in 2016 to $3.34 billion and
forecast to rise 2.3 percent in 2017. Growth in home audio
components mainly in soundbars is rescuing the industry
from declining sales of HTiBs and compact stereo systems.
Defining the Market Segments
The home and portable audio industries are like orchestras
with a variety of instruments playing.
The instruments in the portable audio orchestra include
stereo headphones and Bluetooth speakers, by far the leading
players in the group. Minor players include portable MP3
players, portable CD players, and MP3 player docking
speakers, many of which are battery-operated for outdoor use.
The home audio orchestra includes such separately sold
audio components as AV receivers, AV preamp/processors,
speakers (in-room cabinet speakers as well as in-ceiling and
in-wall speakers), and soundbars. Home audio also includes
compact tabletop stereo systems and HTiB systems.
For their part, multi-room AV systems distribute audio,
and sometimes video, throughout the house via wired or
wireless technologies. The systems include wireless multi-
room audio speakers. Clock radios round out the home
audio market.
Components vs. Systems: HTiBs and compact systems
appeal to convenience-minded consumers, while home
audio components carry more clout with performance-
minded music and home theater aficionados.
HTiBs and compact systems combine all of the pieces of
a component audio system into a single, less intimidating
purchase, while audio components are purchased
individually so consumers can mix and match. HTiBs, for
example, package all electronics, often including a DVD
or Blu-ray player, and five or more speakers into a single
purchase to deliver all of the elements of a home theater
system – except for the TV.
Separately sold components include floor standing,
bookshelf and wall-mounted speakers, in-wall and in-
ceiling speakers, and such full-size (17-inch-wide) electronic
components as stereo and AR receivers. Receivers combine
AM/FM tuner and an amplifier that drives two or more
speakers. Most feature Bluetooth to stream music wirelessly
from mobile devices, and come with Wi-Fi or Ethernet to
stream music directly from cloud-based music services and
from networked PCs and mobile devices.
Most receivers also include surround sound decoders
to reproduce discrete multichannel surround sound from
the soundtracks of DVDs, Blu-ray Discs, 4K Ultra HD
Blu-ray Discs, video streaming services and local digital TV
26 Digital America 2017
broadcasts. These surround decoding AV receivers include
five to 11 amplifier channels to drive five to 11 speakers.
In a 5.1-channel surround system, one speaker is placed
on each side of a TV. A center channel speaker goes above
or below the TV screen to lock dialog onto the screen.
Two surround speakers, one on each side of the main
seating position, complete the speaker complement along
with a subwoofer (the 0.1 channel) with built-in amplifier.
Subwoofers reproduce only the lowest bass sounds,
reducing system distortion and boosting total bass output to
make a room rock.
In a typical 7.1-channel system, two back surround
speakers integrate with two side surround speakers,
three front speakers and a subwoofer to create a realistic
360-degree soundfield. Some systems use a variety of post-
processing technologies to create 9.1- and 11.1-channel
surround sound from 5.1- or 7.1-channel content – as long
as you add more speakers.
The newest surround formats, Dolby Atmos and DTS:X,
add to the realism. With these object-based surround sound
formats, individual sounds not only move from left to right
and from front to back but also up and down in a three-
dimensional space. The technologies also pan individual
sounds more smoothly around listeners. (See the home
theater section.)
Audio niches: Other types of audio components, usually
reserved for the most demanding audio enthusiasts, include
separate amplifiers, AV preamplifier/surround processors
(essentially AV receivers without built-in amplifiers),
and a growing selection of USB DACs (digital-to-analog
converters), which capture the USB audio output of desktop
and laptop PCs and smartphones to improve the playback
performance of downloaded and streamed music.
Some marketers consider “universal” Blu-ray players to
be an audio component. These players, including at least
one 4K Ultra HD Blu-ray player, play back two-channel and
multichannel DVD-Audio (DVD-A) and SuperAudio CD
(SACD) music discs, not just movie discs. The DVD-A and
SACD music formats, however, are limited to a very high-
end niche of audiophile enthusiast.
The component universe also includes retro products like
turntables, whose sales are surging as sales of vinyl albums
grow, and CD players and changers, whose sales have
almost disappeared because of the popularity of digital
downloads and streaming. The category also includes
electronics and speakers used in custom installed multi-
room audio systems, which distribute music via wires to
in-wall and in-ceiling speakers installed in the home.
Component prices range from affordable to extremely
expensive. One high-end speaker pair costs $224,999. AV
receivers in 2017 are priced up to $5,999 but start at $249.
Preamp/surround processors range from $599 to $31,500
and more.
 Soundbar sonata: Component audio also includes active
(powered) soundbars. These horizontal slim-profile
speakers complement the cosmetics of thin flat-panel
TVs. The speaker cabinet incorporates amplifiers and
multiple speakers but lacks an integrated Blu-ray or
DVD player.
Some soundbars are less than 1.5-inches tall, and
some are as little as 1.2-inches-deep. Many can be
mounted on the wall below a wall-mounted flat-panel
TV. Many come with wired or wireless subwoofers to
deliver deeper and more powerful bass.
Most soundbars are designed to fatten up the thin
sound of flat-panel TVs. But many soundbars have
evolved from TV sound accessories into full-fledged
music systems, thanks to improved performance,
Bluetooth and Wi-Fi. Many soundbars also include
surround sound decoders and surround virtualization
technologies to deliver surround sound without setting
up separate surround speakers (though separate
surround speakers deliver a higher degree of sound
localization and surround performance).
Consumers love soundbars because they are simple to
set up, blend in easily with flat-panel TVs and take up
little space. You don’t have to run speaker cables around
the living room to five or more speakers. Soundbars also
work in rooms that don’t easily accommodate multiple
speakers in the locations required to deliver optimum
surround sound performance.
For small living rooms and secondary rooms such
as bedrooms, soundbars provide a compact sound-
enhancement solution. To take realism up a notch,
soundbars from about a dozen suppliers in early 2017
could link with wireless surround speakers to deliver
EFETOVA
discrete surround effects without running speaker cables
around the room.
Wireless multi-room audio: Wireless multi-room audio is
also playing a growing role in the home audio industry. A
wireless multi-room audio system uses a PC, smartphone
or tablet as a whole house music source. They also
stream music directly from cloud-based music services.
Music is transmitted via Wi-Fi or proprietary wireless
network technology to multiple wireless tabletop speakers,
soundbars and AV receivers in different rooms of the
house.
Most wireless multi-room systems can be controlled
via Wi-Fi from apps running on a smartphone or tablet or
from a dedicated handheld wireless controller. From these
handheld devices, consumers choose the songs they want to
stream wirelessly to one or more speakers. In some cases,
different songs can be sent simultaneously to different
speakers from a single PC or from a single mobile device.
Smart speakers: The wireless speaker segment now
includes Wi-Fi-equipped smart speakers or voice-assistant
speakers. They include cloud-based digital assistants such
as Amazon’s Alexa or Google Assistant. These speakers,
including Amazon Echo, Tap and Dot and the Google
Home speaker, do more than just stream music from the
cloud; they enable natural language voice control of music
streaming services and smart home products such as smart
lights, power outlets, thermostats and security systems.
Consumers can also ask the speakers to read a weather
report, the latest news, winning lottery numbers, personal
calendars, and the like. The Google Home speaker doubles
as a wireless multi-room speaker that integrates into a
network of wireless multi-room speakers equipped with
Google’s Chromecast built-in technology.
Sensing the disruptive nature of smart speakers, some
wireless multi-room suppliers plan to embed microphones
into their speakers to access Amazon’s and Google’s cloud-
Digital America 2017 27
 AUDIO
based voice services. Alternately, some CE suppliers plan
to network their speakers with an Amazon or Google
smart speaker, enabling consumers to talk to Amazon or
Google to control select features of other brand wireless
multi-room speakers. Consumers can also stream a
smart speaker’s music services through their other brand
multi-room speakers.
Voice-enabled smart speakers are expected to renew
growth in wireless multi-room speakers. “Voice speakers
will bring in the much needed growth in the overall
Wi-Fi [and hybrid Wi-Fi/Bluetooth speaker] space,”
says FutureSource analyst Rasika D’Souza. “Voice
recognition technology is the next big thing, and it’s
going to be huge. Speakers have the ideal feature set
for incorporating voice, and right now this is a colossal
opportunity for audio companies, if they get it right.”
High-Res Audio Ends Convenience,
Quality Tradeoff
A growing sub-segment of the audio market consists
of a broad variety of home and portable products that
decode high-resolution audio formats.
High-res audio formats reverse what audiophiles
say has been a continuing degradation in the quality
of recorded music over the past 35 years, first with the
1982 launch of the CD, then with the 1990s launch
of compressed MP3 file downloads. Audio quality fell
again with the launch of limited bandwidth streaming
services.
In 2009, however, the U.S. launch of the first
downloadable HRA files by an authorized download
service eliminated the need to choose between sound
quality and the convenience of storing thousands of
songs on a computer hard drive, portable digital audio
player (DAP), or music server and accessing them by
title, artist or album.
High-res technology proved that “quality and
convenience can be in complete harmony,” Atlantic
Records co-chair/CEO Craig Kallman contends.
The harmony is broad-based. As of early 2017, the
FindHDMusic.com database found that about 23,350
high-res albums were available for downloading by U.S.
consumers, up from 14,000 in July 2015, and there were
probably more, the company says. That includes more
than 15,000 high-res albums from the three major U.S.
record companies as well as many independent U.S.
music companies, adds DEG: The Digital Entertainment
Group (DEG).
About 70 sites were making high-res downloads
available to consumers, including sites based outside the
U.S., with albums priced from $9.99 to more than $33.
Individual songs can be purchased separately. More than
100 high-res audio devices were available globally, DEG
found.
28 Digital America 2017
High-res streaming: High-res audio is expanding its
potential customer base with the launch of streaming
services, which tap into consumers’ growing penchant for
streaming music on demand rather than downloading it.
All three major U.S. music companies – Sony, Warner and
Universal, as well as the RIAA have endorsed high-res
streaming.
High-res streaming is available from two providers,
Tidal and Napster, but more services are expected to join
soon. By the end of 2017, four to five services could be
streaming high-res, according to MQA Ltd., inventor of
the Master Quality Authenticated (MQA) technology.
MQA raises high-res sound quality while reducing needed
bandwidth requirements, making it practical to stream
high-res music from the cloud.
The best quality previously available for music
streaming was CD-quality, but only through two providers,
Tidal and Deezer.
High-res rationale: The U.S. music industry is promoting
premium priced HRA downloads and streaming to bolster
revenues that peaked in 1999 at $20.7 billion (in 2015
dollars) and fell to $7 billion in 2015, RIAA statistics show.
As a result, music labels are pumping out high-resolution
versions of catalog titles and new music to reach customers
with premium priced products.
The music and audio industries see an opportunity to
introduce a generation that grew up on compressed music
files and earbuds to the full impact of music as the artists
intended it to be heard – with full dynamic range and
unparalleled clarity and definition.
HRA music files can be downloaded from the cloud
to a computer or portable DAP for playback on wireless
multi-room audio speakers, streaming network adapters,
soundbars, standalone digital-to-analog converters (DACs),
and a growing selection of HRA-decoding smartphones and
aftermarket car audio products.
In 2016, consumers could buy the first USB turntable to
let consumers convert vinyl records to high-res files when
connected to a computer’s USB port. High-res music can
now be streamed from the cloud through PCs and select
wireless multi-room audio products, with streaming by
Wi-Fi-equipped DAPs and high-res smartphones expected
to follow.
Promotion underway: The music industry, CTA and the
audio industry have rallied to promote HRA to consumers.
CTA has developed an online high-res audio guide to educate
retailers on demonstrating and selling high-res products. CTA
also worked with Sound & Vision magazine to develop an
online high-res consumer guide.
In 2015, Best Buy became the first national CE retailer
to promote high-res audio, joining smaller AV specialty
stores in the effort. And in 2017, DEG is launching a new
consumer awareness campaign, called Home Audio by Segment - U.S. Sales to Dealers
Stream the Studio, to align marketing Dollar Sales (millions)
Components** HTiB Systems Compact Systems
messages to promote high-res
2013 $2,133   3 8.9% 2013 $549  11.1% 2013 $282 12.8%
devices, technologies and music. The
campaign includes event marketing 2014 1,607 -24.7 2014  225 -59 2014  185 -34.4
and social media to educate and 2015 1,993  24 2015  182 -19.1 2015  181  -2.2
engage millennial music fans. 2016e  2,225  11.6 2016e  146 -19.8 2016e  123  -32
2017p  2,367   6.4 2017p  130 -11 2017p  90 -26.8
Next-gen high-res: Another HRA
advance was the 2016 launch of
high-res music files made with
Home Audio by Segment - U.S. Sales to Dealers
Master Quality Authenticated
Dollar Sales (millions)
Multi-room AV Systems** Home, Clock Radios Total Home Audio***
(MQA) technology. MQA delivers
2013 $659 60.3% 2013 $203 -13.6% 2013 $3,826  30.8%
high-performance in smaller files
compared to other types of high-res 2014  665  0.01 2014  203 0 2014  2,885 -24.6
files, giving consumers the flexibility 2015  672  1.1 2015  196 -3.4 2015  3,224 11.8
to store tons of high-res songs on 2016e  664   -1.2 2016e  185 -5.6 2016e  3,343 3.7
portable players, computers and 2017p  662  -0.3 2017p  171  -7.6 2017p  3,420 2.3
music servers in less space.
MQA-based files take up **Components include receivers, tuners, amplifiers, preamplifier/processors, soundbars without DVD or
Blu-ray player and in-room and custom-installed speakers
less room because the nominal
streaming rate of a two-channel ***Total home audio includes components, HTiB systems, compact systems, home/clock radios,
and multi-room-AV systems.
MQA file is 1Mbps compared to
9.6Mbps for an uncompressed Source: CTA Market Research
two-channel 192kHz/24-bit digital
file and 18.5Mbps for a 384/24 file. A three-minute MQA Home Audio Sales Trends, by Category
download takes up only 30MB of storage space on a hard The two elephants in the home audio industry’s center
drive or in flash memory compared to 150MB for a three- ring are components (including soundbars) and multi-
minute 192/24 FLAC file. The ratio is different at other room AV systems (including wireless multi-room-audio
sampling rates. speakers). The two categories represented the industry’s
MQA files are much more efficient than other high-res two largest segments and will retain their status in 2017,
formats because other formats use half their data rates to CTA statistics show.
replicate inaudible frequencies above 20kHz. Although Components continue to rally, resuming a trend that has
those frequencies can’t be heard, they are important continued almost without interruption since 2010. Factory
because they contain information on the arrival time of level sales rose an estimated 11.6 percent in 2016 to $2.23
audible sounds, contributing to the realism of what you billion and are forecast to rise another 6.4 percent in 2017,
hear. Timing details are critical to how we identify and CTA statistics show.
locate sounds. Soundbars were the main drivers of growth, rising 19
MQA, in contrast, captures that timing information but percent to $1.06 billion to breach the $1 billion mark for
“folds” it without loss into the audible range to produce a the first time. Soundbar sales have surged so rapidly that in
smaller file, MQA inventor MQA Ltd. explained. 2016, they accounted for 48 percent of component audio
MQA-encoded music, which takes PCM form, can be sales, says CTA.
placed inside any lossless-audio file “container” such as AV receivers, however, also contributed to home audio
FLAC, ALAC or WAV. An MQA decoder can be built growth, rising an estimated six percent in 2016 to $452
into hardware, or it can take the form of an app for a million, as did sales of analog turntables, whose sales have
smartphone or PC. benefitted from growing interest in vinyl records. Turntable
For backward-compatibility, an MQA-encoded file sales rose an estimated 18 percent in 2016 to $202 million
played back on a device lacking an MQA decoder will and are forecast to rise in 2017 by seven percent.
deliver better-than-CD quality. All told, total home audio sales grew an estimated 3.7
percent in 2016 to $3.34 billion, with CTA forecasting 2.3
MQA sources: In January 2016, the first MQA downloads percent growth in 2017.
became available with more than 250 MQA albums from
three online stores from labels like Warner Music, RME TV-upgrade impact: Vendors and retailers attribute
Premium Recordings, Sono Luminus, Unamas and 2L. component gains in part to continuing advances in 4K

Digital America 2017 29

 AUDIO
Ultra HD TV, which put premium consumers in a buying
mood. Ultra HD TV developments include the 2016
proliferation of 4K TVs with wide color gamut and high
dynamic range (HDR), more 4K video-streaming sources,
and the 2016 launch of 4K Ultra HD Blu-ray players. (See
home theater section.)
Consumers upgrading to premium 4K UHD TVs and
4K video sources tend to upgrade their home theater’s
audio system to match their new TVs’ performance.
Another TV trend appealing to premium consumers is the
proliferation of big-screen flat-panel TVs up to 12- inches.
People with 55-inch TVs didn’t rush to replace them with
a 60- or 70-inch TV, but with growing selections of 70- to
120-inch TVs, premium customers have more reasons to
upgrade.
New TVs, Blu-ray players or OTT media streamers
also practically compel consumers to turn in their existing
AV receiver or preamp/surround processor for a model
with the latest digital HDMI (High Definition Multimedia
Interface) connections.
AVRs with the latest HDMI 2.0a and 2.0b connections
are needed to pass through a greater variety of HDR-
enabled 4K video content to 4K TVs from 4K Blu-ray
players, 4K set-top IP video streamers and future 4K
pay-TV set-top boxes. Consumers must also upgrade to
HDMI connections that support High-bandwidth Digital
Content Protection (HDCP) 2.2 copy-control technology,
which enables the pass-through of copy-protected content
from media streamers and Blu-ray players through AV
receivers to TVs.
In general, AV receivers and AV preamp processors get a
lift whenever new connection technologies are introduced.
Another reason to upgrade is that HDMI connections
on AV receivers receive the best video and audio
performance from HDMI-connected Blu-ray players and
set-top boxes. HDMI cables also pass through audio and
video over one cable, simplifying connections by making
separate audio and video cables unnecessary.
Object-based surround: The launch of object-based
surround sound formats is also encouraging consumers
to replace AV receivers and AV preamp processors with
models offering Dolby Atmos and DTS:X decoding. Such
AV receivers were priced at a suggested $479 in early 2017.
And to deliver the overhead sound effects promised by the
technologies, you’ll need either in-ceiling speakers, floor
standing and bookshelf speakers with integrated height-
channel drivers, or dedicated height speakers, which can be
placed on top of existing speakers.
Other AV receiver features enticing replacement
sales include high-resolution music playback, the ability
to stream music from cloud-based music services and
networked PCs, and integration with wireless multi-room
audio systems.
30 Digital America 2017
Turntables spin again: Old-fashioned turntables are
also contributing to home audio growth, thanks to the
growing popularity of vinyl records. Vinyl is cherished
by some as offering warmer sound than digital music.
For others, vinyl is cool because it’s retro. And for an
older nostalgic generation, a new turntable helps to relive
memories.
New turntables have adopted the latest technologies to
increase their appeal. Many turntables convert songs into
digital files for transfer over USB to a computer. Some
feature Bluetooth to stream vinyl records to Bluetooth
speakers. And at least one model features high-resolution
audio encoders to create high-resolution audio files from
vinyl.
In the first half of 2016, sales of vinyl records
accounted for 31 percent of the retail value of all physical
music media shipped, or $210.3 million, the RIAA found.
CD volume, in contrast, came to $443.9 million. That’s
out of total music industry retail level revenues of $3.33
billion during the period.
Soundbar surge: The component surge has mostly been
led by soundbars, whose sales have grown so rapidly
that 23 percent of U.S. households owned at least one
soundbar in early 2017, a CTA survey found. That’s up
from only eight percent in January 2012.
The svelte products are surging because they’re simple
to set up, blend in with the cosmetics of flat-panel TVs,
take up little space and deliver great sound. On top of
that, retailers and suppliers have aggressively expanded
their soundbar selections and scaled back their HTiB
selections, giving further impetus to the soundbar
juggernaut.
Many consumers view soundbars as surround sound
replacements for HTiBs because many soundbars include
the surround-decoding and surround virtualization
technologies needed to produce a reasonable substitute
for true multi-speaker surround sound.
Soundbars also simplify setup and provide a more
elegant aesthetic look. One bar above or below a flat-
panel TV replaces three separate front speakers and two
to four surround speakers. Setup can be limited to a single
audio cable connection to a TV’s audio output, with video
source switching relegated to the TV.
Even though many consumers would prefer a true
surround experience delivered by a multi-speaker HTiB
or component audio system, many consumers choose
convenience over performance in opting for soundbars.
The selection includes the first models with object-
based surround decoding. The first one appeared in late
2015, but in 2017, at least nine suppliers offer them, each
delivering object-based surround in their own way.
Most object-based soundbars use multiple built-in
speakers and digital signal processing (DSP) technology
to deliver convincing height and surround effects without HTiBs fizzle: HTiBs caught fire in the late 1990s because
setting up separate height-channel and surround-channel they simplified the purchasing decision. But now the light
speakers. At least one model, however, is packaged with has dimmed. HTiBs appeal to consumers who don’t want
wireless surround speakers to deliver true surround. to shop for multiple audio components or research to
Several models are packaged with a slimline AV receiver determine which components work well together. Case
that includes amplification, decoders, virtual surround in point: Connecting inefficient component speakers to a
processing and HDMI switching. low-powered AV receiver could cause speaker-damaging
distortion if you tried to pump up the receiver’s volume to
a satisfying level. HTiBs solved that problem because all of
Soundbars - U.S. Sales to Dealers the pieces work together in harmony.
(units in thousands, dollars in millions) Many people, however, raised practical objections
to HTiBs, and soundbars solved the issues for them.
Units Dollars Many living rooms, for example, aren’t laid out to
accommodate multiple speakers in the spots needed to
deliver surround sound to its fullest potential. Many
consumers also harbor aesthetic objections to cluttering
2013 2,707 $520 a room with five or more speakers or running wires from
a system’s control unit to surround speakers. Soundbars
also simplify set-up.
33.3% 50.3%
On top of that, the growing use of streaming media
adapters and smart TVs with embedded OTT video-
streaming services undermine the need, in many consumers’
minds, for the integrated Blu-ray players found in most
HTiB systems.
2014 3,468 $643
In addition, step-up soundbars incorporate many of the
features offered by HTiBs. They include stereo Bluetooth to
28.4 23.7 stream music from smartphones and tablets, wireless multi-
room audio, and video source switching via HDMI inputs.
The ability to pair wireless surround speakers
with select soundbars further reduced HTiBs’ appeal,
delivering discrete surround sound channels to take
2015 5,800 $896 realism up a notch. About a dozen suppliers in 2017 offer
or plan to offer soundbars that can be used with wireless
surround speakers.
67.2 39.3

Home Theater-In-A-Box (HTiB)

U.S. Sales to Dealers
2016e 6,960 $1,064
(Units in thousands, dollars in millions)
Unit Sales Dollar Sales
20 18.8
2013 1,535 -22.7% 2013 $549  11.1%

2014 797 -48.1 2014  225 -59

2015 773 -3 2015  182 -19.1

2017p 7,656 $1,159 2016e 634  -18 2016e  146 -19.8

2017p 570  -10.1 2017p  130 -11

10 8.9
(HTiBs include receiver/speaker packages, HTiBs with integrated
Consists of amplified and unamplified soundbars lacking Blu-ray players, and soundbars with included DVD or Blu-ray
embedded Blu-ray or DVD players. player. Amplified soundbars without Blu-ray player are counted
in audio-component statistics.)
Source: CTA Market Research Source: CTA Market Research

Digital America 2017 31

 AUDIO
Compact contraction: Compact systems are like HTiBs
but are expressly for stereo music playback, not home
theater surround sound. These systems come with two
tabletop speakers, which are either wired to, or embedded
in, a main chassis that usually includes an AM/FM tuner,
amplifier and CD player. Many models add Bluetooth,
USB port to play music from PCs and USB sticks, and a
Wi-Fi network connection to stream music from the cloud
and from networked sources such as computers. Some
models also decode high-res audio formats. Some are
priced as high as $6,000.
Compact system sales are off their 2000 factory level
peak of $1.78 billion, CTA statistics show. The reasons
include the popularity of Bluetooth speakers and Wi-Fi
speakers. In 2016, compact sales fell to a negligible $123
million, CTA estimates show and are forecast to drop
again in 2017.
Multifaceted multi-room: Another key home audio
segment, multi-room AV, splits into two segments, one
targeting do-it-yourselfers with wireless systems and the
other requiring professional custom installation and lots
of wires.
Combined sales slipped 1.2 percent at the factory
level in 2016 to $664 million and are forecast to slip 0.3
percent in 2017 following six years of growth, most of it
at double-digit percentage rates.
The statistics, however, don’t include Wi-Fi-equipped
smart speakers or voice-assistant speakers, such as
Amazon’s Echo, Tap and Dot speakers and Google’s
Google Home speaker. The latter is multi-room-capable
and networks with other-brand multi-room speakers
equipped with Chromecast built-in technology.
Sales of smart speakers ballooned an estimated 50
percent in 2016 to a factory level $446 million and are
forecast by CTA to hit $608 million in 2017, up 36
percent.
Smart or not, a wireless multi-room audio system
uses Wi-Fi or proprietary wireless technologies – not
speaker cables – to distribute music around the house
from the cloud and networked devices. Music is delivered
wirelessly to powered tabletop speakers, soundbars and
AV receivers.
In contrast, custom installed multi-room systems
consist of in-wall and in-ceiling speakers connected by
speaker cables inside the wall to a whole-house multi-
room amplifier. The amp in turn plugs into home-wide
audio sources such as dedicated music servers or network
streamers, which access music from cloud sources, PCs,
smartphones and tablets.
Multi-room audio systems are popular because they
tap into consumers’ desire to listen to music as they move
from room to room, and to the patio or porch, during
their daily routines or when throwing a party.
32 Digital America 2017
Component Audio: The Costs
New music sources, new surround sound technologies
and new video technologies have forced component audio
suppliers to make massive changes to stay relevant. But the
cost of relevancy doesn’t have to be high.
Starting at around $270 in early 2017, AV receivers
with built-in Bluetooth to stream music from smartphones,
tablets, and laptops were available. Starting at $449,
AV receivers in early 2017 featured built-in Wi-Fi to
stream music from the cloud, networked PCs, and other
networked devices, including smartphones. At these prices,
consumers could also avail themselves of AV receivers with
built-in wireless multi-room audio. Playback of high-
resolution audio files started at $479.
Surround decoding: Surround decoding is also affordable.
AV receivers with surround decoding started at $249 in
early 2017. But prices can go as high as $5,999 for high-
performance models. Preamp/surround processors range in
price from $599 to $31,500 and up.
Object-based surround: In 2014, the first AV receivers
that decoded “object-based” surround sound soundtracks
hit the market at premium prices along with the first
object-based soundtracks on Blu-ray Discs. Today, the
price of entry is very affordable starting at $479 for AV
receivers. AV preamp processors that decode object-based
surround formats start at a suggested $2,199 and range up
to $31,500.
AV receiver connectivity: The latest HDMI connectivity
options are also affordable. The latest HDMI inputs and
outputs pass copy-protected wide-bandwidth 4K video
from IP-based OTT streaming adapters, 4K Blu-ray players
and future 4K pay TV broadcasts.
The latest HDMI flavors, 2.0a and 2.0b, step up to pass
through more HDR 4K video formats (HDR 10 and hybrid
log gamma), joining the Dolby Vision format. HDR delivers
deeper blacks, higher brightness, and more detail in the
darkest and brightest portions of a scene. AV receivers with
HDMI 2.0a inputs and outputs start at $299.
HD Radio: A handful of upper-tier AV receivers priced
from about $2,000 to $3,000 also include HD Radio,
an in-band on-channel (IBOC) technology that lets AM
and FM stations use their existing transmitters, antennas
and dial positions to deliver high-quality interference-free
digital audio without a monthly subscription fee. HD
Radio technology, developed by iBiquity Digital (www.
ibiquity.com), also lets FM stations broadcast multiple
digital programs simultaneously. Home and portable audio
products incorporating HD Radio, however, have grown
scarcer as consumers turn to streaming services for their
digital music.
 New component types: With PCs primary music sources
at home, many consumers want to connect PCs to high-
performance component audio systems. As a result,
suppliers have developed a new type of component, called
a USB DAC, to transfer music at a higher quality level from
PC to audio system.
Desktop USB DACs plug into a PC’s USB port, replacing
a PC’s lower quality sound card. They also connect to
music-laden USB sticks and USB-connected hard drives.
The desktop DACs usually come with other types of
digital connections to connect to such music sources as CD
transports and SACD (Super Audio CD) transports. High-
performance home DACs costing as much as $40,000
appeal to high-performance audio enthusiasts, but prices
run as low as around $299.
Some USB DACs are portable models that connect
between a laptop or smartphone and a pair of stereo
headphones. Such DACs are available from multiple suppliers
starting at about $39 and going up to $2,500 or more.

Turntables: Prices range from the affordable to the

implausible. Models with Bluetooth start as low as around
$99, which is roughly the starting price of basic models
that convert vinyl to MP3 files. Vinyl enthusiasts, however,
are willing to pay a lot more, and prices up to $3,000 are
common. Some go up to $30,000, and you’ll have to sell
your house to afford a $650,000 model.
Speaker smorgasbord: Speakers have also evolved to
keep up with changing demand and now come in decidedly
untraditional forms.
Traditional speakers are “passive,” requiring a
separately sold amplifier or AV receiver to deliver the
electrical current needed to move speaker cones. Passive
speakers come in four major types. There are tall floor
standing speakers and smaller bookshelf speakers, which
sit on a shelf or on a floor stand. Other passive speakers
mount on the wall to free up floor space, particularly in
home theater systems that use as many as seven speakers.
For a less obtrusive look, other passive speakers are
installed flush in the ceiling or in the wall, often with grilles
painted to match the room’s color.
Prices range from the very affordable, starting at
around $99 for entry-level bookshelf speakers to as much
as $224,999 for floor standing speakers. Some passive
speakers are sold in packages that include all of the
speakers needed in a home theater system.
Another type of traditional speaker, called a subwoofer,
comes with built-in amplifier, freeing up the amps in an
AV or stereo receiver to drive the other speakers in a
stereo or home theater system. Subwoofers reproduce
only the lowest bass sounds, reducing system distortion
KAVISTYLE
Active speakers: For the untraditional consumer, a pair
of powered (or active) speakers is the best way to go to
dispense with the need for an AV receiver, stereo receiver,
or separate amplifier. Such speakers include built-in
amplifiers along with a wealth of audio inputs, including
USB, digital and analog. Some come with built-in phono
preamps to connect to high-performance turntables, and
many come with built-in high-res DACs. Some come with
Bluetooth to stream music from smartphones and laptops,
and some come with Wi-Fi to stream music from devices
on a home network. Prices start at around $399/pair and
range up to $3,000/pair.
Soundbars: The Cost of Convenience
Most powered soundbars are priced from around $49
to around $3,000, though one company plans a $6,000
model in late 2017. Models as low as $49 include stereo
Bluetooth to play music streamed wirelessly from a
smartphone, tablet or laptop. Models starting at about $79
come with an outboard subwoofer to boost bass output
and reduce audio distortion.
Many low-priced soundbars simply connect to a TV’s
analog or optical digital audio output to amplify TV audio,
leaving the TV to switch among such HDMI-connected
video sources as a pay TV set-top box, Blu-ray player, or

and boosting total bass output to make a room rumble. OTT streaming media adapter. The TV passes the audio
They range in price from around $99 to $21,000. signal to the sound bar for amplification.

Digital America 2017 33

 AUDIO
There are some drawbacks, however, to using a TV to
switch video sources. If the video source’s audio signal is
sent through the TV’s optical output to a sound bar, then
a surround signal might not pass through to a surround
decoding sound bar (though a stereo signal will). The
chances of passing through a surround signal depend
on the TV, video source and the soundtrack’s format. If
the connected soundbar includes surround decoders and
virtual surround technology, then the soundbar might not
be able to create a sound field that strives to approximate
true surround sound.
Starting at around $179, some soundbars connect to
a TV via an HDMI cable, enabling the bars to capture
surround signals from a smart TV’s embedded video-
streaming apps and from TV-connected OTT streaming
media adapters.
These soundbars also usually come with a single HDMI
input to make a direct connection to a Blu-ray player
or Blu-ray-equipped game console, enabling a soundbar
to receive the highest quality surround signals: wide-
bandwidth Dolby TrueHD and DTS-HD Master, which
might be combined with object-based metadata to deliver
height effects. Soundbars that decode those surround
formats will be able to decode and process the highest
quality surround signals.
Starting at around $299, select soundbars incorporate
two or more HDMI inputs to take over video switching
duties from a TV. This type of soundbar connects via
HDMI cables to multiple video sources, captures the video
sources’ audio for reproduction, and passes each source’s
video to the TV. In some cases, this makes installation
simpler and neater, such as when a TV is mounted on a
wall or above a fireplace. The fewer visible cables running
to the TV, the better.
DIGITAL ASSISTANT
DEVICES
+52%
34 Digital America 2017
Starting around $249, select soundbars include
wireless surround speakers to deliver more realistic
surround sound than what can be delivered by virtual
surround technology. Models starting at around $229
can connect to optional wireless surrounds.
Object-based surround: A growing number of
soundbars decode object-based surround sound. The
first one appeared in late 2015, but in 2017, at least
nine suppliers offer them, each delivering object-based
surround in their own way at prices around $899 to
$6,000.
Object-based soundbars use multiple built-in speakers
and DSP technology to deliver convincing height and
surround effects. At least one model is packaged with
wireless surround speakers to deliver true surround. And
several models are packaged with a slim line AVR that
includes amplification, decoders, virtual surround and
HDMI switching.
Multi-room audio soundbars: Soundbars that integrate
with Wi-Fi-based multi-room audio systems sweeten
the value proposition, and their selection is growing.
Soundbars that connect to wireless multi-room-audio
systems are available from at least 16 companies at
prices starting around $199.
High-Res Audio: Not Always High Prices
The selection of audio products that play high-resolution
audio (HRA) formats is growing along with the selection
of high-res albums. Dozens of suppliers offer a range of
portable, car and home audio products, including AV
receivers, two-channel stereo receivers, soundbars, active
speakers and wireless multi-room speakers.
4K Ultra HD:
4.5 millon units (+52%)
$608 million in renenue (+36%)
Source: CTA Market Research
Consumer Technology Association
 AV receivers priced around $479 play high-res files
from a USB stick, networked PC or dedicated music
server. High-res portable music players range from $99
to $3,499. And in-dash car stereos from at least five
companies support high-res audio decoding and playback
at prices starting at $500 for an in-dash head unit.
They play high-res files from USB-connected devices.
Headphones with embedded memory and high-res
decoding start around $399.
At least 11 brands now offer products that decode
the new Master Quality Authenticated (MQA) high-res
format. The products include portable DAPs (digital
audio players), high-end home and portable DACs, and
audio components like CD players, DAC/amplifiers and
active speakers. MQA could also be included easily into
smartphones, and one audio vendor plans to soon offer a
smartphone with MQA.
High-res audio also extends to wireless multi-room
audio speakers and soundbars from a growing number of
suppliers. In wireless multi-room, speakers priced at $149
in early 2017 play high-res music. In soundbars, high-res
playback start around $399.
Also for the home, DACs, combination preamplifier/
DACs and integrated amplifier/DACS play back high-res
audio from USB-connected PCs. Some are quite costly.
USB-equipped high-res DACs range from about $169 up
to $16,000, if not more.
For consumers who carry high-res files on a laptop
or smartphone, multiple suppliers offer mobile USB-
equipped headphone DACs and DAC/amps to deliver the
highest quality sound to headphones. These pocket-size
DACs connect in line between a laptop and headphones
and are priced from $49 to around $2,500.
DRAGONIMAGES
What to Look for in Wireless Multi-Room
Wireless multi-room audio technology is going beyond
single-chassis stereo speakers to include AV receivers,
AV preamplifier/surround processors, stereo receivers,
soundbars, active high-performance left/right speakers,
streamers and dedicated music servers.
In 2017, the selection of products continues to expand
with about 70 companies expected to offer them, up from
about 40 in 2016. From these companies, single-chassis
wireless multi-room speakers start at about $69 but range
up to about $2,400 for high-performance models. Most
models include left and right channels to deliver stereo from
a single speaker cabinet, but many give you the option to use
two speakers, one for the left channel, and one for the right,
to expand the sound stage. Many also double as wireless
surround speakers when used with compatible wireless
multi-room soundbars.
The selection of soundbars with integrated wireless
multi-room audio has also grown. They’ll be available from
almost 20 companies in 2017 at prices from $499 to $1,699.
At least seven brands were offering networked AV receivers
with wireless multi-room audio technology, with prices
starting at $449 and hitting as much as $3,200. Even Blu-ray
players have gotten into the act, with at least one company
offering a model with wireless multi-room capabilities.
Alexa speaks out: Select wireless multi-room speakers will
add embedded microphones and Amazon’s Alexa Voice
Service, enabling consumers to use natural language spoken
commands to access music streaming services, control smart
home products such as smart lights, or ask the speakers to
read a weather report, the latest news or even a personal
calendar.
Digital America 2017 35
 AUDIO
Custom Multi-Room, Home Theater
For the do-it-yourselfer, distributing music throughout the
house is a simple matter of buying wireless tabletop speakers,
connecting them to a wireless network, and putting them on
tables and shelves throughout the house.
If, on the other hand, you’re building or remodeling a
home, you might consider the custom installation of a more
sophisticated multi-room audio system that distributes music
from audio sources to in-wall and in-ceiling speakers inside
the house and to outdoor speakers by the patio.
Custom-installed speakers are out of the way and
practically disappear if painted to match the wall. Audio
performance also usually rises, thanks to the installation of
larger, higher power, higher performance speakers that won’t
strain to fill a room with high-quality sound.
The most sophisticated custom systems use dedicated
in-wall or tabletop keypads and touchscreens to remotely
turn on and switch music sources, control room volume,
and select songs stored on dedicated music/video servers,
networked computers, networked-attached storage
(NAS) devices and other sources. From the keypads and
touchscreens, consumers also select local radio stations,
internet radio stations and internet music services.
Most multi-room-audio systems can also be controlled
from smartphone and tablet apps, which send commands to
the systems via a home’s Wi-Fi network.
Custom home theater: Multi-room audio systems are
installed by electronic systems contractors (ESCs) who also
install custom home theater systems, which often feature
custom-made cabinetry to conceal video displays, associated
electronics and front speakers. Many custom home theaters
also feature in-wall, on-wall, and in-ceiling speakers to free
up floor space, and many use motorized screens that drop
down from the ceiling to display video from video projectors.
ESCs also integrate multi-room audio and home theater
systems with smart home systems, including lighting,
motorized shades and security systems. As a result,
consumers can use one controller to manage every system in
the house. Custom systems with video servers send HD and
4K Ultra HD movies to TVs in multiple rooms.
Price tags: Because the installations are custom and involve
a lot of labor, a custom job can be expensive. In 2015, the
median price of a custom home theater was $19,582, up
17.5 percent from the previous year and up from $12,000 in
2011, according to a 2016 survey of installation companies
by CEDIA, the Custom Electronics Design and Installation
Association. The average price hit $35,233, up 3.9 percent.
Thanks to an improving economy, the turnaround in new
home construction following the Great Recession, and new
marketing strategies, installers are getting busier, CEDIA
found. For 2016, installation companies estimated their
average number of residential installs would jump to 40
36 Digital America 2017
from 32 in 2015. Among installers who specialized in AV, the
number was expected to hit 63 in 2016 from 2015’s 56.
Custom turnaround: Though growing, the custom
install industry is still down significantly from its peak
because of the mid-2000s collapse of single-family home
construction. New home construction is critical to
installers’ fortunes because custom systems are usually
installed in homes while they are being built, though
renovations also contribute to business.
The housing market returned to growth on a consistent
basis beginning in 2012, though 2016’s 780,900 single-
family starts were still well below 2005’s peak of 1.72
million, preliminary Census Bureau statistics show.
Shifting fortunes: To adapt to the housing collapse,
installers reinvented their business models, putting a
stronger focus on selling into existing homes and enticing
customers to upgrade or expand previously installed
systems. Installers added outdoor speakers to a multi-
room audio system or integrated wireless speakers to
extend a multi-room audio system to additional rooms
without tearing up walls. They also diversified into light
commercial installs in retail stores and doctor’s offices.
U.S. Single-Family Housing Starts, Forecast
(in thousands of units)
2014 647.9 +4.9%
2015 714.5 +10.3
2016* 780.9 +9.3
2017**  855 +9.6
2018**   961 +12.4
*Preliminary Census Bureau statistics as of Jan. 19, 2017 (http://
www.census.gov/construction/nrc)
**NAHB (National Association of Home Builders) 2017-2018
forecasts as of Dec. 27, 2016.
(2017 percentage change based on NAHB’s 2016 base of 780,000
starts.)
Growth drivers: Other factors driving up custom revenues
are changing technologies, more affordable pricing due to
technological advances, the availability of new products,
and the desire to upgrade home theaters with the latest
big-screen 4K UHD TVs with wide color gamut and
HDR. New AV receivers deliver height channels that can
be delivered through in-ceiling speakers.
New technology has opened up new sales
opportunities, such as replacing a thermostat with a
smart wireless thermostat controlled from a smartphone
or tablet. Wireless door locks can be integrated into
custom systems, and wireless lighting control systems can
Portable Audio - U.S. Sales to Dealers (millions) As a result, factory level
portable audio sales were down
MP3/Portable Media players MP3 Player Bluetooth Speakers
Docking Speakers for five consecutive years ending
2015, but in 2016, strong growth
2013 $2,933 -25.3% $285 -10.1% $385 45.8% in headphones and Bluetooth
2014 1,966 -33  213 -25.3 812 110.9 speakers put the portable industry
2015 1,021 -48.1 167 -21.6 1,149 41.5 back in the plus column with an
estimated gain of 1.4 percent to
2016e 735 -28 133 -20.4 1,367  19 $4.59 billion.
2017p 556 -24.40 101 -24.1 1,274  -6.8
MP3-free: Sales of MP3 players
Other Portable Audio** Headphones Total Portable Audio are declining because of music
2013 $176 -23.5% $1,202 0.03% $4,981 -16.1% storing smartphones, whose
household penetration rate hit 83
2014 157 -10.8  1,685 40.2  4,833  -3
percent in 2016 while MP3 player
2015 125 -20.4  2,061 22.3  4,523 -6.4 penetration fell to 38 percent from
2016e 104 -16.8  2,247  9  4,586  1.4 a 2013 peak of 52 percent, CTA
statistics show.
2017p 85 -18.3  2,598 15.6  4,614 0.6
For the three months ending
**Sales include CD and cassette headset stereos, portable tape and digital memo recorders, November 2016, more than 204.7
portable radios, and AC/DC boomboxes. million smartphones were in use
by people ages 13 and up. More
Source: CTA Market Research
than 34 percent of them used their phone to stream music,
be retrofitted in a home because control signal wires no and 27 percent listened to music downloaded over the
longer have to be run behind walls. cellular airwaves, a Comscore survey found.
Also helping is growing consumer awareness of do-it- As a result, factory level dollar sales of MP3 players fell
yourself home automation products, including wireless for the sixth consecutive year in 2016, each year declining
multi-room audio speakers. That awareness is whetting at double-digit percentage rates, CTA found. Dollar volume
consumers’ appetite for higher performance installed slipped an estimated 28 percent in 2016 to a mere $735
systems. million, off their 2010 peak of $7.03 billion.

Portable Audio Adapts to Smartphone Era
Portable audio stabilized in 2016 following years of
declining dollar volume that was driven by collapsing
demand for portable MP3 players, which have been replaced
by smartphones. Like Citizens Band (CB) radios popular in
the 1970s, MP3 players are gathering dust in many drawers
as consumers turn to smartphones to listen to phone-stored
music or stream music from the cloud.
Though smartphones are responsible for the rapid decline
of MP3 players, smartphones have also generated growth
in other portable audio categories, namely portable battery-
operated Bluetooth speakers and stereo headphones.
Portable audio, like home audio, is a diverse industry that
includes portable MP3 players, headphones and Bluetooth
speakers but also embraces MP3 player docking speakers,
portable CD players and memo recorders.
Making portables great again: The portable audio industry
surged with the 1998 U.S. debut of the first mass-market
portable MP3 player and with the 2001 launch of Apple’s
iPod. By 2010, however, MP3 player sales peaked, and they
have fallen every year since at double-digit percentage rates.
Sales of MP3 player docking speakers declined in parallel.
Downloads down: The shift in how people consume music
is striking. In 2016, sales of physical CDs fell 16.3 percent
to 104.8 million, a Nielsen Holdings report found. Digital
album sales also shrank as consumers embraced online
streaming with enthusiasm, pushing down digital album
sales by 20.1 percent to 82.2 million. However, total music
consumption rose when streaming is factored in. The
number of on-demand streams shot up 39.2 percent to
431.7 billion. As a result, total music consumption rose 8.9
percent to an equivalent of 442.4 million albums. (Nielsen
considers 10 individually downloaded songs as equivalent to
an album and 1,500 streams as equivalent to an album.)
Though MP3 player sales are down, sales in a still-small
subcategory are up. High-end high-resolution portable
players (called digital audio players or DAPs) play better-
than-CD quality music files downloaded from a handful of
authorized music-download sites. (See high-resolution audio
section.)
Bluetooth boom: Though cell phones are driving down
MP3 players, sales of portable Bluetooth speakers are
surging because they stream music wirelessly from
smartphones as well as from laptops and tablets. In 2016,

Digital America 2017 37

 AUDIO

Bluetooth speakers are so popular that 44 percent of

households in January 2017 owned a portable wireless
MP3/Portable Media Players speaker including Bluetooth or similar Apple AirPlay
U.S. Sales to Dealers technology, up from 25 percent in 2013, CTA consumer
(Units in thousands, dollars in millions) surveys found.
The sales statistics alone underplay Bluetooth’s
prominence. Bluetooth technology appears in many Wi-Fi-
Units Sales Dollars Sales equipped multi-room speakers, soundbars, AVRs, USB-
equipped DACs, and USB-equipped speaker pairs.
Prices on portable battery-operated Bluetooth speakers
run around $20 for small mono models to as much as $899
2013 19,503 $2,933
for powerful outdoor weather-resistant stereo model. Some
take the shape of retro-style boomboxes with integrated
-26.3% -25.3% carrying handle and built-in radio or CD player.
Some high-performance Bluetooth speakers are AC-only
models, in some cases sold in pairs in the shape of traditional
passive (unamplified) bookshelf speakers at prices up to $799.

2014 15,272 $1,966 Bluetooth skies: Despite strong gains, growth won’t peter
out soon, suppliers believe, because consumers are buying
more than one Bluetooth speaker to meet different needs.
-21.7 -33
In fact, CTA forecasts that unit sales will grow 15 percent
in 2017 to 25 million units and keep growing through
2020.

Headphones - U.S. Sales to Dealers

2015 7,789 $1,021 (Units in thousands, dollars in millions)

Units Dollars
-49 -48.1
2013 60,905 -11.7% $1,202 0.3%
2014 94,096 54.5  1,685 40.2
2015 136,800 45.4  2,061 22.3
2016e 5,842 $735 2016e 135,707 -0.8  2,247 9
2017p 137,089 1.0  2,598 15.6
-25 -28
Source: CTA Market Research

MP3 Player-Docking Speaker Systems

U.S. Sales to Dealers
2017p 4,556 $556 (Unit sales in thousands, dollar sales in millions)

Shipment Revenues (millions) Wholesale Price

-22 -24.4
2013 7,057 -10.0% $285 -10.1%
2014 5,646 -20  213 -25.3
Source: CTA Market Research
2015 4,593 -18.7  167 -21.6
2016e 3,766 -18  133 -20.4
2017p 2,975 -21  101 -24.1
CTA estimated that factory level Bluetooth speaker sales
rose an estimated 19 percent to $1.37 billion, marking Note: Includes AC-only models and portable AC/DC models that
can operate off batteries. Models could include FM tuner.
still another year of consecutive double- and triple-digit
gains. Source: CTA Market Research

38 Digital America 2017

 For many homes, one Bluetooth speaker isn’t enough.
Consumers might use a powerful tabletop model inside the CTA’s Audio
home, for example, but while hiking, they might opt for
a small model that clips onto a backpack. They might opt
Division
for water-resistant and water-proof models that they can CTA’s Audio Division fosters growth and
keep by the pool since some float. Some stick on ceramic profitability for the manufacturers, distributors
tiles in the shower via a suction cup. Some come with an and retailers of consumer audio products.
integrated bicycle handlebar mount.
Key Focus
Dry dock: In contrast to Bluetooth speaker sales, MP3 • Partner with industry organizations to provide
player-docking speaker sales fell for the eighth consecutive education for consumers about quality audio
year in dollars and sixth consecutive year in units in 2016, • Encourage the audio selling community to sell
CTA statistics show. These numbers include docking audio as a value-added solution and provide
speakers with physical multi-pin or USB connections as them with the necessary tools.
well as docking speakers that combine physical docking • Analyze the audio marketplace to provide
with Bluetooth or Wi-Fi technology. members with the information they need to
Docking speakers are on life support. Factory level improve their sales and market share.
dollar sales peaked in 2008 at $995 million, with unit • Grow the division and improve active
sales peaking in 2010 at 11.1 million. In 2016, in contrast, participation from member companies.
dollar sales fell to a mere $133 million, though unit sales
came to a respectable 3.8 million, CTA estimates.
Blame smartphones for the dearth of docks. Consumers Headphone sales: Though MP3 player sales are down,
were happy to dock MP3 players to docking speakers, but sales of stereo headphones that connect to them, to
smartphones users keep their phone within arm’s reach to smartphones, and to home audio systems are up. Sales
quickly answer phone calls, access the internet, check email are up because consumers are replacing worn-out
or run apps. Smartphone users who keep their smartphone headphones or actively stepping up to higher performance
at hand have turned in part to Bluetooth speakers across headphones to improve sound quality.
the room to play smartphone music. Many stereo headphones include active noise-
cancellation technology to cancel out recurring low-bass
Bluetooth Speakers - U.S. Sales to Dealers background noises heard in airplanes, busses and on
(Unit sales in thousands, dollar sales in millions) urban streets. Many also include Bluetooth to eliminate
wires running from the headphones to a smartphone or
Unit Sales Dollar Sales MP3 player. New Bluetooth earbuds eliminate all wires,
2013 3,558 61% 2013  $385 45.8% including the wire connecting the left and right earbud.
Factory level dollar sales of headphones rose an estimated
2014 7,748 117.8 2014    812 110.9
nine percent in 2016 to $2.25 billion and are forecast to rise
2015 12,397  60 2015 1,149 41.5 another 15.6 percent in 2016, CTA statistics show.
2016e 21,696  75 2016e 1,367 19 Headphone gains underscore the disruptive change
that has turned the audio industry on its head. Reflecting
2017p 24,950  15 2017p 1,274  -6.8
busy on-the-go lifestyles, the portable audio segment
Note: Includes AC-only models but mainly consists of portable exceeds the home segment in dollar volume by far. Portable
AC/DC models that can operate off batteries. Models could sales hit an estimated $4.59 billion in 2016, while home
include FM tuner.
audio generated revenues of only $3.34 billion. Portable
Source: CTA Market Research dominance isn’t expected to change anytime soon.

Acronyms
CEDIA Custom Electronics Design and
Installation Association
DAC Digital to Analog Converters
DAP Digital Audio Player
DEG Digital Entertainment Group
DSD Direct Stream Digital
DSP Digital Signal Processing
DVD-A DVD Audio
ESC Electronic Systems Contractors HRA High-Resolution Audio
FLAC Free Lossless Audio Codec HTIB Home Theater-in-a-Box
GUI Graphical User Interface IBOC In-Band On-Channel
HDCP High-Bandwidth Digital MQA Master Quality Authenticated
Content Protection NAS Network Attached Storage
HDMI High Definition Multimedia PCM Pulse Code Modulation
Interface SACD SuperAudio CD
HDR High Dynamic Range

Digital America 2017 39

 LENTA

40 Digital America 2017

DIGITAL
IMAGING
Top Trends
• Suppliers help consumers stay connected
• Emerging technology helps to stabilize the market
• Digital cameras continue to decline in 2017
• 11.1 billion U.S. photos printed in 2016
• 1.2 trillion global images taken in 2017
• The developing film story
•  lobal smartphone shipments hit record
G
1.5 billion units in 2016
• Action from camcorders
• The drone market takes off

Digital America 2017 41

 DIGITAL IMAGING

T
he form factor of digital cameras is definitely According to CTA’s 18th Annual Consumer Technology
changing. “That’s the real story this year for digital Ownership and Market Potential Study (2016), there are now
imaging (DI) as camera suppliers continue to more than half a billion computing devices in U.S. households
focus on new features and changes to design as well as when you take into account smartphones (211 million),
finding new niche markets,” reports Rick Kowalski, CTA tablets (126 million), laptops (154 million) and desktops
manager of Industry and Business Intelligence. “Probably (87 million). These devices enhanced with connectivity have
one of the major stories helping drive the DI sector in opened up the door for a host of emerging technologies, many
2017 is the ‘novelty factor’ with sensor manufacturers of which contribute to industry growth today.
looking for new devices and emerging technologies to put
cameras into. That will help continue the trend of keeping Emerging Digital Imaging Stabilizes
consumers connected and mobile,” he adds. the Market
CTA’s 2017 edition of the U.S. Consumer Technology According to CTA’s July 2016 Experiences and
Sales and Forecasts report reveals emerging technologies Opportunities in Digital Imaging Report, U.S. sales
are driving revenue growth in the near term and volumes revenues of DI continue to experience year-over-year
declines, while mass adoption of mobile devices with
advancing DI capabilities continues to grow. “Even so,
Projected Growth for Five Largest Revenue Categories
emerging tech devices such as 360/spherical cameras and
2015 2016e 2017p action camcorders, as well as upgrades to dedicated DI’s
Smartphones $52,916 $54,504 $55,583 functionalities and high quality image capture has helped
stabilize the market,” Kowalski reports.
Tablet PCs  20,425   17,856 16,384
Kowalski points out that digital cameras are in decline
LCD Flat-Panel   18,804   18,189 16,384 because there are more convenient ways that consumers
Laptop/Notebook PCs   17,112   16,143 17,764 can shoot and share images. “Your smartphone is the
one device that you take everywhere. It’s much easier
Desktop Computers  5,399   4,274 15,643
to share your images and videos from a smartphone via
Total $114,656 $110,965 $109,294 Facebook or through texts or emails. Tablets are another
% of Total Industry  51%  49%  48% device that provide picture taking and immediate photo
sharing opportunities. Both of these product categories
Total Industry (Wholesale) $223,451 $225,089 $228,493 also offer wireless and instant connectivity, which is what
Source: CTA Market Research consumers want. This has a huge impact on this category
as well,” he says.
in those categories continue to rise across the map. Total
wholesale revenues reached $225 billion in 2016, rising Digital Cameras Continue to Decline
0.7 percent over 2015. The consensus is the industry will Digital cameras have been deeply impacted by the rise
grow 1.5 percent to $228 billion in 2017. of smartphones. CTA research shows that consumers
The industry still grew in 2016 at a time when the value convenience when it comes to taking and sharing
largest categories faced headwinds. As recently as 2015, images, which explains why consumers are shifting their
smartphones, computing devices and televisions carried 51 behavior when capturing images. In fact, CTA’s 18th Annual
percent of the industry’s revenue, but a portion will drop to Consumer Technology Ownership and Market Potential
48 percent in 2017. In light of these top categories cooling Study (2016) finds household ownership of digital images
off, their wild ride to success in recent years has had a is at 61 percent, a noticeable decline from 2010 when 80
beneficial effect on the rest of the industry. percent of households reported owning one.

U.S. Consumer Technology Household Penetration Forecast

45% 54% 59% 67%

1 7 12
31 28 27 29
66 64 61 60
64 72 74 83

2014 2015 2016 2017

Tablets Action Camcorders Camcorders Digital Cameras Smartphones
Source: CTA Market Research

42 Digital America 2017

 “Total digital camera shipments are Total Digital Imaging – Sales to Dealers
expected to land at 4.4 million in 2017, a
decline of 16 percent compared to last year. 23,124
All told, digital camera revenues were $2.2
2013
billion in 2016 and are expected to fall to
$1.9 billion in 2017 (a 10 percent decline).
“Two bright spots are action camcorders
and 360 cameras categories which CTA Units (Thousands)
forecasts growth in 2017, with action *Includes digital cameras and digital photo frames
camcorder units expected to grow 44 percent Source: CTA Market Research
and 360 camcorders forecasted to grow 216
percent,” says Kowalski.
“We are also predicting nine percent growth in the
mirrorless camera market for 2017. It’s a small category
but one that is growing. They are more affordable than the
DSLRs and are step up from point-and-shoot models. They
also offer retailers interchangeable lenses and other add-on
accessory sales options. Sony is one of the key drivers in
this area,” he points out.
Where are the Growth Segments?
Ben Arnold, executive director and industry analyst for
consumer technology at The NPD Group reports that
in the traditional form factors (digital point-and-shoot,
camcorders, detachable lens) growth has mostly been
in premium segments of the market. “According to The
NPD Group/U.S. Retail Tracking Service report, premium
digital point-and-shoot (above $1,000) grew 33 percent
in 2016 versus 2015. 360 degree cameras account for just
one percent of total VR/AR headset shipments – so there’s
clear upside. In detachable lens, mirrorless cameras grew
eight percent in 2016 and products above $1,000 account
for more than 40 percent of the market (an increase
from 2015). Growth isn’t widespread, but increases are
happening in crucial areas.”
“With mirrorless sales growing eight percent in
2016 and the premium segment of the market (above
$1,000) expanding; those are bright spots. From a dollar
perspective, mirrorless now accounts for 20 percent
of total detachable lens camera sales, up from just 14
percent in 2014,” he adds.
360° Cameras – U.S. Sales to Dealers
Units Shipment Average
(thousands) Revenues Wholesale
(millions) Price
2015 22 $7  $300
2016e 129 36 280
2017p 407 99 244
Source: CTA Market Research
17,549 13,661 9,861 8,955
$289
$231 $261 $257 $289
2017p
2014 2015 2016e
$5,342 $4,587 $3,511 $2,845 $2,587
Dollar Sales (millions) Average Unit Price
Trends to Focus On
“For 2017 the big trend is the emergence of 3D VR
cameras. The first wave of VR/360-cameras captured
flat (2D) image spheres. The next wave of cameras
(like the Insta360, Vuze and LucidCam) will focus
on capturing VR footage with real depth for greater
realism,” says Greg Scoblete, technology editor at PDN
and Rangefinder. “These cameras won’t be targeted
at consumers but they are cheaper than DSLRs so its
possible enthusiasts will pick them up. 3D VR cameras
will benefit from VR viewers like the Oculus – not Google
Cardboard – since the files will be higher resolution and
need more processing power to render. That will further
limit their appeal.”
Scoblete adds, “As far as conventional digital
cameras are concerned, there are a couple of inter-
related tech trends. The first is better quality video.
Many are embracing 4K resolution. The second is better
image stabilization thanks to a combination of in-body
stabilization (sensor shifting) and lens stabilization. The
two systems work in tandem to deliver better results than
either one working alone,” Scoblete says.
Some Bright Spots
Ed Lee, group director of InfoTrends’ Worldwide
Consumer and Professional Imaging Service (Keypoint
Intelligence) adds there are some bright spots in the
coming year. “There are several features that continue to
march forward. The sensors themselves are a big trend
as camera manufacturers are adding more megapixels
to the mix. You are getting bigger sensors, which, are
leading to higher resolution full frame cameras. 4K
video is another area where the industry is headed and
will be the baseline for ILCs moving forward. High ISO
is another key feature. Many of the newer models are
pushing the envelope for practically shooting in the dark.
To many consumers, the natural light shooting in the dark
is more pleasing to a shot being illumined by a strobe or
speedlight,” he adds.
Camera Shipments Continue to Decline
Total shipments of digital cameras from January to
December 2016 fell 31.7 percent year-on-year to 24.20
Digital America 2017 43
 DIGITAL IMAGING

Digital Cameras – U.S. Sales to Dealers out that around 60 percent of digital
camera launches occur in January and
15,341 11,148 8,336 5,174 4,353
$447
February each year, which sets the
$313 $340 $322 $419
2017p momentum for the other 10 months
2013 2014 2015 2016e
ahead. “In 2016, January/February
$4,798 $3,785 $2,684 $2,168 $1,944 launches were down by 40 percent
compared to 2015, and the full year
Units (thousands) Dollar Sales (millions) Average Unit Price concluded with a reduction of 33
Includes point-and-shoot, replaceable lens and DSLR models percent in total digital camera launch
Source: CTA Market Research activity,” he explains.
Peterson reports that for January/
million units according to a report by the Camera & February 2017, digital camera launches show a reduction
Imaging Products Association (CIPA). However, digital of 60 percent with just 12 models announced versus the
cameras with interchangeable lenses, which are high-price 30 that were introduced during the same months of 2016.
products, account for a greater share of total shipments–27 “If historical patterns follow, the digital camera market is
percent in 2013, 32 percent in 2014, 37 percent in 2015, on pace to deliver only around 25 to 30 unique product
and 48 percent in 2016, coming close to 50 percent. launches in 2017, compared to last year’s 56. This would
continue the reduction shaped by this latest January/
CIPA Outlook for Shipments in 2017 February cycle to represent the lowest yearly launch total
CIPA reports total shipments of digital cameras in 2017 ever recorded by Gap Intelligence.”
are projected to be 21.7 million units, a year-on-year He says that in January 2017, camera launches were
decline of 10.3 percent. Broken down by product-type, down 44 percent year-on-year (nine launches vs. 16),
shipments of digital cameras with built-in lenses are while February launches are down a substantial 80
projected to be 10.5 million units (a year-on-year fall of percent (three launches vs. 14). 
16.7 percent). Of those, shipments are projected to be 1.8 “At CES 2017, five digital camera launches occurred,
million units (a year-on-year decrease of 18.2 percent) versus 10 last year, for a 50 percent reduction. One of
and 8.7 million units (a year-on-year decline of 15.5 the biggest shifts in strategy comes from Canon, which
percent), respectively. pivoted away from its predictable point-and-shoot
Shipments of digital cameras with an interchangeable portfolio refresh to focus on one model only (vs. five in
lens are projected to be 11.2 million units (a year-on-year 2016), the enthusiast-targeted PowerShot G9 X Mark II.
fall of 3.4 percent). Those, shipments are projected to be Canon’s strategy was effective as the traditional brand
1.2 million units (a year-on-year decline of 7.7 percent) reacts after several years of decreased demand for basic
and 10 million units (a year-on-year decrease of 2.9 point-and-shoots. Panasonic ranked as the most-active
percent), respectively. camera vendor of CES 2017 with three launches in the
Shipments of lenses for cameras with interchangeable form of one megazoom bridge and a duo of mirrorless
lenses are projected to fall
6.2 percent year-on-year Pace of Introductions Very Relaxed
to 18 million units. Of
Yearly Digital Camera Product Launches
those, shipments to Japan 2016
and those to regions 80 2015
outside of Japan are 70 2014
projected to decline eight
percent year-over-year to 60
2.3 million units and six 50
Unique Cameras Launched

percent year-over-year
40
to 15.7 million units,
respectively. 30
20
Drastic Drop in
10
Digital Camera
Introductions 0
Scott Peterson, Gap Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Intelligence’s digital 2016 camera announcements down 33 percent compared to 2015 (56 vs. 85)
camera analyst, points
Source: Gap Intelligence

44 Digital America 2017

 Digital Cameras: Product Launches
by Form Factor
30
Unique Cameras Launched
25
20
15
10
5
0 Ultra Compact
Jan/Feb Jan/Feb
2016 2017
*includes products launched from ALL vendors
Source: Gap Intelligence
cameras that include its highly-anticipated Lumix DMC-
GH5, representing an increase over its involvement last
year (two compacts).
Meanwhile, Olympus and Nikon did not make
announcements for the first months of 2017, with the latter
vendor choosing to tout models previously available in its
global portfolio as new for the U.S.,” Peterson reports.
11.1 Billion Printed Photos
Lee says that consumers are printing more photos. “In the
U.S., we estimate that 11.1 billion photos were printed
last year. We are hearing from retailers that a growing
percentage of people are also printing from camera
phones. This is encouraging news. This means people that
are shooting with phones are starting to capture images
that are not only memory worthy but print worthy as
well. In the U.S., about 80 percent of the photos being
taken came off a mobile device.”
He points out that retailers have a tremendous
opportunity to educate consumers on printing from
smartphones, since they can launch initiatives to talk with
customers in the store. In addition, home printer vendors
may consider putting simple and easily understood
instructions on printing from mobile devices in an
obvious place within their printer packaging. Online
photo services could boost mobile printing by offering
incentives on using their photo apps, or by offering videos
on how to use their apps.
Lees reports that respondents to InfoTrends’ 2016
Digital Photography Survey indicated that 46 percent
of their photos were priceless/impossible to replace; 20
percent very important but not irreplaceable/friends and
family have similar photos; 17 percent important but I
can live without them, and 17 percent unimportant/will
delete them at some point. The percentages that were
considered priceless was 42 percent in 2012, up slightly
in 2016.
1.2 Trillion Global Images in 2017
“As to the number of photos taken, we estimate 1.2 trillion
will be taken globally in 2017, with the vast majority being
captured by a mobile phone. 1.1 trillion was our global
estimate for 2016,” Lee reports.
He adds some more interesting global numbers to the
mix. “In the last 160+ years, InfoTrends estimates that 1.5
SLR trillion film photos were taken globally. In the last seven
Mirrorless years, we estimate that 1.5 trillion digital photos were
Bridge taken globally and in the last seven years, we estimate
Compact that more than three trillion mobile photos were taken
globally.”
Lee also points out that Snapchat in its IPO filing said
that more than 2.5 billion Snaps (photos and short videos)
are created every day. “Annualize that number and you get
over 900 billion Snaps a year. About 75 percent of the 1.2
trillion number for images taken by cameras and mobile
devices. These images/videos are disposable/disposable and
will be deleted quickly.”
Digital Camera Prices Rising
Arun Gill, market analyst at Futuresource Consulting says
that in their research, they are seeing a rise in prices across
all digital camera categories driven by a shift in the product
mix, essentially falling demand for entry level products
and more focus on enthusiast/hobbyist photography
equipment.
“Beyond digital cameras, the imaging market has
become fragmented with the increased availability and
choice of photo/video capture devices to suit a wide range
of user applications. Video drones, 360 cameras and
instant print cameras are examples of growth segments in
absolute figures.”
He adds that as with mobile image capture (e.g.
smartphones), hardware developments (dual lens) and
software (VR, AR, 360) are supporting developments in
traditional photography, and now more significantly non-
traditional photography.
Futuresource U.S. Camera
Volume Forecast 2016-2017
DSLRs
2016e: 1.4m -18 percent yoy
2017p: 1.2m -13 percent yoy
Compact System Camera/Mirrorless
2016e: 0.5M +5 percent yoy
2017p: 0.5M +5 percent yoy
Fixed Lens
2016e: 2.7mm -40 percent yoy

2017p: 2.2m -19 percent yoy
2016 estimate, 2017 projection year-over-year. Conducted in
November/December 2016 by Futuresource Consulting.
Digital America 2017 45
 DIGITAL IMAGING

360-degree Segment Expands in 2016

Retail Channel Placements

25
Yearly Digital Camera Product Launches

20

15

10

0
1/4/2015
2/1/2015
3/1/2015

7/19/2015

11/6/2016
12/4/2016
3/29/2015

8/16/2015
9/13/2015
4/26/2015

10/11/2015
11/8/2015
5/24/2015
6/21/2015

12/6/2015

1/31/2016

6/19/2016
7/17/2016
8/14/2016
9/11/2016
10/9/2016
1/3/2016

2/28/2016
3/27/2016
4/24/2016
5/22/2016
360fly Kodak Monster Digital Nikon Ricoh Samsung
*Retail panel includes: Adorama , Best Buy, B&H Photo, BJ’s Wholesale Club, Costco, Fry’s Electronics,
hhgregg, Kmart, MicroCenter, Office Depot, Sams Club, Sears, Staples, Target, and Walmart

Source: Gap Intelligence

The Film Story Continues to Develop Smartphones Still Continue to Grow

Film, as crazy as it might sound, is still a hot story for The end of smartphone dominance is coming but not
2017. Scoblete reports that during the holidays last year, just yet. Kowalski says CTA expects smartphone unit
Amazon released its category sales figures and their top volume to grow three percent per year in 2016 and 2017
selling product in its camera division was instant film from before tapering off to two percent in 2018 and then
Fuji. In addition, seven out of the top 10 products in the going flat in 2020. “Device replacement cycles appear
list were either comprised of film cameras, film or instant to be inching toward 24 months as more consumers opt
film-based products. He notes that Kodak’s Super 8 camera for installment pricing plans and as hardware can better
will ship this summer, adding that it will be interesting to keep up with the average user’s computing demands.
see how that fares. It remains to be seen whether down quarters for
“The people who are still engaged in photography love major devices suppliers such as Samsung and HTC
the art of photography. This makes them more willing to are signs of permanent shift or just merely a blip on
explore things such as shooting on film. Even some pros the radar. It’s clear that consumers won’t go anywhere
are moving back to film. It’s become a way for them to without their smartphones for the forseeable future, so
differentiate themselves from the competition,” he explains. unit volumes may depend largely on organic replacement
He adds that on the high-end camera side of the market rate until the next major breakthrough. The move
there are two new digital medium format camera models. to non-contract cell service means that the natural
One is from Hasselblad and one from Fujifilm that are replacement cycle is no longer set in stone. The average
aimed at a more mainstream mass market audience. “It’s wholesale prices continue to fall across the board for
sort of playing into the same trend that’s driving film smartphones with single-digit declines in all screen sizes
photography as an art form.” through 2020,” he reports.
“The big story in camera phones continues to be the
Total Smartphone Units (U.S.) – Sales to Dealers improvement of smartphone photo capabilities and how
Units Shipment Average that impacts the traditional camera market. Beyond
(thousands) Revenues Wholesale that, I think POV applications and Livestreaming are the
(millions) Price biggest shift in how people are leveraging smartphone
cameras,” adds NPD’s Arnold.
2013 151,000 $42,958 $284
2014 160,221   4 8,867  305 Record 1.5 Billion Smartphones
2015 174,641  52,916  303 According to the latest research from Strategy Analytics,
global smartphone shipments grew three percent annually
2016e 179,880  54,504  303
to hit a record 1.5 billion units in 2016. Apple iPhone
2017p 185,277  55,583  300
recaptured first position with 18 percent global smartphone
Source: CTA Market Research

46 Digital America 2017

 160
market share in Q4 2016, while OPPO grew 99 percent
annually and was the star performer.
Linda Sui, Director at Strategy Analytics, reports, Digital Video Camcorders
“Global smartphone shipments grew an improved nine Retail Placements
percent annually from 403.0 million units in Q4 2015 to by Form Factor
438.7 million in Q4 2016. This quarter was the smartphone
industry’s fastest growth rate for over a year. Smartphone
growth is recovering slightly due to stronger demand in
major developing markets like China and Africa. Global
40
smartphone shipments grew three percent annually from
1.44 billion in 2015 to a record 1.49 billion in 2016.”

0 2012
Total Camcorders
U.S. Sales to Dealers 90

Units Shipment Average

(thousands) Revenues Wholesale 60
(millions) Price
2013 1,633 $162 $99
2014 1,195  290  243 10
2015 777  187  241
0 2013
Retail Placement Count

2016e 484  113  233 70

2017p 344   73   212 60

Source: CTA Market Research

Action Camcorders 2014

U.S. Sales to Dealers 0

Units Shipment Wholesale

(thousands) Revenues Price 70
(millions)
50
2013 1,032 $206 $200
2014 1,930  420  218
2015  2,451  581  237
0 2015
2016e 2,549  496  195
2017p  2,661  451  169 100

Source: CTA Market Research

Neil Mawston, executive director at Strategy Analytics,

40
adds, “Apple shipped 78.3 million smartphones worldwide
and captured 18 percent market share in Q4 2016, rising a
Candy Bar
steady five percent annually from 74.8 million units in Q4 Football
2015. This was the iPhone’s best performance for over a
0 2016
POV
year, as Apple capitalized on Samsung’s recent missteps.
*Retail panel includes: Best Buy, BJ’s Wholesale Club, Costco, Fry’s
Samsung shipped 77.5 million smartphones worldwide Electronics, hhgregg, Kmart, MicroCenter, Sams Club, Sears, Staples,
in Q4 2016, dipping five percent from 81.3 million units Target, & Walmart
in Q4 2015. Samsung lost momentum in the quarter as Candy Bar = Flip Video-style units,
Football = traditional-style,
a result of its Note 7 battery fiasco. Samsung captured
POV = action cameras
18 percent share for the quarter and 21 percent share for Source: Gap Intelligence

Digital America 2017 47

 DIGITAL IMAGING
+40%
the full year, its lowest level since 2011. Samsung will be
banking on the rumored Galaxy S8 model in a few weeks’
time to reignite growth and return to the top spot in
quarterly smartphone shipments. On an annualized basis,
Samsung maintained first position with 309 million units
shipped worldwide in 2016.”
More Action from the Camcorder Market
From YouTube to virtual reality, 360-degree photos and
videos continue to take the digital imaging market to new
dimensions. But it’s not only about consumption—the
latest crop of 360-degree cameras allow consumers and
pros to create more stunning video content as well. “VR
is definitely becoming the next big trend. This is providing
end users with a new way of storytelling. Consumers are
getting used to filming in 360°, filming in VR and making
creative YouTube videos. It is also a new and growing
experimental medium for young filmmakers,” says
Kowalski.
POV Devices Continue to Lead Camcorders
Peterson says overall volume of camcorders stocked by
retailers in Gap Intelligence’s panel has dropped 43 percent
since 2012. “After action cameras surpassed traditional
camcorders in 2014, the POV segment has steadily grown
its lead in the retail channel. Compared to the end of 2015,
camcorder placements actually grew by 14 percent by the
end of 2016 due to POV momentum. While placements
of football camcorders fell 25 percent year-on-year, POV
models are up 43 percent. This boosts POV to a 72 percent
share of the retail market for camcorders, even more
dominant than the 57 percent share that the segment held
at the end of 2015,” he reports.
He says the POV market has attracted a huge variety
of brands. “There are 13 POV brands in retail, while a
total of 45 brands are tracked through online channels.
As many brands are drawn into the POV market, only a
select few have enough clout to make it into the brick-and-
mortar retail channel. Newcomers into the segment this
year include Olympus and Nikon, two traditional camera
makers with strong branding and channel experience that
are aggressively pursuing POV as a new area to offset
declines within the compact camera market.”
48 Digital America 2017
DRONES
3.4 millon units (+40%)
$1.2 billion in renenue (+36%)
Source: CTA Market Research
Consumer Technology Association
360-degree Market Growing
Peterson reports placements of 360-degree shooting
camcorders in retail have soared 63 percent compared
to 2015, representing 18 percent of the POV camcorders
tracked in 2016. In December 2016, the segment was
represented by 22 channel placements, compared to just
three in late 2015.
“In 2015, the 360-degree capture segment was occupied
by Kodak and Ricoh, but only found at photo-specialty and
regional electronics chains. By the end of 2016, 360-degree
placements were held by 360fly, Monster Digital, Nikon,
and Samsung, in addition to Kodak and Ricoh. 360fly is
currently positioned as the dominant 360-degree brand with
54 percent of the retail shelf.”
Peterson says 360fly was the first brand to gain traction
in national retail with a display at Best Buy, which
was enhanced by a secondary placement of its latest
4K-equipped model this year. “360fly has now expanded
with dual SKUs into Target and Walmart, giving the
brand the most visible position in the 360-degree market.
Ricoh chased 360fly into both Target and Best Buy with
its Theta S last year, providing Best Buy’s first model. This
retail expansion shows a growing awareness of 360-degree
cameras among consumers, and illustrates that retailers are
reacting by stocking in-demand technologies for shoppers.
The growth is also attracting involvement from various
brands ranging from crowdfunded start-ups to industry
heavyweights such as GoPro and Nikon.”
Peterson says for an idea of how big a market 360 is
and the speed of 360 growth, the real challenge will be
translating the technology to shoppers as more than just a
gimmick, and allowing easy access to consumption.
“With all of the enthusiasm surrounding this emerging
technology, vendors will have to be mindful to not repeat
the days of 3DTV hype when they were forcing glasses,
versus full-scale headsets and/or cardboard.
 “With an expansion of content availability (Facebook, Digital Photo Frames are Seasonal
YouTube), an uptick in quality, and prosumer involvement Kowalski points out that digital photo frames are mostly
from brands like GoPro, Lytro and Samsung, the seasonal and have traditionally lent themselves as gift-giving
360-degree segment has potential for solid growth, and items. “They are usually big sellers at Mother’s Day, Father’s
is perhaps the innovation needed for both consumer and Day, graduations and around the Christmas holidays,”
pro-level content creators to help invigorate the overall Kowalski says.
declining video hardware market,” Peterson concludes.
Digital Photo Frames
Drones U.S. Sales to Dealers
U.S. Sales to Dealers Units Shipment Wholesale
Units Shipment Wholesale (thousands) Revenues Price
(thousands) Revenues Price (millions)
(millions)
2013 5,118 $176 $34
2013 128 $44 $344 2014  3,276   92  28
2014  450   204   4 55 2015  2,075   52  25
2015  1,145   443   3 87 2016e   1,525   32  21
2016e 2,425   799   3 30 2017p 1,189   20   17
2017p 3,400   1,168   3 43
Source: CTA Market Research
Source: CTA Market Research

The Drone Market Takes Off Digital Imaging Accessories

“With drones, the biggest story is how the market pivots U.S. Sales to Dealers
off of the drone hobbyist. DJI is the largest and best
known drone company and has made some investments Units Shipment Wholesale
(specifically into Hasselblad) that point to a premium (thousands) Revenues Price
direction for the company – pairing their drones with the (millions)
highest quality photo equipment,” says NPD’s Arnold. 2013 22,197 $318 $14
“To me that’s a play for serious photographers and
2014 21,000  294  14
prosumers, not just drone dads. I’m also interested in
2015 18,500  247  13
the action drone market – products featuring the follow
technology like in GoPro’s Karma drone. That’s an 2016e 15,725  201  13
exciting feature and I wonder if there is the same upside 2017p 12,737   156  12
to action drones as there was to action camcorders,” he
Source: CTA Market Research
explains.
“The drone category is continuing to take shape
as new products and features such as 4K cameras, Revenue for Accessories Driven by ILCs
Bluetooth and built-in GPS, reveal an expanding range Lee believes the digital imaging accessories market, in
of use cases. The market is maturing in that respect. The particular for ILC lenses, will provide future revenue
continued interest around unmanned aerial systems and opportunities at retail, but it’s going to take a grass roots
an expanding retail footprint point to a strong 2017 as a effort from manufacturers and retailers to push the message
result,” Arnold adds. to educate potential buyers on what you can do with these
lenses and demonstrate that to them. “The ILC market is
A New Perspective reaching to the core who are dedicated photographers who
Lee says that with the creative use of sensor technology, are interested in photography as a skill and a hobby. They
drones will soon have more camera options and built-in will spend the time and money on accessories to become
cameras on board. “They offer a wide range of commercial better photographers.”
applications such as aerial photography, surveillance and
security, news coverage, filmmaking, law enforcement and Better Battery Life Coming?
real estate. There is an enthusiast market for them but Scoblete says manufacturers are looking for new ways to
it’s more for commercial and pro applications. Drones build a better battery. He says one of the most promising
do provide a unique point of view to get a different efforts is from Solid Energy Systems, which is looking to
perspective for movies and documentaries,” he says. commercialize a variant of the lithium-ion (Li-ion) battery

Digital America 2017 49

 DIGITAL IMAGING
that will double existing battery life or deliver the same
amount of power of a traditional Li-ion battery in a
package that’s half the size.
“The manufacturing process leverages the same
equipment used for lithium-ion manufacturing so it’s
possible these new batteries can be
produced relatively quickly at scale. The
CT Batteries
company released its first battery for drones
U.S. Sales to Dealers
Unit Sales (millions) late last year, followed by batteries for
smartphones and wearable technology at
CES 2017. If it can deliver on its promise,
drone flying times could top off at close to
an hour in the coming year. Looking ahead,
2013 $6,300 mirrorless cameras (which tend to struggle
with power consumption) would see a big
2014 6,375 boost in endurance while DSLRs could tap
the technology’s space-saving virtues to
2015 6,475 shrink in size,” he adds.
2016e 6,600 New Options for Storage
Scoblete adds there will be new storage
2017p 6,732 solutions for professional photographers.
“For pros, USB and Thunderbolt form the
Includes primary, backbone of photo and video workflows.
specialty and There are some exciting new changes
rechargeable batteries ahead,” he reports.
“In 2016, we saw the first introductions
Source: CTA Market Research of both USB Type-C and Thunderbolt 3
products, but this year will be a wave,
especially for Thunderbolt 3. Both
Thunderbolt 3 and USB-C look the same
Flash Media physically, with identical pins on either end
U.S. Sales to Dealers of the cable. You can even plug one into the
Unit Sales (millions)
other, something you couldn’t do before.”
Scoblete predicts that Thunderbolt 3’s
speed means users will soon be able to use
external GPUs to supercharge a computer’s
2013 $4,277
performance just as you use external hard
drives to boost storage. “Traveling will
2014 4,158
also get easier since both Thunderbolt 3
and USB-C offer much more bi-directional
2015 3,742
power than before. External drives that
2016e 3,368
previously needed their own AC power
pack can now plug directly into a USB-C/
2017p 3,031 Thunderbolt 3 laptop and draw power from
it, not an outlet,” he adds.
Includes:
Removable solid
CTA Digital Imaging Initiatives
state storage “Technology is rapidly changing our lives for
devices such as USB the better. And the digital imaging sector is
thumb drives and
SD cards. Does not
providing remarkable innovations in a myriad
include external of ways – whether that’s providing lighter,
hard drives. smaller, sharper 360-degree cameras for
Source: CTA Market Research drones to support critical rescue operations,
50 Digital America 2017
or giving families and friends even better ways to create and
capture the most memorable moments of their lives with
connected action cameras,” says Jeff Joseph, CTA senior vice
president, communications and strategic relationships. “And
more consumers are discovering it has never been easier or
more fun to commemorate your favorite memories. CTA
expects U.S. sales of 360 cameras to grow exponentially in
2017 (more than 200 percent) and sales of action cameras to
increase, as well.”
Joseph points out that in the year ahead, CTA’s Digital
Imaging Division plans to continue its technology and
standards work with stakeholders to help eliminate
friction in the consumer digital imaging workflow –
identifying the ideal consumer experience from image
capture, editing and sharing through output and storage
– and collaborating with firmware and middleware
manufacturers to develop best practices.
“And 2017 research will likely include an analysis of
the consumer’s purchasing journey for capture output
services, and an exploration of how consumers make their
digital imaging purchases and the factors that influence
their purchases. Emerging technologies are significantly
driving the growth of the U.S. consumer technology
sector, and the evolution of digital imaging has a leading
role to play,” Joseph adds.
 
CES 2017 Highlights
CES 2017 was held January 5-8 in Las Vegas, Nevada.
It hit record-breaking numbers for its 50th anniversary
with more than 2.6 million net square feet of exhibit
space. This year, more than 4,000 exhibitors were on hand
presenting hardware, software, services and solutions that
look to shape the digital landscape this year and beyond.
More than 70 virtual and augumented reality companies
showcased their products, innovations and demos.
“A growing number of companies and floor space was
dedicated to virtual reality (VR), augmented reality, drones
and 360-degree cameras. Film was also very hot. There
were a few more new films announced at CES so it’s a very
hot niche in imaging right now. Kodak, Film Ferrania and
Lomography have also introduced (or announced plans to
sell) new 35mm films,” says Scoblete.
He says Panasonic had the most significant camera
introduction with the Lumix DC-GH5 Mirrorless Micro
Four Thirds digital camera, which offers a 20.3MP Digital
Live MOS sensor. “The other trend with digital cameras is
if any companies decide to drop out of the camera market.
It will be interesting to see if this declining market can
sustain this many players.”
Scoblete also believes that 360-degree and VR cameras
will be a major story this year. “2017 will undoubtedly
see more virtual reality camera introductions, but whether
these products will take hold of the public’s imagination in
the way that action cameras did is far from clear.”
 CTA’s Digital
Imaging Division
CTA’s Digital Imaging Division supports the growth
and profitability of the digital imaging industry.
Key Issues
• Extend the CTA reputation into the digital
imaging community.
• Educate CE retailers and consumers about
the complete digital imaging experience,
encompassing cross-category trends,
integration opportunities, and the enjoyment
afforded by innovative imaging products,
services and uses.
• Provide insight on trends and new
opportunities in digital imaging through CTA-
sponsored research projects.
• Grow the division and improve active
participation from member companies.
Lee says that live streaming could be the next big
trend. “It is going to be a very interesting category to
watch in 2017. We are thinking this category could be
the next step in social sharing. It will be interesting to
see how social sharing companies such as the Facebooks,
Merrkats and Periscopes of the world decide to proceed
with this technology. Rich media or augmented reality is
another area at CES 2017 that will continue to grow.”
Lee adds that image sensors are close to being a
commodity item today. “This was quite evident at the
show. Now you can put a camera into virtually anything
and it won’t cost much so you are seeing all sorts of
applications. Cameras are shifting from memory devices
to new ways of storing information. Products such as the
Light L16 now offer computational photography. Today a
digital camera creates and reconstructs image.
“Now what you see is what the manufacturer wants
you to get. It appears to be moving to an area where the
data that’s coming from the images being captured is
becoming much more important,” he adds.
Where is Digital Imaging Headed?
“Heading into 2017, the biggest trend will be how much
of the market turns 360 degrees,” says Arnold. “We’ve
seen the smattering of 360 degree cameras on the market
do fairly well as the VR hype cycle continues. The jury is
still out on how much content people want to view in VR
(games, films, sports, etc.), but having your own content
(photos or videos) in 360° that you can view on Facebook
or through a VR headset is a compelling use case in my
opinion.”
Scoblete says most interesting emerging trends could be on
the software side. “There is a new challenge for consumers
for what they do with their images after they take them. How
they organize, catalogue and save them. We are seeing more
artificial intelligence developments such as Adobe Lightroom,
with automatic tags to help users locate the images they
are looking for. More software programs and services are
adopting this model. The next step will help people find the
best quality photos they have taken,” he reports.
Lee adds the digital imaging industry in 2017 is healthy.
“The format and the function are changing so you have
to look forward to see what’s next and where should you
invest your time and effort. More effort needs to be focused
on the augmented and mixed VR areas because cameras are
going to be a huge part of those devices,” Lee concludes.
Kowalski sees some traditional areas making a come
back. There is the buzz of nostalgia in film much the same
way that vinyl has come back in the music industry. The
market is growing and people are interested in it. Some
well-known companies have figured out a way to license
their brands and make a comeback with some old school
imaging products.
“With the continued popularity of smartphones and
tablets, consumers are taking more images than ever before.
It all comes back to mobility, connectivity and the ecosystems
that support them. Another big trend for 2017 and beyond
continues to be what consumers will do with those images
they take and how they share them with each other,” he adds.
Kowalski sums it up by saying digital imaging is more
than meets the eye. “Today camera sensors are everywhere.
If you think that the camera industry is on its way out, you
couldn’t be further from the truth. But it’s no longer about
the dedicated devices; it’s more about smartphones, drones,
VR devices, devices such as Snapchat glasses, dash cams
on cars and smart home monitoring. Imaging technology is
everywhere and consumers who want quality will continue
to purchase these dedicated devices. As stated earlier,
companies are finding new markets and new devices to put
cameras in and that novelty factor is driving the imaging
market going forward,” he concludes.
Acronyms
AR Augmented Reality
CIPA Camera & Imaging Products Association
DSLR Digital Single Lens Reflex [Camera]
HD High-Definition
ILC Interchangeable Lens Cameras
IP Internet Protocol
POV Point-of-View
VR Virtual Reality
Digital America 2017 51
 GAMING
Top Trends
• New, more powerful versions of consoles emerge
• Increased frequency of gaming hardware updates
buoys sales
• Nintendo Switch launches
• A rebound for Nintendo?
• 4K and HDR gaming on consoles becomes reality
• VR headsets approach mainstream acceptance
CHAOSS

• eSports continue to grow in popularity

52 Digital America 2017

Digital America 2017 53
 GAMING

T
he video game industry has been seeing some Electronic Gaming Consoles
significant gains over the last half decade, riding U.S. Sales to Dealers ($ billions)
the wave of the eighth generation of home video
$4.58 $4.87
game consoles and maintaining momentum thanks to $4.16 $4.21
frequent updates to console hardware by manufacturers.
$3.09
Total electronic gaming revenue rose an estimated 8.6
percent in 2016, to $22.95 billion, according to CTA’s
U.S. Consumer Technology Sales & Forecasts, January
2017. CTA forecasts total electronic gaming sales to
dealers to rise another 5.8 percent in 2017, reaching a
total of $24.28 billion in sales to dealers. 2013 2014 2015 2016e 2017p
While the lion’s share of the industry total can be
Source: CTA Market Research
attributed to software sales, new console models that
launched mid-generation, the emergence of virtual the end of this cycle and the beginning of a new
reality (VR), as well as innovative offerings such as paradigm.” For example, the original PlayStation 4
the NES Classic Mini have helped to maintain revenue and Xbox One models were both introduced in 2013,
growth. In addition to the launch of upgraded versions followed by the “slim” models – the PlayStation 4 Slim
of the Microsoft Xbox One and Sony PlayStation 4, and the Xbox One S – in late 2016. For the most part,
Nintendo released an entirely new console in early 2017, these two models simply expanded on storage capacity
the Nintendo Switch, which has (with the exception of a
been extremely well received in slight boost in teraflops Worldwide
Total Electronic
the first months of availability. for the Xbox One S). System
Gaming Revenue
U.S. Sales to Dealers
Further supporting Sales
($ billions)
Hardware Revision CTA’s predictions (millions)
The biggest story of the eighth of shorter windows
$24.28 generation of gaming consoles between increasingly
has been the increased frequency capable game consoles,
$22.95 of hardware updates for the in September 2016,
$21.12 Microsoft Xbox One and the Sony released the 4.00 1 Wii U
13.9
Sony PlayStation 4. In addition firmware for its systems, 2 PS Vita 15.4
to offering the traditional adding HDR support
$19.96
$19.55
“slim” versions of their consoles for all models of the 3 Xbox One
28.9
that have been offered in past PlayStation 4, as well
generations – often with a new as other features. It
form factor and increased storage
capacity – these new offerings
seems functionality will
continue to be expanded 56.4
4 PlayStation 4

upped the horsepower of their through software as

64.1
predecessors, enabling smoother well as hardware.
framerates and 4K video Two months after
5 Nintendo 3DS
capabilities without breaking the launch of the
‘13 ‘14 ‘15 ‘16e ‘17p
compatibility between the PlayStation 4 Slim,
Includes electronic gaming consoles,
electronic gaming software, e-toys original console models and new Sony released the
and VR/AR eyewear software titles. It may be easier to PlayStation 4 Pro in As of March 11, 2017
Source: CTA Market Research think of these new systems – the November of 2016, Source: VGChartz
PlayStation 4 Pro and Microsoft’s enabling 4K gaming,
upcoming Xbox One X – as higher framerates and enhancing the capabilities of
premium editions for those willing to “future proof” the PlayStation VR headset. Meanwhile, Microsoft
their console purchases for 4K, High Dynamic Range announced that it would release the Xbox One X in Q4
(HDR) and higher framerates. 2017, offering a massive power boost. By comparison,
“The game console market has long been defined by the Xbox One X will offer 6 teraflops, compared to
a five-year cycle wherein new consoles were historically the 1.31 teraflops offered by the original Xbox One,
released at five-year intervals,” CTA said in its biannual and the 1.40 teraflops offered by the Xbox One S. For
U.S. Consumer Technology Sales & Forecasts report. comparison’s sake, the PlayStation 4 Pro offers 4.2
The introduction of new hardware mid-cycle, “portends teraflops.

54 Digital America 2017

 The new hardware iterations have kept demand
strong for the eighth generation of consoles, with
the exception of the Nintendo Wii U, which not only
had the daunting task of following the massively
popular original Wii console, but also failed to gain
much traction in the market or receive much third-
party software support. The PlayStation 4 family of
consoles maintains a strong lead this generation, with
56.4 million units sold worldwide, as of March 2017,
according to VGChartz. Comparatively, Microsoft’s
Xbox One has sold 28.9 million units since its launch
in 2013. The Wii U, however, only sold a meager 13.9
million units since its launch in 2012, before being
discontinued in January 2017.
Much like Little Mac in original Nintendo’s Mike
Tyson’s Punch-Out!!, Nintendo has never been one to
stay down for the count. Nintendo has since rebounded
by launching the Nintendo Switch, a home console/
portable hybrid console, in March 2017. Since launch,
Switch has enjoyed a warm reception, with early sales
(and subsequent supply shortages) reminiscent of the
original Nintendo Wii.
Gaming Products Purchase Intent
Percentage of Households Number of Households Repeat 2017 First-Time 2017*
(millions)
Home Video Game
11%
Console
Portable Game Device 7 8.33
*Assumes never owned or don’t know
Source: CTA Market Research
Nintendo: Back in the Game?
Despite dismal sales of the Nintendo Wii U, a number
of smaller, successful product launches along with the
recent release of the Nintendo Switch, point to a bright
future for Nintendo. In fact, a number of Nintendo
products, not just the Switch, have faced supply
shortages due to their popularity.
First launched in 2014, Amiibo is Nintendo’s
wireless connectivity and storage platform in the form
of connected cards and figurines which work with the
Nintendo Wii U, Nintendo 3DS and Nintendo Switch
gaming systems. In addition to appealing to gamers
for their collectability, figurines of titular Nintendo
characters such as Mario, Luigi and Link from the Zelda
series are capable of connecting to these systems via near
field communications (NFC). Tapping these figures to a
Wii U GamePad controller or other connected devices
enables in-game perks. In addition to the figurines,
Nintendo also debuted Amiibo cards, which work the
same as figurines without the additional bulk. As of
September 2016, 39 million Amiibo figurines and 30.6
million Amiibo cards were sold, according to Nintendo,
often with preorders selling out before the products
became available to the public.
Similar scarcity could be seen after the surprise
launch of the Nintendo Classic Edition, also known
as the Nintendo Classic Mini – a miniature replica of
the original Nintendo Entertainment System (NES).
This tiny, plug-and-play device connects to TVs
via HDMI and allows nostalgic gamers to play 30
built-in titles from the original NES, including such
classics as Castlevania, Super Mario Bros. and The
Legend of Zelda. In late April, Nintendo of America
president Reggie Fills-Aimé told TIME magazine that
the Nintendo Classic Edition had sold more than 2.3
million units since its launch in November 2016. The
mini console’s popularity may have surprised Nintendo,
as Fills-Aimé said, “We just didn’t anticipate how
incredible the response would be.” Once again, this
reception resulted in supply shortages, with resellers
selling the hard-to-find mini consoles for hundreds of
dollars more than the suggested $59.99 retail price.
13.09 79% 21%
62 38
Despite the overwhelming popularity of the Nintendo
Classic, Nintendo shocked the industry when it
announced in April that it was discontinuing the mini
console after just five months on the market. A Nintendo
representative told IGN “NES Classic Edition wasn’t
intended to be an ongoing, long-term product. However,
due to high demand, we did add extra shipments
to our original plans.” However, gamers’ hopes of
revisiting the classics of their childhood might not be
completely dashed. Multiple sources have reported that
Nintendo plans to release a miniature replica of the
Super Nintendo Entertainment System (SNES) for the
2017 holiday season, offering gamers an easy plug-and-
play solution in the same vein as the original Nintendo
Classic.
Yet, the biggest splash Nintendo made in the past
year was the release of its console/portable hybrid, the
Nintendo Switch, in March 2017. Previously codenamed
the Nintendo NX, the Nintendo Switch was unveiled in
October 2016, confirming reports that the new console
Digital America 2017 55
 GAMING

would function as both a home console, capable of
connecting to an HDTV via a docking station, but also
as a portable gaming system when removed from the
dock. In addition to the novel design, Nintendo courted
third-party developers
prior to launch
Top Ten Selling Games - and included more
U.S. March 2017 standardized hardware
– basing the system on
NVIDIA’s Tegra system
on a chip (SoC) – in
Ghost Recon: hopes of bolstering the
Wildlands console’s software
Legend of Zelda: library.
Breath of the Wild* The efforts appear
Mass Effect: to have paid off. Before
Andromeda the system launched,
Horizon: Zero Nintendo announced
Dawn* that more than 100 titles
MLB The Show were being created by 70
17* developers. Developers
Grand Theft weren’t the only ones
Auto V to respond, however, as
For Honor gamers eagerly snatched
up systems on and after
NBA 2K17
the March 3rd launch,
Nier: Automata once again resulting in
Call of Duty: supply issues. According
Infinite Warfare to Nintendo’s 2016 fiscal
year earnings report,
the company sold 2.74
*Does not include digital sales
million units in the first
Source: NPD Group
month of availability,
making it the biggest ever
hardware launch for Nintendo. To put these numbers
in perspective, the Nintendo Switch sold one-fifth of the
total Wii U units sold in just one month. Interestingly,
according to Nintendo, one launch title – Zelda: Breath
of the Wild – sold more units (2.76 million) than the
console itself over the same period, perhaps due to
digital sales or preorders in anticipation of a planned
console purchase.
After a few disappointing years for Nintendo
following the launch of the Wii U, the company
appears to be back at the forefront of gaming hype and
anticipation. In its recent 2016 fiscal year earnings,
Nintendo reported an operating profit of 178 billion
yen ($1.6 billion) for the last quarter. Nintendo also
shows no signs of slowing down. In late April, Nintendo
revealed its new version of the 2DS handheld – the
Nintendo 2DS XL – to be released in mid-2017.
VR/AR Eyewear
U.S. Sales to Dealers
1,000
$495
202 $100
0
2015
4,000
3,000
3,000
2,000
$990
1,000 $330

0
2016e
Electronic Gaming Software
U.S. Sales to Dealers (billions)
$15.97 6,000
5,357

$15.07 $16.61 5,000

$13.70 4,000

3,000
$12.51
2,000 $1,414

1,000
$264
0
2017p

Units [thousands]
Revenue [millions]
Average Selling Price
‘13 ‘14 ‘15 ‘16e ‘17p
Source: CTA Market Research Source: CTA Market Research

56 Digital America 2017

 Mainstreamed: eSports
eSports, or competitive (and often eSports Revenue Growth
streamed or televised) video game Global | For 2015, 2016, 2017, 2020 | Q1 2017
competitions, continue to rise in Total
Revenues
popularity. Market intelligence +35.6% China & North America
firm Newzoo predicts 2017 CAGR
2015-2000 will generate
Total Revenues
revenue streams for eSports to
reach $696 million worldwide,
(Media Rights, Advertising, Sponsorship,
Merchandise & Tickets, Game Publisher Fees)
$1488
$362M
in 2017, or 52% of global

41+37+157A
million
an increase of 41.3 percent, and Brand Investment Revenues
(Media Rights, Advertising, Sponsorship) eSports revenues
predicts the market will reach
$1.49 billion by 2020. Meanwhile,
the firm predicts that eSports Total
Revenues
$1220 7% 41%
million
15%
audiences will grow 19.6 percent +41.3%
Total YoY
Revenues
in 2017 to 194 million people, $696M
+51.7% $696 2017
reaching a total global audience of YoY million
303 million by 2020.
$493 37%
Speaking of audience growth, million $517
$325 million
eSports may have an opportunity million
$350 China
to be played on the biggest global million
$230 South Korea
platform of all. In mid-April, million North America
the Olympic Council of Asia Rest of World
2015 2016 2017 2020
announced that eSports will be
an official medal sport at the 2022 Source: Newzoo, 2017 Global eSports Market Report
Asian Games in China. The Asian
Games, recognized by the International Olympic Committee, 2016, California-based NRG eSports, an eSports organization
are considered the world’s second largest multi-sport with a five player team competing in the popular game
event after the Olympics. The Asian Games being the first League of Legends, announced that Alex Rodriguez, Shaquille
to embrace eSports should come as no surprise, as Asia- O’Neal and Jimmy Rollins contributed to the company’s latest
Pacific countries account for 51 percent of the global eSports financing round. In January, the Big Ten Network (BTN) and
audience, according to Newzoo. Riot announced they would expand upon this competition,
Growing interest in eSports is not limited to the Asia-Pacific offering a season of conference play, with select matches
region, however. Stateside, the mainstream popularity of being televised by BTN. The PAC-12 college conferences has
eSports can be seen in popular culture and investments. In also expressed interest in eSports competitions. Meanwhile,
in April 2016, BTN announced
eSports Revenue Growth it would host a League of
Global | For 2015, 2016, 2017, 2020 | Q1 2017 Asia-Pacific will Legends competition, in
Total account for collaboration with Riot Games,
Audience
between two universities in the
Occasional Viewers
+20.1%
CAGR
2015-2000
51% Big Ten Conference.
of eSports Enthusiasts

51+18+13A
Esports Enthusiasts These aren’t the only cases
in 2017
Total 303 of eSports arriving in the
Audience million
+19.6% living room – eSports were
Total 13% 51%
Audience YoY featured in an episode of the
+36.6% CBS legal show Bull, where
YoY 194 18%
million 191M the main character helps a
2017
161 professional eSports player
million 286
million sue his manager.
115 18%
million 191 eSports are both
162 million
mainstream and here to
120 million
North America
million stay, and the opportunity
European Union
Rest of World presented by this new form
Asia-Pacific of entertainment is not to be
2015 2016 2017 2020
ignored.
Source: Newzoo, 2017 Global eSports Market Report

Digital America 2017 57

 GAMING
Consistent Software
While mid-generation hardware updates have avoided
the traditional dip in console sales as household
penetration increases, software sales have remained
as consistent and strong as they have in previous
generations – a pattern that bodes well for total gaming
revenues. As usual, software sales continue to make up
the majority of revenue, accounting for $15.97 billion
of the industry’s $22.95 billion in 2016, according to
CTA estimates. This pattern is expected to continue into
the foreseeable future, with CTA forecasting software
sales to dealers will account for $16.61 billion of the
industry’s $24.28 billion in 2017.
Strong multiplatform releases like Ghost Recon:
Wildlands and Mass Effect: Andromeda were
performing well in early 2017, while exclusives like
Nintendo’s Zelda: Breath of the Wild and Guerilla
Game’s PlayStation 4 exclusive Horizon: Zero Dawn
58 Digital America 2017
were making an impact for their respective consoles’
software libraries. As new game console models continue
to fly off shelves, and the Nintendo Switch’s library
grows, expect software sales to do the same.
Gaming: Virtual Reality’s Incubator
In the March/April issue of CTA’s It Is Innovation
(i3) magazine, John Gaudiosi wrote, “PC gaming
has been at the forefront of many new innovations.
Consider virtual reality as well as 4K gaming, which
has been buoyed by an influx of 4K PC monitors from
companies like Dell, Samsung and BenQ. Now the
console business is following suit.” This also holds true
for VR technologies, with PC gaming serving as the
MICHAL-ROJEK
proving ground for the first mainstream VR headsets,
the Oculus Rift and the SteamVR-powered HTC Vive.
These headsets are joined by the mobile sector, with the
smartphone-powered Samsung Galaxy Gear VR and

Google Daydream headsets, and finally by consoles with
the release of the PlayStation VR headset, released in
late 2016.
Microsoft, for its part, has partnered with Oculus
to offer an Xbox One controller with the Rift, and
previously had demonstrated its augmented reality (AR)
headset, Microsoft HoloLens.
Going forward, the company announced plans to
bring mixed reality (MR) offerings to Xbox One and
the upcoming Xbox One X. Little is known about the
upcoming plans, but Microsoft has partnered with a
number of companies including Acer, Asus, Dell, HP and
Lenovo. Important to note is the ease with which these
headsets will work with not only the Xbox One and
Xbox One X consoles, but also with Windows 10-based
PCs.
While VR gaming may still have a ways to go to find
its “sea legs,” viable consumer options have arrived.
“Despite some analyst skepticism, VR successfully
landed in time for the 2016 holiday season,” CTA
noted in its U.S. Consumer Technology Sales &
Forecasts. “Across the category, reviews of mainstream
units (Sony, Oculus, HTC and Samsung) have been
very positive. What appears to be lacking now is a deep
catalog of content, most notably AAA gaming titles in
VR, which the industry promises are forthcoming in
2017.” CTA estimates three million VR headsets were
sold to dealers in 2016, with 5.4 million expected to be
sold in 2017. These shipments resulted in $990 million
in revenue for 2016, and CTA expects revenue to climb
43 percent in 2017 to $1.41 billion.
In much the same way that PC gaming led the
way for VR gaming, VR gaming may lead the way
for future, disparate applications of VR technology.
For example, at its CES® 2017 press conference, Intel
provided each member of the press with a virtual
reality headset. The company then proceeded to give
attendees a number of VR-based experiences, including
taking them on a tour of the Ban Gioc waterfall in
Vietnam, among other global locations, then taking
them courtside to a NCAA basketball game. The
courtside demonstration relied on VR technology Intel
obtained with its late 2016 acquisition of VR startup
VOKE – a move the company made to bolster VR
strategy and business. These are just two examples –
tourism and sports entertainment – of the potential
ripple effect VR technologies may have across all
entertainment industries.
In fact, VR may prove to have benefits well beyond
entertainment and storytelling. In early 2017, a team of
psychologists from Cardiff University in the UK began
working on VR simulations in hopes of diagnosing
and treating vertigo. VR will be an area to watch
going forward, and not just relative to gaming or
entertainment. As VR headsets find their footing in the
gaming sector, and consumer awareness grows, these
technologies could have an impact across the consumer
technology and entertainment spectrums.
Acronyms
AR Augmented Reality
BTN Big Ten Network
HDR High Dynamic Range
MR Mixed Reality
NES Nintendo Entertainment System
NFC Near Field Communications
SNES Super Nintendo Entertainment System
SoC System on a Chip
VR Virtual Reality
Digital America 2017 59
60 Digital America 2017
 HEALTH
& FITNESS
Top Trends
•  lobal shipments of wearable technologies reached 22
G
million units in the first quarter of 2017, a 21 percent
increase from the 18.2 million wearables shipped
worldwide in the first quarter of 2016, says research
firm Strategy Analytics. The growth was driven by strong
smartwatch demand in North America, Western Europe
and Asia.
•  trategy Analytics also reports that Apple overtook Fitbit
S
as the world’s number one wearables vendor in Q1 ’17,
by shipping 3.5 million smartwatches in the period — a
59 percent increase over the 2.2 million smartwatches
Apple shipped in Q1 ’16. As a result of this growth, Apple
captured 16 percent of the global wearables market
share, the firm says. By comparison, Fitbit shipped 2.9
million wearables globally in the first quarter of this
year, a 36 percent drop from the 4.5 million units it
shipped in the first quarter of last year.
•  .S. smartwatch shipments are projected to fall to 8.1
U
million units this year from 9.0 million last year and
10.59 million in 2015, according to CTA’s U.S. Consumer
Technology Sales & Forecasts. By comparison, unit
shipments of health and fitness technology (which
includes fitness activity tracker bands) will grow to 37.43
million units this year from 31.43 million units last year
and 25.48 million units in 2015, CTA says.
•  .S. shipments of “hearables” — devices worn in the
U
ear to track various vital signs or receive audio and voice
signals — are expected to grow to 2.94 million units
this year from 2.1 million units last year and 1.4 million
units in 2015, CTA’s U.S. Consumer Technology Sales &
Forecasts predicts.
•  ealth and fitness oriented wearables will play a
H
prominent role in U.S. healthcare, CTA concludes in a
report titled Wearable Health and Fitness Technology in
U.S. Medical Care, published in January. The reason:
medical-grade wearables will generate data that
healthcare providers can use to manage or treat chronic
conditions, conveniently and efficiently — potentially
saving billions of dollars in healthcare costs. However,
too much variability in the accuracy of today’s wearable
device data poses a challenge, as does integration of the
data into electronic health records.
•  o foster greater accuracy and consistency in
T
wearables-generated data, CTA last fall published two
DOLGACHOV

technology standards: ANSI/CTA-2056, Physical Activity

Monitoring for Fitness Wearables; and ANSI/CTA/NSF-
2052.1, Glossary of Terms for Sleep Wearable Devices.

Digital America 2017 61

 HEALTH & FITNESS
T
he era of wearable technology is upon us — both
literally and figuratively.
Consumer Demand Drives
Product Diversity
“We’re seeing wearables move off the wrist and to other
parts of the body,” in the form of connected footwear and
clothing (smart textiles and fabrics), says Ryan Martin,
principal analyst covering emerging technologies at ABI
Research in Boston, MA, and a CES Innovation Awards
judge (for the wearables, Internet of Things and smart home
categories). He says, “There’s also an interesting bifurcation
happening between medical-grade health and fitness apps
and offerings and consumer oriented fitness companions.
It’s increasingly relevant for companies to think of this more
holistically, especially as they try to orient their offerings
around services and solutions, rather than products and
applications.” The aim is to create a direct tie between the
brand behind the product and the consumer, he says.
Martin says this was evident at CES 2017, where
Under Armour (UA) introduced new Athlete Recovery
Sleepwear that blends “bioceramics” into the fabric lining
said to promote better sleep and connected footwear that
works with UA’s Record mobile app. An update to this
app announced at CES includes a new 14-day sleep score
function that works with the company’s own UA Band, a
phone or a third-party sleep tracker and offers insight into
the user’s sleep quality and patterns plus tips on how to
improve these.
Consumer Technology Wearables Revenue (millions of dollars)
6000
5000
4000
3000
2,115 5357
2000 1,508
$5357 $1,016
1000 542
$95 65
$0
0
2013 2014
Source: CTA Market Research
Similarly, Google has partnered with jeans maker Levi’s
on Project Jacquard, which has developed conductive yarns
that can be woven into fabric, allowing a garment to be
used for touch and gesture control of a smartphone. Levi’s is
expected to commercialize the technology in its Commuter
Trucker Jacket this year.
Martin also cites DuoSkin, a form of temporary tattoo
that uses gold metal leaf to sense touch, display output and
wirelessly communicate (via near field communications or
62 Digital America 2017
NFC) with a smartphone app. And MC10 makes stretchable
biometric sensors that can be placed on the skin and used to
collect and analyze health-related data.
In April, CNBC reported that Apple is working on
technology for detecting blood glucose levels with a
wearable sensor that could be embedded in a future
generation of the Apple Watch. The effort follows earlier
projects by Google to develop other types of glucose
monitors that don’t require blood to be drawn from a
patient, including research on a glucose monitoring contact
lens that began in 2014.
ABI is forecasting the total market for wearable devices
will grow to 608 million units by 2022 from 184 million
units in 2016. The market for fitness trackers will grow to
170 million in 2022 from 107 million and the smartwatch
market will grow to 84 million from 19.5 million in the
period, ABI predicts.
The figures are smaller but the growth rate is high in the
smartwatch category, Martin observes, and he anticipates
it will stratify greatly this year as brands such as Fossill,
Casio and Movado introduce “hybrid” models to appeal to
specific buyers, such as hikers, business professionals and
fashion trend setters.
Fitness or activity trackers and smartwatches have
been the core of the U.S. wearables market, coming to
critical mass adoption, says Weston Henderek, director of
connected intelligence at NPD Group in San Diego. Last
year, he says, 18 percent of U.S. adults owned an activity
tracker (which encompasses connected sports watches), up
Health & fitness tech Smartwatches
Wearables Total
5,384 5,386 5,524
3,052 3,219
2,699 264
1,996
148 223 309
2015 2016e 2017p
from 10 percent in 2014. Smartwatches achieved 7.5 percent
penetration, up from two percent. This year, Henderek says,
NPD believes activity trackers will spread to between 21
and 22 percent penetration and smartwatches will garner 11
percent penetration.
And more built-in sensors mean today’s wearables
offer more additional capabilities than prior iterations.
Certain functions, such as heart rate monitoring, are now
considered essential, Henderek says. At the end of Q4
last year, 56 percent of activity trackers offered heart rate
monitoring, up from 32 percent at the same time in 2015,
he notes. “There’s much more of a focus on tracking a
wider range of sports,” including swimming, “without
the user having to go in and make adjustments through
an app, and we’re going to see a lot more of that over the
course of the next year,” he adds.
Like gyms, Henderek says activity trackers are subject
to a high churn rate — that is, many users don’t stick
with them long after the initial attraction. So, makers
have enlisted their own third party apps “to try and
drive engagement further,” he says. “I think that’s going
to be a core focus, moving forward,” along with greater
emphasis on health and wellness. That would include sleep
monitoring and tracking heart rate variability over time to
give an overall picture of the user’s physical state.
Research by Adidas — the Adidas Wellness Poll 2017
— has found that nearly 70 percent of people are likely to
use an app if it links them to workout partners who are
comparably fit.
But “looking out at 2017, 2018 and beyond,”
companies like Adidas should do better at mining a
user’s data and presenting holistic results that are “very
personal,” says Meg Burich, the vendor’s marketing
director for digital sports, based in Chadds Ford, PA.
In March, Adidas introduced the Adidas ALL DAY app,
which seeks to motivate users around what Burich says are
four pillars of athletic performance: movement, nutrition,
mindset and rest.
Burich says data is the app’s foundation and “our vision”
is to build an “ecosystem” or “platform” that links to “third
party apps or third party devices that can bring data in.”
Better Data Leads to Intelligent Healthcare
“We’re looking at the advent of the most profound
impact on the way we practice healthcare — both
wellness and prevention as well as taking care of people
with serious conditions. We’re really at the inception of
the most profound change in that regard, easily on par
with the introduction of antibiotics and anesthesia 100
years ago,” says James Mault, MD, vice president and
chief medical officer at Qualcomm Life in San Diego, and
chairman of CTA’s Health and Fitness Technology Board.
“That sounds pretty dramatic,” he concedes, “but we’re
just in the early stages of experiencing massive disruption
in healthcare, and digitization is to thank,” he says.
Wearable sensors let continuous streams of digital data
about a patient’s health supplant the usual intermittent
analog snapshots gleaned from in-person interactions
(such as an annual check-up in the doctor’s office).
Qualcomm Life provides medical-grade backend
platforms and other technologies that connect the
“Internet of Medical Things” — such as CPAP machines
used at home by sleep apnea sufferers — to electronic
CTA’s Health and
Fitness Division
CTA’s Health and Fitness Technology Division explores
the area of the industry where health and fitness
meets consumer technology. This group seeks to
raise awareness of how consumer technologies and
services can help improve health and fitness.
Key Focus
• Conduct consumer and industry market research
around health and fitness technology products,
apps and services.
• Ensure that health and fitness technology
devices, apps and services, can thrive in a sound
regulatory environment that balances innovation
with safety and privacy.
• Collaborate with the medical community to
identify ways that health and fitness technologies
can deliver better health outcomes.
• Support Tech & Standards initiatives to create
performance benchmarks or other standards to
advance consumer acceptance of the wearables
industry and other health and fitness technology
categories.
medical records systems, enabling healthcare providers to
capture, integrate, analyze and manage the associated data.
“The average patient in the operating room and in the
intensive care unit is generating about a million pieces of
data per hour” from bedside monitors, Mault notes. “And
yet [a doctor] can never pay attention to a million pieces of
data and be able to make sense of it, so 99 percent of the
data is actually never seen or digested by a clinician,” he
says. “What’s exciting is now we’re able to tap into that data
and capture it digitally,” then run it through a predictive
algorithm and generate useful analyses.
“You’re going to see, over the next 10 years, every single
aspect of healthcare become what we call intelligent care”
because of wirelessly connected wearable sensors, Mault
says. “The practice of medicine is going to start to leverage
these capabilities. When you incorporate virtual care with
sensors that are really cheap and inexpensive and can
connect and transmit their data, probably 80 percent of
traditional office visits should be delivered in your home.”
At CES 2016, Mault points out, Dwight and Church Co.
Inc. introduced the First Response Pregnancy PRO Digital
Pregnancy Test and App Access, the first Bluetooth Smart-
enabled home pregnancy test. It leverages a disposable
Bluetooth Smart module developed by Qualcomm Life to
wirelessly connect with a smartphone app that provides a
variety of customized, pregnancy-related content to the user.
Digital America 2017 63
 HEALTH & FITNESS

FITNESS
AND ACTIVITY
TRACKERS
+22%
31.7 millon units (+22%)
$2.6 billion in renenue (+24%)
Source: CTA Market Research

Consumer Technology Association

At CES 2017, Omron Healthcare Inc., previewed Project

Zero 2.0 Wrist Blood Pressure Monitor, its next-generation
wristwatch-like connected device that measures blood
pressure with clinical accuracy, gauges physical activity and
sleep, and syncs with an Omron app to track the resulting
vital statistics. It also shares the results with healthcare
providers. This device is similar to the Omron HeartVue
What types of wearable wrist blood pressure monitor, slated to be released this
health tracking devices do spring. More, the company launched EVOLV, a single-
you currently own? piece upper arm blood pressure monitor that doesn’t
require tubes, wires or an adjunct tabletop unit, and which
27%
uses Bluetooth to transmit clinically accurate data to the
Own a wearable 39%
tracking device 26% companion Omron Connect US app. The app, in turn, can
20% be used to e-mail the data to a healthcare provider.
19%
To be sure, healthcare is not necessarily what’s driving
27% consumers to buy wearables, according to CTA research.
Fitness-related 20% A CTA consumer report titled Consumers Journey to
13% Purchase: Health & Fitness — found that most consumers
7% bought wearables for improving fitness rather than for
Consumer 16% improving health and were concerned about the security of
related 4% sharing their health data with physicians.
3%
Meanwhile, a recent CTA market research report released
5% in January titled Wearable Health and Fitness Technology
Clinical related 7% in U.S. Medical Care, revealed that most physicians are not
(mobile blood pressure
monitor, oxlmeter)
6% incorporating wearables into their work with patients, that
4%
consumer interest in wearables does not lead to long-lasting
usage, and that the data generated by wearables is not
73%
uniformly accurate enough to be useful to physicians. Thus,
I do not own a 61%
wearable device 74% CTA concludes in the report, a market shakeout is coming
80% that will whittle the number of health and fitness wearables
available to a subset of the 300 available at publication time,
1%
and manufacturers of consumer-grade devices will explore
Other 1% making medical-grade devices.
1% Last year CTA began working closely with the U.S.
All Food and Drug Administration (FDA) to better define
Millennials (18-34) how consumer-grade health and fitness devices and apps
Generation X (35-54)
Baby Boomers (55+) should function and address “the grey area” that might
not be so obviously defined, says Kinsey Fabrizio, CTA’s
Source: Salesforce Research

64 Digital America 2017

senior director of member engagement. This is in addition
to guidelines for “fair and responsible privacy practices
with consumer data” that the CTA Health and Fitness
Technology Board created in 2015. “We probably will give
those a refresh later this year,” Fabrizio says.
Increased attention to clinical accuracy is key, too, Mault
asserts, criticizing some of today’s consumer-grade wearables
for being dangerously imprecise. A wearable heart rate
monitor could be wrong by as much as a 20 percent margin,
he says, declaring that sort of data “junk” from the doctor’s
perspective.
Wearable sleep monitors are deficient as well, says Colin
Lawlor, CEO of SleepScore Labs, a new company launched
at CES 2017 that is striving “to compile and analyze the
most comprehensive and accurate collection of consumer
sleep data on the planet,” in conjunction with selling its
own non-contact sleep monitor, the S+, and licensing its
technology to manufacturers of other consumer sleep
tracking devices.
The three pillars of health are diet, exercise and sleep,
Lawlor says. Although diet can be helped by “harmonized
food labeling” and exercise is aided by heart rate
monitoring and step counting, “when we get into sleep, the
problem has been historically that there is no single, simple
measure.” And that’s compounded now by a proliferation
of devices that “claim to measure sleep” but “do it very
poorly,” he says.
Hospital-based sleep studies are done with a technology
named polysomnography (PSG) that comprises 16 to 18
sensors attached to all parts of the body, including the brain,
Lawlor explains. It uses a complex computer algorithm
to determine the patients sleep state each 30 seconds. “So,
if you want to develop a monitoring technology that is
providing people reliable information, you have to do that
versus the gold standard” of PSG, Lawlor declares. “And
that’s the rub. Most of the technology is developed on an ad
hoc basis with very limited testing.”
Many sleep monitors don’t measure “wakefulness” and
are unable determine the stage of sleep a person is in, Lawlor
adds. Thus, the monitors cannot tell the difference between
being lightly asleep, in deep sleep or rapid eye movement
(REM) sleep.“The issue is knowing when the person is
awake. That’s where the science comes in.”
The S+ “sensitivity to wake” is 80 percent accurate for
each 30 seconds, whereas by comparison a wearable sleep
monitor could be only 20 percent accurate, Lawlor asserts.
“Only one in five times when you’re awake does it know it,”
and “as a result many of these devices over-score sleep” by
up to 1.5 hours on average, he adds.
To address inaccuracies like these, CTA released two
industry standards last year: one that defined methodologies
for sleep tracking devices and apps (defining terms), and
another intended to ensure uniformity among activity
monitors.
This year, CTA is going further, Fabrizio says, pursuing
standards around the actual measurement of sleep and heart
rate, as well as stress and brainwaves.
Acronyms
ANSI American National Standards Institute
FDA Food and Drug Administration
NFC Near-Field Communications
REM Rapid Eye Movement

CTA Standards
Released in 2016:
 • ANSI/CTA/NSF-2052.1, Glossary of Terms for Sleep Wearable Devices
 • ANSI/CTA-2056, Physical Activity Monitoring for Fitness Wearables – Step Counting

Objectives for 2017:

 • R6.4 WG 4 Consumer Stress Monitoring Technologies: The WG is tasked with creating definitions and
performance standards for consumer stress monitoring technologies. The WGs first project will be ANSI/CTA-
2068, Definitions and Characteristics of Consumer Stress Monitoring Technologies. The standard will define terms
related to stress and stress indicators that are relevant for stress monitoring technologies.
 • R6.4 WG1 Sleep Monitors: developing ANSI/CTA-2052.2, Methodology of Measurement for Features in Sleep
Tracking Consumer Technology Devices and Applications.
 • R6.4 WG2 Physical Activity Monitoring:  working on ANSI/CTA-2065, Physical Activity Monitoring for Heart Rate
and Related Measures.
 • R6.4 WG3 Consumer EEG Data: working on the development of ANSI/CTA-2060, Interoperability Standards Series
for Consumer EEG Data – File Storage.

Digital America 2017 65

 HOME
THEATER
Top Trends
• Ultra HD offers superior picture
• High dynamic range becoming more common
• Soundbars thrive
HIGHWAYSTARZ-PHOTOGRAPHY

• HTiB popularity dwindles

• Component audio demand increases

66 Digital America 2017

Digital America 2017 67
 HOME THEATER
TELEVISIONS
+51%
A
ll you need to build a home theater is a high-
definition TV with minimum 40-inch screen size, a
video source delivering a minimum of 5.1 surround
sound channels, and a home audio system that delivers a
minimum of 5.1 audio channels.
A minimalist home theater set-up consists of a smart
TV with surround-supporting video streaming apps and a
sound bar with surround-virtualization technologies that
deliver sound to the front and sides of you.
The launch of 4K UHD (UHD) TVs, 4K Blu-ray players,
and 4K streaming services take video realism to new levels,
delivering 4x the resolution of Full HD 1080p TVs and
traditional Blu-ray players.
4K UHD Blu-ray Discs, select 4K streaming services,
and select 4K TVs produce not just more pixels but better
pixels to deliver a wider range of colors (color gamut) with
high dynamic range (HDR).
HDR video sources and TVs deliver deeper blacks, more
intense whites and more detail in the darkest and brightest
portions of a scene.
Immersive Dolby Atmos and DTS: X soundtracks produce
sounds above you, not just around you, to heighten the
sense of being in the action.
Soundbars once again represented the fastest growing
segment in the home audio industry in 2016, rising an
estimated 20 percent to surpass the $1 billion mark in
factory-level sales, CTA statistics show.
Unit sales of home audio receivers, most of which
decode surround sound, rose an estimated six percent in
2016 to $452 million, CTA statistics show.
Home Theaters Delivering Cinema-Like
Experiences
The performance of today’s sophisticated home theater
systems rival that of state-of-the-art digital movie
theaters.
68 Digital America 2017
4K Ultra HD:
15.6 millon units (+51%)
$14.6 billion in renenue (+38%)
Total Digital Displays:
40 million units (-2%) $19 billion (0%)
Source: CTA Market Research
Consumer Technology Association
The latest TVs and sound systems reproduce bigger,
more realistic images and more life-like surround sound
than ever, immersing movie and TV fans with stunning
wide-screen images and surround effects that can be
placed anywhere in a room, even above viewers’ heads.
New 4K UHD TVs with at least eight million pixels
quadruple the resolution of Full HD 1080p HDTVs.
And when used with 4K UHD Blu-ray players and 4K
streaming services, the latest 4K UHD TVs display
a wide color gamut, reproducing more of the color
spectrum than the human eye can perceive. On top of
that, 4K TVs and content with high dynamic range
(HDR) step up the realism of moving images, widening
the range between the brightest highlights and the
deepest blacks in a scene. HDR technology reproduces
details previously unseen in the darkest and brightest
parts of a scene. And new flat-panel displays measuring
from 75- to 120-inches diagonally immerse you in a
scene as much as new surround technologies immerse
you in sound.
In 2015, select over-the-top (OTT) video streaming
services began offering 4K content with HDR and wide
color gamut to set-top streaming media players and
direct to network-connected smart TVs.
UHD 4K content took another leap forward in 2016
with the launch of the first 4K UHD Blu-ray Discs
and players. They deliver wide color gamut and HDR
at performance levels exceeding that of 4K streaming
services. The reason is that OTT services deliver their
content via a home’s broadband modem to a home’s
Wi-Fi network, whose bandwidth, by many estimates,
averages only 12-15Mbps. UHD discs and players, on
the other hand, support 100Mbps peak bit rates to
deliver the highest levels of video performance.
The new video sources and displays deliver images
that are more true-to-life than ever, and surround sound
has evolved to keep up.
Objects of aural desire: In 2014, “object-based” surround
sound turned up for the first time in consumer audio gear
and on a handful of Full-HD 1080p Blu-ray Discs. The
technology places individual sounds inside a room in more
places than traditional “channel-based” surround sound
formats achieve. Sounds not only move from left to right in
front of you and from front to back but also up and down,
adding realism when helicopters lift off or rain pounds
down from above.
The new technologies use “object-based” sound mixing
to treat individual sounds as objects. Instead of assigning a
particular sound, like the swoosh of a helicopter’s blades,
to a particular channel or channels, studio mixers assign
specific X, Y and Z coordinates to every millisecond of
a specific sound to describe that sound’s location in a
360-degree space around the listener at any given time.
Because sound studios can precisely place and move
multiple individual sounds, each sound is reproduced
clearly and distinctly. Studios place sounds where they
would occur naturally in a scene, moving in three
dimensions in sync with the on-screen action. Sounds zip
around and above listeners with startling realism. Sound
can also pan more smoothly and precisely around the
room. If a bee buzzes around you, you can hear it up and
down, alternately getting closer and farther away before it
flies off into the distance. And the surround experience is
improved no matter where you sit.
Object-based surround frees movie studios from
the limitations imposed by mixing independent sounds
together into one or more channels, with each channel
delivered to a particular speaker at home or in the theater.
In 2015, object-based surround came to video streaming
for the first time through Vudu, and more services are
expected. Object-based surround also appears on many
Blu-ray and 4K Blu-ray Discs.
Outperforming the box office: The growing
performance and shrinking cost of home theater
technology, combined with the convenience of on-
demand video, is enticing consumers to spend record
amounts of money to buy, rent and stream surround-
encoded movies and TV shows.
In 2016, consumers spent $18.3 billion to buy and
rent prerecorded DVDs and Blu-ray Discs, stream and
download movies and TV episodes via the internet, and
access video-on-demand (VOD) services offered by cable
TV, satellite TV and local phone companies (telcos).
That’s up 1.4 percent from 2015, according to statistics

2016 U.S. Consumer Video Rental and Sell-Through Spending

(in millions of dollars)*
2011 2015 2016 Percent
Change
Sell-through
Packaged goods (discs) $8,951.80 $6,070.17 $5,490.57 -9.55%
Packaged goods plus electronic sell-through 9,554.65 7,967.80 7,500.53 -5.97
(EST)**
Rental
Physical rentals via brick-and-mortar stores  1,599.21 616.27 489.56 -20.56
Physical subscriptions 1,741.22 658.87 547.57 -16.89
Through kiosks 1,676.46 1,732.24 1,434.98 -17.16
Total rental excluding video-on-demand (VOD)*** 5,016.88 3,007.39 2,472.11 -17.80
Total rental including video-on-demand (VOD)***  6,801.31 4,975.86 4,548.89 -8.58
Digital
Electronic sell-through (EST) 602.85 1,906.62 2,009.97 5.42
Video-on-demand (VOD) 1,784.43 1,968.47 2,076.77 5.50
Subscription streaming+ 1,603.14 5,081.88 6,230.13 22.60
Total digital 3,990.42 8,956.97 10,316.87 15.18
Total U.S. Video Spending $17, 959.10 $18,034.53 $18,279.55 1.36%

*2016 data preliminary

**Electronic sellthrough (EST) consists of purchases of authorized video downloads that users own permanently.
***Video-on-demand (VOD) consists of video streams via cable, satellite TV, or the internet.
+Paid subscribers only, excluding subscription VOD bundled with other services.

Source: DEG, The Digital Entertainment Group, degonline.org

Digital America 2017 69

 HOME THEATER
from the Digital Entertainment Group (DEG). The
group’s members include video hardware and software
suppliers.
U.S. movie theaters, in contrast, generated only $11.3
billion in movie ticket revenue in 2016, down 0.5 percent
from 2015, said research company Nash Information
Services. The number of tickets sold fell to 1.33 billion
from 1.34 billion.
Not for the one percenters: To enjoy an immersive audio
and video experience at home, you don’t need a 120-
inch 4K UHD TV or laser-TV projector with a $10,000+
component-based audio system driving seven or more
floor standing speakers, multiple in-ceiling speakers and
multiple bass-producing subwoofers. Home theater is for
everyone, every home and almost every room.
In early 2017, bare-bones entry-level systems
meeting CTA’s definition of home theater started at
about $250. Such systems could consist of a 40-inch
flat-panel 720p HDTV and an inexpensive home
theater-in-a-box (HTiB) system, which packages all
of the audio electronics and speakers needed to enjoy
surround sound along with an integrated DVD or Blu-
ray player. You won’t enjoy the stunning visuals of a
4K HDR picture or hear object-based sounds hovering
over your head, but you’ll get a big picture with big
sound far exceeding the performance of systems from
10 years ago.
New options: The home theater equation, however,
is simpler if you opt for some of the newer audio
options. Instead of an HTiB or separate components,
for example, you could opt for a soundbar that
includes surround decoders and surround-virtualization
technologies. Soundbars incorporate multiple speakers
in one slim horizontal chassis to complement the
cosmetics of thin flat-panel TVs. Soundbars can be
placed on a shelf above or below a TV or wall-mounted
along with the TV. Many use digital signal processing
(DSP) or psychoacoustic techniques rather than
separate surround speakers to deliver surround channel
effects to the sides of listeners and behind them.
To keep it simple, pair a soundbar with a smart TV,
dispensing with disc players, pay TV set-top boxes and
streaming media adapters. Just use the smart TV’s video
streaming apps to stream surround encoded movies,
and use the TV’s over-the-air broadcast tuner to receive
local digital TV stations, which also broadcast surround
signals. This “cord-cutting” option is easy to set up and
inexpensive, starting at around $450.
As of January 2017, most households — 52 percent
— owned a smart TV or at least half of a home theater
system. Just add the soundbar with virtual surround to
complete it.
70 Digital America 2017
Also to simplify home theater, about a dozen suppliers
now offer or plan to offer soundbars that can be used with
wireless surround speakers, which produce fully discrete
surround effects to take surround realism up another
notch. A handful of companies also offer solutions that
deliver surround sound through five wireless speakers,
reducing cable clutter and eliminating the need to run
speaker cables to surround speakers in back of a room.
How surround works: Most home theater systems deliver
5.1 channels of surround sound through five separate
speakers and a subwoofer (the 0.1 in 5.1). In a basic 5.1
system, one speaker is placed on each side of a TV. A
center-channel speaker goes above or below the TV screen
to ensure that dialog emanates from the on-screen actors.
Two surround speakers, one on each side of your main
Home Theater
Building Blocks
At a minimum, here’s what you need to build a
home theater system to meet CTA’s definition:
•  high-definition TV set or video projector with a
A
minimum 40-inch diagonal screen size.
• A video source that supports a minimum of 5.1
channels of surround sound. The sources are
wide-ranging. They could include a DVD player,
high-definition Blu-ray Disc player, 4K UHD
Blu-ray player or game console with Blu-ray
player or streaming services. They could include
an OTT streaming media adapter that streams
movies from the Cloud or just a simple network
connected smart TV, which accesses cloud-
based OTT video services from embedded apps.
• A home audio system that reproduces a
minimum of 5.1-channel audio signals.
• Compliant systems include HTiB systems and
component-based audio systems, the latter
typically consisting of an AV receiver, five or more
separately sold speakers and a separately sold
subwoofer.
seating location, and a subwoofer complete the speaker
complement. Subwoofers reproduce only the lowest bass
sounds, reducing audio system distortion and boosting
total bass output to make the room rumble.
In a traditional 7.1-channel system, two optional back-
surround speakers integrate with the two side-surround
speakers, front speakers, and subwoofer to create a more
realistic 360-degree soundfield.
Some of the most sophisticated systems use post-
processing techniques to derive 9.1 or 11.1 channels of
sound from 5.1-channel and 7.1-channel soundtracks.
One type of 9.1-channel system adds a pair of optional
front on-wall height speakers to a traditional 7.1 system
to elevate ambient sounds, such as helicopters lifting
off. One type of 11.1 system adds a pair of front-height
speakers and a pair of front-wide speakers to a traditional
7.1-speaker set-up.
Next-gen object-based surround: New object-based
surround technologies – Dolby Atmos and DTS:X –
don’t artificially derive extra height or front channels
from 5.1 and 7.1 soundtracks. Instead, they reproduce
height channels mastered in the original studio mixes to
preserve the artist’s intent and deliver a more realistic and
compelling experience.
With an object-based surround system, you could add
two to four in-ceiling speakers to a traditional 5.1 speaker
set-up to deliver height effects and achieve compelling
3D audio results. Such systems are called 5.1.2 and 5.1.4
systems (where 1 represents a subwoofer and 2 and 4 refer
to the number of height speakers.) In lieu of in-ceiling
speakers, you could place two to four so-called “elevation
speakers” on top of your existing floor standing or
bookshelf speakers. Elevation speakers fire up at an angle
to bounce sound off ceilings. Some floor standing speakers,
however, feature an integrated height speaker to deliver the
main left or right front channel as well as a height channel.
In 2015, Atmos and DTS:X appeared for the first time
in a single soundbar.
Surround sources: As surround sound technology evolved,
surround sound sources proliferated. Once limited to VHS
videotapes and DVDs, surround sound migrated to Blu-ray
Discs, over-the-air digital TV broadcasts, traditional pay
TV providers such as digital cable operators and streaming-
video services.
By the end of 2016, 95.9 million households subscribed
to pay TV services from cable operators, satellite TV
services and telcos, up from 2014’s 94.8 million and 2008’s
75.1 million, reports SNL Kagan, the market research
company.
On top of that, SNL Kagan estimates 65 million
households subscribed to an OTT video streaming service
in 2016, up from 2015’s 58 million.
Blu-ray Discs also provide a wealth of surround sound
material. TiVO Corp., formerly Rovi Data Solutions, put
the 2016 selection of non-adult Blu-ray titles in the U.S. at
25,235, including Blu-ray/DVD combo packs. That’s up
from 19,966 in 2015 and only 1,240 in 2008.
And let’s not forget DVD-based surround sound. More
than 248,098 non-adult DVD titles were available in 2016,
up from 237,308 in 2015 and 2012’s 185,878.
On top of that, more than 110 4K UHD Blu-ray Disc
titles were available in early 2017 and are forecast to grow
to 250 by year’s end, DEG said.
Surround goes OTT: Surround sound is also available
through OTT video streaming services, which deliver
movies and TV episodes from the cloud to PCs, tablets,
smartphones, smart TVs, streaming media adapters, game
consoles, smart Blu-ray players and select Blu-ray-equipped
HTiBs. Select titles encoded with Dolby Digital Plus
surround are available through smart TV apps and media
streamers from Vudu, HBO GO, Direct TV, Encore Play,
Starz, Fandango Now (previously MGO), Time Warner
Cable, Comcast, iTunes, Google Play, Netflix and Amazon
Instant Video. Streaming titles with DTS-HD surround are
available through streaming services like FandangoNow,
Xfinity UHD, StarzPlay, EncorePlay and CinemaNow.
Object-based surround has also gone OTT with more
than 25 movie titles now available with Dolby Atmos
through Vudu.
Video Realism Advances with 4K, HDR
Like surround sound, TVs and video sources continue
to advance the state-of-the-art to deliver greater realism
and impact in home theaters. And the trend continues
with the launch of new 4K UHD TVs that can produce a
wider range (gamut) of colors to more closely duplicate
what the eye sees in the real world. New TVs also deliver
greater dynamic range than before, producing deeper
blacks and intense whites without sacrificing detail in the
dark and bright portions of a scene.
For viewing on these TVs, studios are delivering 4K
content with wide color gamut and high dynamic range
(HDR) through select streaming services and a growing
number of 4K UHD Blu-ray Discs.
Today, home theater systems feature a digital TV
(DTV) that is either a flat-panel display or a front
projector to bring the big-screen excitement of the movie
theater to the living room, family room or “man cave.”
Flat-panel TVs are available as LED-edge or backlit
LCD TVs or as Organic Light Emitting Diode (OLED)
displays. Both technologies offer thinner form factors,
more natural colors and brighter images than ever
before, and can be found with curved screens to help
bring the wrap-around immersive effect of an IMAX
screen into the home.
Digital America 2017 71
 HOME THEATER
For those who really want to bring the theater
experience home, a video projector enables a truly huge
screen size and an image presented with some of the same
technology as the professional cinema.
That’s big screen entertainment: The advent of 4K
UHD resolution to the home TV screen enabled large
screen pictures with levels of clarity and color that was
never possible before. Flat-panel technologies also enable
making screen sizes much larger without dominating
a room. For example, LCD TVs measuring 65- to
120-inches are now common at reasonable prices. As
prices come down and picture quality goes up for big-
screen displays, consumers often gravitate to the biggest
size they can afford. One of the most popular screen sizes
for a 4K UHD TV set is 55-inches, with 65-inch and
larger models also popular.
Big screens make good 4K sense: New 4K UHD
TVs bring more resolution, but in many flat-panel TV
screen sizes the added resolution is difficult to see from
traditional viewing distances. This means that the larger
the screen the better the value from improved image
quality. Most AV specialists agree that the optimal
viewing distance of a 4K resolution display is 1.5x
the screen height. That is where you can really see a
difference in resolution between a 4K and 1080p display.
Most residential viewing spaces are set up for a more
comfortable distance at 3x the screen height. Experts
agree that resolution is simply a bullet point among
many in producing a beautiful image, and qualities like
wide accurate colors, brighter images and wide contrast
ratios, like those produced with images captured in high
dynamic range (HDR), stand out far more noticeably
than resolution alone.
4K UHD delivers film-like resolution: At their best,
television products on the market today offer 4K UHD
resolution (4Kx2K) that accepts a 720p or 1080i
HD broadcast picture, and upconverts to fit the 2K
(3048×2160 pixels) or 4K (4096×2160 pixels) on the
screen. However, the largest portion of HDTVs sold still
have Full HD 1080p or HD 720p resolution, meaning
digital broadcast signals are upconverted with line
doubling and other techniques and displayed on the
additional pixels of 4K UHD screens. In all forms, 4K
UHD and even HDTV presents an image that is so sharp
and colorful that it appears virtually identical to the
quality of the original film on which the image was shot.
Today, the lion’s share of large-screen TVs have LCD
screens, measuring from 55- to 120-inches. (See video
section). But for true cinema-like screen sizes, nothing
can beat a front projector, which can cast a variable
screen size ranging up to 200-inches or larger, depending
72 Digital America 2017
on the unit. Big-screen movie buffs will find a wider
selection of projectors that can display a 4K UHD image
of 100-inches and larger, while ultra-short throw versions
don’t require an overly large space to it. An ultra-short-
throw model will cast an image larger than 80-inches
positioned a few inches from the wall or screen surface.
Next generation display technologies arrive: Two
manufacturers are lining up Active Matrix Organic
Light-Emitting Diode (AMOLED or OLED) flat-panel
displays for the U.S. consumer market, including LG
Electronics and Sony. The first large-screen OLED TVs
had screen sizes of 55-inches and delivered Full HD
1080p resolution. Second generation OLED sets released
in 2014 offered screen sizes up to 77-inches, with some
models being the first to introduce 4K UHD resolution
to the technology. LG is offering a large assortment of
OLED TVs measuring up to 77-inches. These displays,
which use elements including carbon are highly efficient,
enable ultra-thin designs, produce superior levels of color
saturation and contrast to either LCDs and may one-day
yield flexible film form factors. In fact, LG introduced
a “picture-on-wall” OLED screen design that enables
sticking a very thin panel to a wall using magnets. In
addition to enabling thin panel depths and light weight,
OLED technology uses a bright self-illuminating screen
that does not require backlighting, requiring less power
to operate than traditional LCDs that are back light
dependent. The technology uses electroluminescent
organic materials sandwiched between two glass
substrates.
An OLED panel’s emissive electroluminescent layer is
composed of a film of organic compounds, and a polymer
substance. The organic compounds are deposited in rows
and columns onto a flat carrier using a printing process.
(See Video Section.)
The first 55-inch OLED Full HD TV was introduced
by LG carrying a $14,999 suggested retail price. The
price for LG’s 4K UHD equivalent model dropped
below $2,000 in 2017. For its first large-screen OLED
contribution, Sony is introducing models with screens so
thin they are designed to vibrate to produce stereo sound
that seems to follow objects around on the screen.
LCD pitch a curve: For those who want a truly different
television that presents a wrap-around effect when seated
up close, some 4K UHD LCD TV models are available
with a concave bow or curve. The design offers a
distinctive look and design element to a room. But it can
be an acquired taste and in 2017, manufacturers started
scaling back the number of models that were curved to
support customers looking for flat screens that are easier
to mount on a wall, and reduce the glare from reflections
of objects in the room.

Ultra High-Definition TV makes advances: Not since
HDTV has a new enhanced video format captured the
interest of consumers like 4K UHD TV. The technology
boosts the resolution of HDTV screens to make
pictures look more dynamic and realistic on today’s
new large screen TVs. In 2016, the sales performance
of 4K UHD TV proved to follow predictions that the
year would mark the breakthrough for the UHD TV
market. Research from DEG indicated 1.4 million UHD
TV sets were sold in the U.S. with HDTV penetration
approaching 95 percent or 104.1 million of households.
In 2014, CTA developed a set of voluntary
nomenclature for UHD TVs, reflecting the expanding
capabilities of the new sets and providing more flexibility
for term usage. Under the new characteristics, a TV,
monitor or projector may be referred to as ultra high-
definition if it has at least eight million active pixels, with
at least 3840 horizontally and at least 2160 vertically;
a 16:9 aspect ratio or wider; can upscale HD video and
display it at ultra high-definition resolution; has one or
more HDMI inputs supporting at least 3840x2160 native
content resolution at 24p, 30p and 60p frames per second
and more. (See the video section.)
The new guidelines also provide characteristics for
“Connected ultra high-definition” displays that decode
IP-delivered video of 3840x2160 resolution that has been
compressed using HEVC and may decode video from other
standard encoders; receives and reproduces, and/or outputs
multi-channel audio; receives IP-delivered UHD video
through a Wi-Fi, Ethernet or other connection and supports
IP-delivered UHD video through services or applications on
the platform of the manufacturer’s choosing.
In 2016, a multi-industry coalition of content and
hardware companies called the UHD Alliance developed
standards and logos for a new class of “premium”
UHD TVs that can display not only 3840x2160 pixel
resolution, but images with a wider range of contrast
leading up to HDR and a wide color gamut supporting
content encoded for the widest swath of colors yet seen
in a consumer display – the Society of Motion Picture
and Television Engineers (SMPTE) Rec.-2020. These
new high-performance
displays are not required
to display the full Rec.-
2020 color gamut, but
must be able to accept the
information and present
it to the best capabilities
of the TVs. For HDR, the
sets must perform up to
one of two performance
levels, depending if the
TV is an LED LCD TV or
and OLED TV. Television
qualifying for these sets of performance criteria can
be licensed to carry the UHD Alliance’s “ULTRA HD
PREMIUMTM” logo, certifying that it meets the group’s
high performance levels. (See the video section.)
The first large-screen flat-panel UHD TVs hit the
market in 2012 with 84-inch LED edge-lit LCD TV
models. Today’s largest flat-panel screen size for the
consumer market is 120-inches, and is based on LED-
backlit LCD TV technology. For even larger screens,
manufacturers offer video projectors with up to 4K UHD
resolution from several manufacturers, and up-scaled 4K
UHD from others.
According to CTA forecasts, UHD TV U.S. unit
shipments rose 41 percent to 10.3 million on $10.6
billion in factory revenue for 2016, while the association
forecasts unit shipments reaching 15.6 million, up 51
percent, on $14.6 billion in revenue in 2017.
Market research firm IHS estimated that televisions
supporting true HDR (any set capable of 500 nits of
brightness and higher) represented 15 percent or 4K UHD
TV unit shipments to North America in 2015. That is
forecasted to rise to 21 percent in 2017.
UHD TV makers expand the rainbow: Leading
manufacturers of 4K UHD TVs have started to expand
upon the benefits of high-resolution, adding both a wider
range of contrast from near absolute black to bright white,
while retaining details normally washed out or covered up.
They have also sought to expand the palette of colors these
displays can reproduce, giving viewers a more realistic
and natural-looking image compared to what has been
available in HDTVs. (See the Video Section.)
To achieve this, some LED LCD TV manufacturers
have turned to phosphor-coast LEDs and quantum dot
technology that uses a film of tiny light-emitting crystals
sandwiched between the liquid crystal screen and the
LED backlighting source. These quantum dots boost
brightness and color range available in LCDs alone. The
manufacturing process offers improved picture quality
at a cheaper cost than OLED. Of course, OLED displays
also achieve some of these benefits without the need for
Digital America 2017 73
 HOME THEATER

a backlight source, and start at much lower levels of black to have supporters, particularly among very high-end
than LCDs. The tradeoff is that this technology usually home theater enthusiasts who invest in 3D-capable front
outputs lower brightness compared to advanced quantum projectors to bring the 3D cinema experience home.
dot-enhanced models. (See the video section) These 3D projectors conform to a 3D signal and interface
standard used in Blu-ray 3D players, enabling Full HD
Projectors primed for resolution revolution: Home 1080p 3D images to be streamed from the player to the
theaters with 4K resolution were rare a few years ago, but display in full resolution and surround sound.
advances in home cinema technology are now delivering a
cross section of projectors with the ability to show 4K or Virtual Reality adds new 3D dimension: 3D in a new
simulated 4K in new ways. This means the industry will form has begun to emerge through new 360-degree
soon witness a remarkable range of price, performance virtual reality (VR) headgear systems that let viewers
and capabilities from which enthusiasts can choose. experience video content all around them, as if they
According to market research firm PMA, there are were in the center of the action. These new VR systems,
three distinct classes of 4K projectors: 1) those that from companies including Oculus Rift, Samsung, Epson,
support 4K with four million pixels on screen that use Microsoft’s HoloLens and Google, require little more
than a smartphone and a piece of cardboard in some
Share of 4K TV Shipments by Display Type applications to generate the experience. At CES 2017
(millions of units) content producers continued to evolve the concept of
creating feature-length productions and video games
2014 2015 2016 2017 with 360-degree perspectives for VR audiences, once
North America 1.5 6.3 11.9 16.9 the viewing apparatus reaches a critical mass of owners.
Whether VR demand achieves enough volume to interest
LCD 4K 100.0% 99.4% 98.6% 98.4%
manufacturers in developing home theater systems and
OLED 4K 0.0 0.6 1.4 1.6 applications remain to be seen, VR outside of headsets
Worldwide  11.7 31.9 55.7 76.8 or smartphone screens is not likely to emerge for a while.
Still the technologies hint that for some people 3D video
LCD 4K 100.0%  100.0% 99.7% 99.1%
is still an intriguing form of entertainment.
OLED 4K   0.0 0.0 0.3 0.9
The internet comes to the home theater: Television
True HDR percentage of 4K shipments sets and set-top internet media adapters have entered
2015 2016 2017 the home theater space bringing new content options
and access not imaged in the past. Wi-Fi or wired
North America 2% 15% 21%
Ethernet connectivity lets consumers access over the
internet literally thousands of streaming movies,
Source: IHS Markit 2016
television programs, home videos, music and photos.
These smart TVs have enabled the trend of TV multi-
pixel shifting technologies that make the eye and the tasking, where TV viewers are simultaneously using their
brain perceive a full 4K picture; 2) 4K UHD models with smartphones and tablets as second screens in the home
a native resolution of eight million or more pixels on theater experience to engage in new activities related to
screen (3840x2160) and 3) 4K native models with eight a program being viewed. These experiences can include
million or more pixels on screen and the ability to show everything from looking up information on actors and
4096x2160 and 4096x2400 pixel resolution. directors, to engaging in program-related discussions on
social networking services like Facebook and Twitter. (See
Projectors are the last bastion of 3DTV support: the video section.)
Spurred on by the development of 3D feature films
for professional movie theaters, stereoscopic 3DTV Front projectors bring the theater home: For a truly
arrived several years ago as a true big-screen TV feature. theater-like experience, a front projector paired with a
Although theatrical 3D presentations continue, the reflective screen can present a home theater with an image
acceptance as a home theater experience never reached stretching 200-inches or more diagonally. Many of these
the levels manufacturers and content producers had units provide some of the most dynamic high-definition,
hoped for. In 2017, 3D has virtually disappeared as a 4K UHD and 3D pictures available in a range of prices.
feature in flat-panel televisions from major TV brands, CTA estimated factory unit shipments of home-based
however, it remains in most projectors offered for the front projectors of about 680,000 in 2016, with unit
consumer home theater market. The technology continues ships on a declining trajectory for 2017.

74 Digital America 2017

 +79%
Front projector options: Most new projectors are
compact units using LCD, DLP, or LCoS (aka SXRD
and D-ILA) based micro-display light engines. Each of
these approaches deliver exceptional color, brightness
and resolution levels but each has its limitations as well.
DLP is used in higher-end home theater systems. Single
chip designs offer strong value but can produce a rainbow
pattern visible to some people because it uses a color
wheel to combine red, green and blue color segments into
a full color picture. High-end models offer three separate
DLP chips, one for each primary color, avoiding the color
wheel and the rainbow effect, while delivering exceptional
resolution and clarity. LCD and LCoS systems all use
three-chip designs but have wide ranging performance
levels and price points.
LED lighting powers new projectors: A growing trend
in front-projection systems is to replace traditional UHP
bulbs with new LED lighting arrays that use less power,
give off less heat and produce richer colors. Due to extra
cost and lower light output compared to bulb-based
systems, new LED projectors are not a huge market
factor yet, but sales are on the rise. LED is popular
because consumers dislike the expense and hassle of
having to replace bulbs on a semi-regular basis. Dealers
and installers also like the color performance, instant-on
capability and the energy efficiency.
Laser lighting gains traction: Like LED for color
intensity accuracy, but with brighter image potential, are
laser lighting systems that were developed for commercial
applications but have become prevalent in home theater
VIRTUAL
REALITY
4K Ultra HD:
2.5 millon units (+79%)
$600 million in renenue (+43%)
Source: CTA Market Research
Consumer Technology Association
projectors. Many projector manufacturers now have a
few laser-based models in their higher-end lineups, which
support 4K resolution. A handful of laser-based projectors
were introduced in the custom home projector market in
2015 that offer richer and wider color gamut and longer-
lasting light sources than lamp-based systems. Some
believe laser-based systems will ultimately be the best
means for achieving display of the full SMPTE Rec.2020
color gamut, which flat-panel sets and projectors cannot
achieve today.
4K projectors make big pictures clear and colorful:
For those who feel that Full HD 1080p resolution
just isn’t enough, several manufacturers now market
consumer-class ultra high-definition projectors. The
technology has been available in commercial theaters
for several years, enabling the highest quality pictures
on enormous screen sizes exceeding 200-inches. The
first consumer 4K models were based on Liquid Crystal
on Silicon (LCoS) technology. Sony introduced the
first commercial 4K home theater front projector in
2011, priced at $25,000, and offered native resolution
of 4,096x2,160 pixels, far surpassing the resolution
of HDTV. In 2016, Sony’s status as the exclusive
manufacturer of home-based native 4K UHD projectors
was challenged as JVC introduced a native 4K D-ILA
microdisplay to power a new class of models, rivaling
Sony’s SXRD microdisplay technology. Prior, JVC and
Epson had challenged Sony’s projectors with 3-Chip
LCoS technologies with native four million pixels that
are rapidly shifted to double the resolution perceived by
the brain.
Digital America 2017 75
 HOME THEATER
Texas Instruments also developed pixel-shifting
technology for a new class of Digital Micromirror
Device (DMD) microdisplays to deliver an affordable
simulated 4K solution for manufacturers of Digital Light
Projection (DLP) projectors. Texas Instruments had a
native 4K 3-chip DLP microdisplay chip for some time,
a 1.4-inch device that allows highly bright 4K images at
steep prices. Primary customers were professional theaters.
A new simulated-4K DLP device measures just 0.7-inches
diagonally and carries four million mirrors fabricated using
the TRP (Tip & Roll Pixel) design used in the company’s
mini pico-projector chip sets. The new chip is aimed at
mainstream home cinema and commercial single-chip DLP
applications requiring about 5,000 lumens of brightness.
The new 4K chip set arrived in 2016 and was used in
models from a handful of TI-supporting projector brands
at price points that were competitive with higher quality
Full HD DLP models.
Because the new chip has four million micromirrors,
where 4K UHD images have eight million pixels, TI uses
an image shifting technology like that used by JVC and
Epson pixel-shifting 4K projectors, but yielding superior
performance, TI claims. The technology inserts a small
glass element between the prism and projection lens and
drives this with a voice coil for slow frequency modulation.
The voice coil moves the glass sufficiently enough to shift
the projected image rapidly back and forth by a half pixel
up and a half pixel to the right.
Blu-ray Disc players remain popular: Sales have slowed
down in the wake of popular video streaming services
and is hitting a high saturation rate. Blu-ray Disc players
remain a popular tool for watching up to Full HD 1080p
video content. According to CTA, unit shipments of Blu-
ray Disc players are expected to decline 15 percent in 2017
to 5.8 million, from 6.8 million last year, while sales of
component DVD players/recorders drop 12 percent to 5.6
million, as a lower player average unit price ($35 in 2017)
and cheaper discs continue to give the DVD staying power.
The average factory selling price for a Blu-ray player is
forecasted to drop to $83 in 2017.
UHD Blu-ray players deliver full 4K promise: In 2016,
the first UHD Blu-ray players hit the U.S. market bringing
movies and documentaries with full 3840x2160 resolution
splendor plus the highly noticeable benefits of high
dynamic range (HDR), a wide color gamut and up to
60 fps frame rates. What’s more, because the disc-based
format affords a bit rate exceeding 100 Mbps, images are
even sharper, clearer and more colorful than streamed
video constrained by limited bandwidth.
According to the Blu-ray Disc Association (BDA), 2016
ended with 110 titles and nearly 20 million software units
sold in the U.S. An additional 250 UHD Blu-ray titles are
76 Digital America 2017
set to be released in 2017 from studios including Sony,
Warner, Fox, Lionsgate and Universal. About 8.4 million
4K UHD Blu-ray Discs will be sold globally in 2017,
according to forecasts from U.K.-based market research
firm Futuresource Consulting. That 4K tally would place
UHD sales at about four percent of global Blu-ray Disc
volume.
On the hardware front, Sony, LG and Oppo have joined
Samsung, Philips, Panasonic and Microsoft with devices
that play physical UHD discs. All brands have new models
launching this year, with many including the promise of
Dolby Vision HDR-compatibility added on via software
updates. U.S. player unit sales in 2016 topped 300,000, the
BDA said, placing the new format at about three times the
sales penetration of Blu-ray players at an equivalent time in
the original launch of the format. BDA plans an extensive
consumer and dealer outreach program in 2017 to keep the
UHD Blu-ray momentum going.
Per CTA forecasts, the industry will ship up to 700,000
UHD Blu-ray players units in 2017 bringing $63 million
in factory dollar revenue. The association said the format
could see U.S. player shipments reach up to 1.5 million
units annually by 2019.
UHD Blu-ray Discs bring 4K home: Physical media
allows enthusiasts to assemble large collections of titles
they can collect, re-sell or trade. But some UHD Blu-ray
Disc titles also support digital copies so that purchasers
can take content with them on mobile devices. The UHD
Blu-ray specifications over player manufacturers and
studios the voluntary flexibility of using digital bridge
features, to copy and export titles to play on other devices
and systems and lend to friends and family for limited
periods. Although none of the players have included this
option, future products could permit bit for bit copies of
a movie and television program from the disc to be stored
on an authorized attached media drive or mobile device.
UHD Blu-ray Discs have dual layers with a capacity
of 66 GB (though 100GB triple-layer discs are also
possible) and can deliver up to 108Mbps of data. UHD
Blu-ray Discs are encoded using the HEVC (also known
as H.265) codec. UHD Blu-ray supports several different
types of HDR metadata, including Dolby Vision and
HDR10. The latter is specified as mandatory on discs
carrying HDR, and is an open standard supported
by the Society of Motion Picture Engineers (SMPTE).
Use of Dolby Vision on a disc would accompany an
HDR10 version and is at the discretion of individual
content creators.
For audio, UHD Blu-ray players, like Full HD
1080 Blu-ray Disc players, support new object-based
surround formats like Dolby Atmos and DTS:X which
can be decoded by any external device like a supporting
soundbar or AV receiver.
UHD content options build: When the first UHD TV
projectors and TVs launched, few options existed for
watching programming in native 4K resolution. In the last
two years, a number of 4K movie download and streaming
services have emerged. Streaming movie service providers
including Netflix, Amazon, Fandango Now, YouTube,
Ultraflix and others have added 4K UHD capability. A few
have also started to offer 4K UHD movies encoded with
metadata to present HDR for better-featured 4K UHD
displays.
Among the more popular 4K UHD streaming and
download sites are the following:
• Netflix: The service has 4K UHD streaming with a
smattering of titles carrying HDR10 and Dolby Vision
HDR. Content is ramping up this year, as all the service’s
original series are now shot in 4K, and many now add
HDR 10 and Dolby Vision metadata.
• Amazon: Through its Amazon Instant Video service,
subscribers with Amazon “Prime” annual memberships
get access to a range of 4K UHD movies and original
programs, including many with HDR10 support. In
addition to free titles available through Prime, select
4K/HDR titles are available for rental or to purchase at
prices around $20 to $30.
• Vudu: Walmart’s on-demand service streaming standard
and high-def (called HDX) movies and television
programs. The service was the first to offer 4K UHD
content with Dolby Vision HDR support. It will be
adding HDR 10 support. 4K UHD movies are available
to rent at about $10 and can be purchased at $25-$30.
Vudu is part of the UltraViolet program, which offers
free digital copies of movies for the purchase of select 4K
UHD Blu-ray Discs.
• YouTube: Provides free 4K UHD streaming content over
broadband connections. Most major TV brands and
4K media adapters support the app for 4K. YouTube
uses Google’s VP9 compression codec instead of HEVC
to stream 4K video. TVs or adapters must support the
codec for 4K use. 4K programming includes mostly
documentaries, and high quality science and nature
imagery.
• UltraFlix: Includes a library of 4K UHD streaming
content comprised of 4K nature documentaries, concert
videos and movies available to watch for free, purchase
or in 48-hour rental windows running about $10. The
service is available on many leading 4K TV brands and
UHD-ready media adapters.
 mono surround channel was delivered to two surround
• Hulu: Offers a selection of titles in 4K UHD, including
original TV shows like The Path, Stephen King’s Sci-Fi
thriller 11.22.63 and the bulk of the James Bond movie
catalog. The 4K titles were initially available to Hulu
subscribers who have Microsoft’s Xbox One or Sony
PlayStation 4 Pro consoles. Hulu requires a minimum
internet connection of 13 megabits per second to stream
4K content to a display that can support 3840x2160
resolution.
• Sony: Offers 4K UHD movies and video with its newer
4K UHD streaming service, offers movies for purchase
only, for around $30. The service is available on Sony
4K UHD TVs running the Android TV system and on
the PlayStation 4 Pro console. Many titles are available
through Ultra support HDR. The service is part of the
UltraViolet program offering streaming versions of UHD
Blu-rays on the service.
• Fandango Now: The new name is the new name for
the M-Go VOD service, which launched a 4K app and
library exclusively on select Samsung UHD TVs in 2014.
The streaming service is available on multiple smart
TV brands or via downloads to Vidity-enabled storage
devices. 4K rental prices start at $7, or can be purchased
for around $20-$25. UltraViolet libraries are supported.
• Google Play: Offers 4K and HDR movies through the
Google Play Store, which can be accessed by the new
Chromecast Ultra adapter and certain Android TVs.
Vidity offers video downloading option: In 2015, a group of
hardware and software companies called the Secure Content
Storage Association (SCSA) unveiled a new system for
downloading both 4K UHD and HD content across multiple
brands and models of storage and playback devices.
The technology, called Vidity, enables users to store,
copy, play and share downloaded digital files among
devices like laptops, smartphones and tablets. The image
and sound quality is very close to disc-based media,
like UHD Blu-ray and Blu-ray Discs, but without the
storage hassles of five-inch optical discs. Vidity believes
downloading can be compatible with and complementary
to streaming and 4K UHD Blu-ray.  
The Evolution of Surround Sound
As video performance advances, surround sound
technology is keeping pace so that home theaters deliver
greater realism.
Surround sound has come a long way since its launch
in the 1980s on prerecorded VHS Hi-Fi tapes and vinyl
album-size laserdiscs. The tapes and discs were encoded
with a four-channel matrix-surround technology called
Dolby Surround. Dolby Surround added a front-center
channel and a limited-bandwidth (100kHz-7kHz) mono
surround channel to a normal stereo soundtrack. The
speakers, each delivering the same acoustic information.
The center channel locked dialog to the TV screen.
More and better channels: To enhance realism, two
5.1-channel digital surround formats – Dolby Digital 5.1
and DTS Digital Surround – hit the scene in the 1990s, first
on laserdiscs and then on DVD discs.
Digital America 2017 77
 HOME THEATER

Dolby Digital and DTS deliver five discrete (fully make older home theater systems obsolete. That’s because
independent) channels of full-range (20Hz-20 kHz) audio. the Blu-ray standard mandates that discs carry at least
A separate low-frequency-effects channel (the 0.1 in 5.1) one multichannel soundtrack compatible with surround
delivers the deepest window-rattling bass, usually to a sound decoders in older home theaters.
separate subwoofer.
Discrete 5.1-channel surround sound delivers greater Object-based Surround Hits the Heights
depth and localization of sound by bringing full-range Surround sound advanced again in 2014 with the launch
stereo to the surround speakers. With discrete 5.1 of the first audio/video receivers (AVRs) with object-based
surround, you can track the sound of an insect buzzing by surround decoding. Now the technologies are widespread
your ear as is passes from of the front-left corner of the in AVRs and even appear in select soundbars.
room to the rear-right corner. Greater channel separation With the Dolby Atmos and DTS:X object-based
delivers improved spatial imaging, improved dialog surround formats, individual sounds can be placed
intelligibility, enhanced resolution and greater dynamic anywhere in a three-dimensional space, not just around
range.
With the 2006 launch of the high-
definition Blu-ray Disc, the next era Multichannel Surround Soundtracks
in surround sound began. Blu-ray Available On U.S. Blu-ray Discs
Discs made room for 1080p HD
video and higher resolution, wider 2009 2012 2015 2016
bandwidth surround sound formats. Soundtrack Format Number Number Number Number
Those formats include Dolby Of Titles * Of Titles * Of Titles * Of Titles *
TrueHD, dts-HD Master, and PCM Dolby Atmos 0 0 44 142
(pulse code modulation), all available Uncompressed
in discrete 5.1-, 6.1- and 7.1-channel
PCM 306 343 350 351
variations.
DolbyTrueHD 507 909 1,246 1,343
Blu-ray surround abounds: For DTS HD Master 734 3,312 5,616 6,203
consumers interested in high-
DTS HD High 31 55 63 65
performance surround, thousands of
Resolution
Blu-ray Discs are available with one
or more advanced surround sound Dolby Digital 1,247 475 625 673
formats. At the end of 2016, 8,066 DTS 35 64 78 84
Blu-ray titles with known surround
DTS:X 0 0 2 27
formats were available through
online U.S. retailers (excluding adult
discs), up from 1,860 in 2009, per
Number of Audio Channels
website Blu-raystats.com. Among
the titles whose soundtrack formats Dolby Atmos 0 0 44 142
could be identified, the clear majority DTS:X 0 0 2 27
of the discs’ main soundtracks used
the DTS-HD Master format. Dolby
7.1 134 379 633 704
TrueHD and uncompressed PCM 6.1 34 49 55 58
placed second and third, respectively. 5.1 1,675 4,694 7,154 7,818
About 170 discs featured Dolby
Atmos or DTS:X object-based 3.0-5.0 33 75 134 136
surround, which takes the form of
metadata added to Dolby TrueHD Total Titles 1,860 5,158 8,024 8,066
and dts-HD Master soundtracks. With Known
Most of the titles (7,818) were Multichannel Audio
encoded with 5.1-channel Codecs
soundtracks, but 704 came with
*Out of disc titles with known multichannel-audio codecs.
7.1-channel soundtracks. Only a disc's main soundtrack was counted, not secondary soundtracks used for such things as
Just as important, Blu-ray’s alternate-language soundtracks. Includes 4K UHD Blu-ray Discs
advanced surround formats don’t Source: blu-raystats.com

78 Digital America 2017

listeners but also above them. The technologies also deliver
smoother panning of individual sounds around listeners.
Until the launch of object-based surround, surround
sound was channel-based. Sound-mixing studios assigned
multiple sounds to one or more full-range channels for
playback in movie theaters and home theaters.
Dolby Atmos and DTS:X, however, punch up sonic
realism, placing individual sounds inside a home theater
room in more places than traditional channel-based
surround formats achieve. The magic starts in the mixing
studio, where sound engineers mix soundtracks based
on where a particular sound exists in space, not on the
location of the speaker that will reproduce it. Each sound
is treated as an individual “object” to which the author
attaches specific X, Y, and Z coordinates (metadata).
The metadata describes a sound’s location in 3D space
at a particular time, and the metadata changes every
millisecond to move a sound seamlessly around a room.
To date, object-based sound tracks are available on 169
Blu-ray and 4K Blu-ray titles, Blu-raystats.com found and
25 Vudu streaming titles, Dolby said.
On discs and streams lacking object-based metadata,
you can enjoy some of the benefits of object-based
surround if you play the content through a sound system
equipped with Dolby Atmos and DTS:X decoding and
height speakers. That’s because Atmos- and DTS:X-
equipped sound systems upconvert the sound tracks to
deliver some of the height-effects experience.
What it takes: To deliver the most compelling object-
based surround experience, you’ll need an AV receiver or
preamplifier/surround processor equipped with Atmos
and DTS:X decoders. One of a handful of soundbars with
object-based decoders will also suffice.
For your video source, a standard Blu-ray player or 4K
UHD Blu-ray player is a necessity because most object-
based content is available only on physical Blu-ray and 4K
Blu-ray Discs.
More than 150 movie titles are available with Atmos on
Blu-ray and 4K Blu-ray Discs, and a handful are available
through the Vudu streaming service, Dolby said. Twelve
movies were available on disc with DTS:X in early 2017,
DTS said.
Besides an AV receiver or preamp/surround processor,
you’ll also want multiple speakers set up in 5.1.2, 5.1.4,
7.1.2, 7.1.4, or 9.1.2 configurations to deliver object-
based surround. The first number in each sequence refers
to the number of floor standing or bookshelf speakers in
your system. The second number refers to the number of
subwoofers (you can have more than one), and the third
refers to the number of speakers dedicated to overhead
sound.
Overhead sound can be delivered through various
speaker types. A 5.1.4 or 7.1.4 speaker system, for
example, could consist of a traditional 5.1- or 7.1-speaker
set-up complemented by four in-ceiling speakers. Instead
of installing in-ceiling speakers, however, you could buy
two front and two surround speakers that include built-in
top-mounted height speakers. The height speakers are
angled up to reflect individual sounds off the ceiling place
so the sounds seem as if they’re coming from above.
Each height speaker in this configuration is driven by a
dedicated amplifier channel in your AVR.
If you already own a roomful of floor standing or
bookshelf speakers, another option is to buy two or more
height-speaker modules, which you place on top of your
existing speakers or a nearby surface.
DTS:X promises even more flexible speaker placement.
Future Atmos home theater systems may support as
many as 24 floor speakers and 10 overhead speakers
as new decoder chips come on the market. At least one
AV preamp processor supports 32 channels, thanks to a
customized software-based decoding system. In movie
theaters, Atmos supports up to 64 speakers.
More with less: You might not need height speakers to
reproduce height effects if DTS has its way. DTS has
developed Virtual:X post-processing technology that
takes immersive DTS:X object-based sound tracks, plays
them through a traditional 5.1-channel speaker system
or soundbar to deliver a compelling immersive height
experience. Select AVR and soundbar makers have
committed to offering products with Virtual:X in 2017.
With select TVs from at least one supplier in 2017,
you won’t need speakers other than the speakers that
come with your TV to enjoy object-based surround. That
company embedded Dolby Atmos decoders in select high-
end smart TVs and turned to DSP to deliver some of the
Atmos experience when the TVs’ apps stream Atmos-
enabled movie soundtracks.
More sources due: Traditional pay TV providers and
over-the-air TV stations also plan to offer object-based
surround sound. Cable TV company Comcast, added the
technology to a set-top box in 2016 for the day when
Atmos material becomes more widespread among linear-
TV and OTT content.
The next generation of over-the-air digital TV
broadcasts will also support object-based surround and
deliver 4K video with HDR to boot. Those capabilities
are being baked into the ATSC 3.0 DTV standard
being cooked up by the Advanced Television Systems
Committee (ATSC), which plans to finalize the entire suite
of ATSC 3.0 standards in 2017.
Third way: A third advanced surround sound format,
Auro-3D, has emerged from a small Belgium company
called Auro Technologies. Its technology is channel-
Digital America 2017 79
 HOME THEATER
based, not object-based like Atmos and DTS:X. Auro-3D
sound systems deliver height effects through multiple
height-channel speakers on the wall and an overhead
speaker on the ceiling.
Ten audio brands offer select components with built-in
Auro-3D decoders or with optional Auro-3D upgrades.
About 10 international movies are on Auro-3D Blu-ray
Discs but not readily available in the U.S. About 36 Blu-ray
music discs are available in the U.S., Auro said. As with
Dolby Atmos and DTS:X sound tracks, Auro soundtracks
on Blu-ray movie discs are compatible with existing Blu-ray
players.
How to Build a Surround Sound System
Whatever your budget, living-room layout, or décor, there’s
a surround system for you.
For the enthusiast, a component-based audio system
provides the greatest sonic impact. Component choices
include AV receivers driving multiple separately purchased
speakers. For the convenience-minded, home theater-in-
a-box (HTiB) systems package all of the audio equipment
needed – including speakers – into one purchase. And for
the convenience and décor-minded, a soundbar provides a
slim horizontal speaker that complements a slim TV and
often features virtual surround technology to approximate
true surround sound without cluttering up the room with
speakers.
Component options: A component-based surround system
delivers the ultimate in performance, offering higher
output, louder and deeper bass, greater sonic accuracy, and
greater depth and localization of individual sound effects.
Component-based systems are often built around a
surround-decoding AV receiver, which packs an AM/
FM tuner, five or more amplifier channels, and surround
decoders into a single chassis. Most AV receivers also
stream music from networked computers and cloud-based
music services, and most feature built-in stereo Bluetooth
and Wi-Fi to stream music from the cloud and from
networked computers and smartphones. (See the Audio
Section.)
For ultimate performance, some enthusiasts connect
a preamplifier/surround sound processor to a separately
purchased multichannel amplifier, which in turn drives
multiple separately purchased speakers.
To produce surround sound, AV receivers and preamp/
processors must be connected to five or more speakers,
which can be purchased individually, in pairs, or in
packages of five or more. Consumers can also add one
or more subwoofers to deliver the deepest, loudest, most
accurate bass.
Surround-decoding AV receivers range from around
$249 up to about $5,999. Preamp/surround processors
range in price from $599 to $31,500 and up.
80 Digital America 2017
HTiB options: Their popularity has waned with the
rise of sound bars, but HTiBs represent another way to
build a surround sound system. HTiBs bundle all audio
components – and a Blu-ray or DVD player – into one
complete package. HTiB solutions are ideal for people
who don’t have time to shop for separate components
or are intimidated by properly matching components to
maximize performance. HTiBs are also more affordable
than component-based systems.
Most HTiBs come with a DVD or Blu-ray player
integrated into their main tabletop console, which usually
includes an AM/FM tuner, surround decoders and
amplification. Models with an integrated Blu-ray player
start around $129. Models with integrated DVD player
start around $99 and high-performance systems range up
to $3,999.
Soundbar options: Amplified soundbars take the concept
of simplification to the next level. Many soundbars are
designed simply to fatten up the thin sound of thin flat-panel
TVs, whose embedded speakers often distort at moderate
volumes and struggle to deliver intelligible vocals. Many
soundbars, however, include surround sound decoders and
surround-virtualization technologies to produce a reasonable
facsimile of surround sound without the need to set up
five or more separate speakers. Many soundbars also offer
such high audio quality that consumers use them as their
main stereo system to play music, particularly streamed via
Bluetooth from a smartphone or tablet or via Wi-Fi from a
networked computer or from the cloud.
In 2015, the first soundbar launched with the ability to
decode object-based surround sound, using virtual surround-
processing to deliver surround and height. In 2017, the
selection will expand to at least eight brands.
Soundbars take the shape of a single, slim horizontal
cabinet that complements the shape and depth of flat-panel
TVs. Some are less than 1.5-inches-tall, and some are as little
as 1.2-inches-deep. The cabinet contains amplifiers, multiple
speakers and often virtual-surround processing but no Blu-
ray or DVD player, based on CTA’s definition of soundbars.
To deepen bass response, many sound bars come with wired
or wireless subwoofers.
Some soundbars also come with optional or included
wireless surround speakers, which deliver more convincing
surround effects than virtual-surround technologies.
Soundbar prices start around $49 and range up to $6,000.
Why Soundbars are Thriving
Soundbars are enormously popular. They’re simple to set up,
blend in with the cosmetics of flat-panel TVs, take up little
space and deliver great sound. And in 2016, factory-level
sales surpassed the $1 billion mark for the first time,
outperforming all other audio components in unit sales and
revenues, CTA estimates show.
Factory-Level Soundbar Sales
(units in thousands, dollars in millions)
Units Dollars
2013 2,707 33.3% $520 50.3%
2014 3,468 28.4   643 23.7
2015 5,800 67.2   896 39.3
2016e 6,960 20.0 1,064 18.8
2017p 7,656 10.0 1,159 8.9
Consists of amplified and unamplified soundbars lacking embedded
Blu-ray or DVD players.
Source: CTA Market Research
Soundbars have proven so popular that in percentage
terms they have grown faster than any other major segment
of the home audio industry since 2008, CTA statistics
show. In 2016, factory-level dollar sales rose an estimated
19 percent to $1.1 billion on an estimated 20 percent unit
sales gain to 6.96 million units, says CTA. The association
forecasts an 8.9 percent revenue gain in 2017 to $1.2
billion.
In 2014, soundbar sales exceeded HTiB sales for the
first time. By January 2017, the household penetration rate
of soundbars hit 23 percent, up from January 2012’s eight
percent, CTA found.
To tap into demand, retailers and suppliers have
aggressively expanded their soundbar selections and scaled
back their HTiB selections. In fact, in 2016 and 2017,
major suppliers declined to introduce new HTiBs.
Retailers in particular are excited to promote
soundbars, given that retailers often make more profit on
a $300 or $400 soundbar than they do on a $1,000 TV,
marketers contend.
Soundbar juggernaut: Because of soundbars, HTiBs have
turned into the MP3 players of the smartphone era. Just
as people are ditching dedicated MP3 players and iPods to
stream music through their smartphones, consumers are
turning to soundbars to deliver expansive home theater
sound.
Soundbars have also cut into sales of entry-level AV
receivers and compact 5.1-speaker packages, suppliers
said. Entry-level AV receiver sales are taking a hit because
of improved soundbar performance and the inclusion of
advanced AVR features, including HDMI-input switching
and the ability to stream music from networked computers
and from cloud-based music-streaming services. Like many
AVRs, many soundbars also play back high-resolution
music files downloaded to PCs in formats that exceed CD-
sound quality.
Also like many AVRs, many soundbars can also
be integrated into wireless multi-room audio systems,
which distribute music wirelessly throughout the house
to multiple tabletop single-cabinet stereo speakers. The
speakers, AVRs and soundbars reproduce music streamed
from networked computers, smartphones, tablets and
the cloud. The speakers, AVRs and soundbars can play
the same song or different songs simultaneously. Audio
sources, even turntables, connected to AVRs and soundbars
can be distributed wirelessly throughout the house.
Many consumers view soundbars as surround sound
replacements for HTiBs because many soundbars include
the surround-decoding and surround-virtualization
technologies needed to produce a reasonable substitute for
true multi-speaker surround sound.
Soundbars also simplify set-up and provide a more
elegant aesthetic look. One bar above or below a flat-panel
TV replaces three separate front speakers and two to four
surround speakers. Set-up can be limited to a single audio
cable connection to a TV’s audio output, with video source
switching relegated to the TV.
Even though many consumers would prefer a true
surround experience delivered by a multi-speaker HTiB
or component audio system, they nonetheless choose
convenience over performance in opting for soundbars.
Price points: Soundbars start around $49 to high-
performance models for $6,000. Models as low as $49
also include stereo Bluetooth to play music streamed
wirelessly from a smartphone, tablet, or laptop. And
models starting at about $79 come with included
outboard subwoofer to enhance bass response.
Many low-priced soundbars simply connect to a
TV’s analog or optical digital audio output to amplify
TV audio, leaving the TV to switch among such HDMI-
connected video sources as a cable set-top box, Blu-ray
player, or OTT streaming media adapter. The TV then
passes the audio signal to the sound bar for amplification.
If the audio signal is sent through the TV’s optical
output, a surround signal might reach a surround-
decoding soundbar, depending on the TV, video source
and the soundtrack’s format. If the soundbar includes
surround decoders and virtual-surround technology,
then the soundbar could create a sound field that
approximates true surround sound, delivering surround
channel effects without the need for separate surround
speakers.
Starting at around $249, select soundbars with
included wireless surround speakers deliver more realistic
surround sound. Models around $229 can connect to
optional wireless surrounds.
Starting at around $179, some soundbars connect to
a TV via an HDMI cable, enabling the bars to capture
surround signals from a smart TV’s embedded video
streaming apps and from TV-connected OTT streaming
media adapters.
Digital America 2017 81
 HOME THEATER

Component Audio Sales suppliers plan to offer them, each delivering object-based
(Factory level, in millions) surround in their own way, at prices running from around
$899 to $6,000.
2013 $2,133 38.9% Most of the object-based sound bars use multiple built-
in speakers and digital signal processing (DSP) technology
2014  1,607  -24.7
to deliver convincing height and surround effects. At least
2015  1,993 24.0 one model is packaged with wireless surround speakers to
2016e  2,225 11.6 deliver true surround. And several models are packaged
with a slim-line AVR that includes amplification,
2017p  2,367 6.4 decoders, virtual-surround and HDMI switching.
Components include receivers, tuners, amplifiers,
preamplifier/processors, DACs, CD/SACD players, turntables and HTiBs: The Washed-up Heavyweight
speakers (including active sound bars) but excludes systems and multi-
room audio/video components, systems. The HTiB system, once a contender, is down for the
Source: CTA Market Research count, pummeled by a more nimble newcomer. Years ago,
the HTiB was the heavyweight surround sound champ,
thanks to its one-stop-shopping appeal, sophisticated
These soundbars usually come with a single HDMI feature sets, integrated Blu-ray Disc players, and 5.1- to
input to connect directly to a Blu-ray player or Blu-ray- 7.1-speaker systems that delivered truly discrete surround
equipped game console, enabling the soundbar to receive effects in a convincing manner.
the highest quality surround signals: wide-bandwidth Then soundbars entered the ring, presenting a new
Dolby TrueHD and DTS-HD Master, often combined audio alternative. Soundbars evolved to include many of
with object-based metadata to deliver height effects. the HTiB’s differentiating features, including HDMI-input
Soundbars that decode those formats can then decode and switching, cloud-based music streaming and wireless
process the highest quality surround signals. multi-room audio technology. With smart TVs and low-
Starting at around $299, select soundbars include two priced set-top media streamers proliferating to stream
or more HDMI inputs to take over video switching duties movies from the cloud, many consumers found they
from a TV. This type of soundbar connects to HDMI didn’t need an HTiB’s integrated Blu-ray/DVD player to
cables coming from multiple video sources, captures the watch movies.
video sources’ audio for reproduction, and passes each Practical objections also played a role in the HTiB
sources’ video to the TV. This can make installation decline. Many rooms aren’t laid out to accommodate
simpler and neater when a TV is mounted on a wall. The multiple speakers in locations that deliver optimum
fewer visible cables running to the TV, the better. surround sound. Many consumers also don’t want to
clutter up a room with five or more speakers or run
Object-based surround soundbars: Many soundbars are speaker cables around a room to surround speakers.
also equipped to handle object-based surround sound. As HTiB sales fell, suppliers dramatically scaled back
The first one appeared in 2015, but in 2017, at least nine their selections, leading to further sales declines.
Sales peaked in 2003 at a factory-level $961 million.
In 2016, HTiB sales plummeted to a meager $146 million,
U.S. Factory-Level Home CTA estimates show.
Theater-in-a-Box (HTiB) Sales
(Units in thousands, dollars in millions) Component Audio
For the best home theater and stereo performance,
Unit Sales Dollar Sales components are still the way to go, and demand is rising,
2013 1,535 -22.7% $549 -11.1% CTA found.
2014  797 -48.1 225 -59.0 Audio components include AV receivers, preamplifier/
surround processors, separate amplifiers, in-room cabinet
2015  773 -3.0 182 -19.1 speakers, on-wall speakers, and custom-installed in-
2016e  634 -18.0 146 -19.8 ceiling and in-wall speakers. Other types of components
2017p  570 -10.1 130 -11.0 for music listening include CD and Super Audio CD
players, dedicated music servers, two-channel amplifiers,
HTiBs include receiver/speaker packages, HTiBs with integrated two-channel integrated amplifiers, and digital-to-analog
Blu-ray players, and soundbars with included DVD or Blu-ray player.
Amplified soundbars without Blu-ray player are counted in audio-
converters (DACs). Some high-performance speakers cost
component statistics. as much as $225,000 per pair. AV receivers are available
Source: CTA Market Research at up to $5,999.

82 Digital America 2017

Rollicking ride: Factory-level component audio sales,
excluding multiroom-AV systems, jumped 24 percent in
2015 to $1.99 billion and jumped again in 2016 by an
estimated 11.6 percent to $2.23 billion. Most of the gain
came from rising sound bar sales, which are classified as
components by CTA. But sales of receivers are also gaining,
rising an estimated six percent to $452 million in 2016.
They’re forecast to rise another five percent in 2017.
Rebound rationale: What’s behind the bounce in AV
receiver sales? One reason is the growing performance
of TVs and growing availability of huge screen sizes.
Both drive TV sales to premium consumers who tend to
upgrade the performance of their home theater’s audio
system to match the performance of their new TVs. TV
performance is growing with the widespread availability
of 4K UHD TVs with wide color gamut and high
dynamic range (HDR), more 4K video streaming content,
and the launch of 4K Blu-ray players that deliver wide
color gamut and HDR.
Screen size also plays a major role in home theater
upgrades. People with 55-inch TVs didn’t rush to
replace them with 60- or 70-inch TVs, but with growing
selections of 70- to 120-inch TVs, premium customers
have a bigger reason to upgrade their sets.
CTA also suggests the growing selection of AV
receivers with wireless connectivity for Wi-Fi-based
wireless multi-room audio and for cloud-based streaming
might also play a role in AVRs’ recent gains.
Making connections: Growth is also due to owners of older
AV receivers and preamplifier/surround processors returning
to the market to upgrade to the latest digital HDMI
(High-Definition Multimedia Interface) connections. These
consumers need receivers whose connections are compatible
with the HDMI ports of 4K TVs, 4K Blu-ray players and
4K-capable OTT media streamers.
AV receivers with newer HDMI connections can pass
through more HDR video formats to 4K TVs from 4K
Blu-ray players and from 4K set-top IP-video streamers.
Consumers also need HDMI connections with High-
bandwidth Digital Content Protection (HDCP) 2.2 copy
protection technology to pass through copy-protected
4K content to 4K TVs.
Objectifying sound: The launch of object-based
surround sound formats is also encouraging some
consumers to replace older AV receivers and preamplifier
processors with models that feature Dolby Atmos
and DTS:X surround decoding. The new surround
formats also encourage purchases of in-ceiling speakers,
dedicated height-channel speakers, and floorstanding
and bookshelf speakers with integrated height-channel
drivers.
More than 75 AVRs are available with object-
based surround decoding, and more than 45 speakers,
including sound bars deliver height channels, Dolby
said. In the U.S., at least 11 brands offer AV receivers
with object-based surround. Multiple brands also offer
preamp/surround processors with the technology.
What it costs: Surround-decoding AV receivers range
in price from a suggested $249 to $5,999. Preamp/
surround processors range in price from $599 to
$31,500 and up.
AVRs that decode object-based surround formats
are priced from a suggested $479 to $5,999. And AV
preamp processors that decode object-based surround
formats started at a suggested $2,199 and range to
$31,500.
For component audio suppliers, the goal is to match
technological improvements in video quality with
equally impressive gains in surround sound quality for
households on any budget.

Acronyms
AMOLED Active Matrix Organic
Light-Emitting Diode
ATSC Advanced Television Systems
Committee
AVR Audio/Video Receiver
DAC Digital-to-Analog Converter
DLP Digital Light Projection
DMD Digital Micromirror Device
DSP Digital Signal Processing
DTV Digital Television
EST Electronic Sellthrough
HDCP High-bandwidth Digital Content
Protection
HDMI High-Definition Multimedia
Interface
HDR High Dynamic Range
HTiB Home Theater-in-a-Box
LCoS Liquid Crystal on Silicon
OLED Organic Light-Emitting Diode
OTT Over-the-Top
PCM Pulse Code Modulation
SMPTE Society of Motion Picture and
Television Engineers
TRP Tip & Roll Pixel
UHD Ultra High-Definition
VOD Video On-Demand
VR Virtual Reality

Digital America 2017 83

84 Digital America 2017
 TECHHOME
Top Trends
•  ome tech is benefiting from connectivity, chalking
H
up an impressive 94 percent growth in 2016.
•  onnected home technologies will see excellent
C
growth in 2017 reaching $3.5 billion in sales, a third
of all home technology revenue.
•  igital assistant devices such as Amazon Echo and
D
Google Home listen to spoken commands and show
how artificial intelligence will play a role in future
households. Nearly three million digital assistant
devices were shipped in 2016 and another 4.5
million will ship in 2017.
•  he entire home technology ecosystem will total
T
$10.7 billion in revenues in 2017, a 17 percent
increase over last year.
•  etworked video cameras are the most common
N
component of today’s smart home.
•  espite impressive growth, adoption of newer
D
connected home solutions is still in the early
adopter phase.
•  here is continuing strong interest in smart home
T
voice control.
•  mart home connectivity now includes kitchen and
S
laundry room appliances.
•  roduct integration is now a key theme with either
P
NEVARPP

a digital assistant or a mobile app controlling all

system functionality.
 TECHHOME

A
s smart home technology continues to evolve,
consumers are using it to connect a wide range of
devices, so they work together and make life easier.
Smart home applications now range beyond common
connected products like computers, smart TVs and
thermostats (which sparked the birth of the category several
years ago). With one touch or a spoken command you now
can switch on/off or dim the lights, play music, turn up the
heat or turn on the air conditioning, lock the doors, arm
the security system, remotely raise/close the blinds and even
start brewing coffee from the comfort of your bed.
Adding momentum this year are digital assistant devices
such as Amazon Echo and Google Home. These are
intelligent speakers that listen to your commands, offering
us a first look at the role artificial intelligence will play in
future households. According to CTA, nearly three million
digital assistant devices were shipped in 2016 and another
4.5 million will ship in 2017.
Consumers are amazed by what they can accomplish
using smart home technology. So the following statement
might be placed under the “Captain Obvious” banner:
industry research analysts predict the market for smart/
connected homes will have a very high ceiling.
Here are a few examples:
 TA’s Consumer Technology Sales and Forecasts (January
C • by mobile apps or a browser, and send alerts or messages
2017) study concludes that “Home tech is beginning to
benefit from connectivity, as shown by the 94 percent
growth in connected home devices in 2016.” Further,
the study predicts connected home technologies will see
excellent growth in 2017, chalking up $3.5 billion in sales
and representing a third of all home
$10,696 technology revenue. In the traditional
home technologies category, climate
control devices remain a bright spot
HOME with $360 million in revenue – a
TECHNOLOGY $9,108
28 percent increase in revenue over
REVENUE 2016. The entire home technology
ecosystem, including digital assistant
$7,552 devices (such as Amazon’s Echo and
$6,519 Google’s Home), will total $10.7
billion in revenues in 2017, a 17
$5,924
percent increase over last year.
$5,542 • According to the NPD Group,
annual 2016 U.S. dollar sales
Revenue [Millions]
third of smart homes have this feature installed. In fact,
over the last year consumer demand for multi-packs of
IP cameras has increased 129 percent in U.S. dollar sales
versus 2015. Smart entry devices, such as smart doorbells,
saw an increase in dollar and unit sales of 171 percent
and 206 percent, respectively, when compared to the year
prior, according to NPD’s Retail Tracking Service.
• A MarketsandMarkets report, Smart Home Market
by Product and Geography—Global Forecast to 2022,
estimates the smart home market will reach $121.73
billion by 2022, at a CAGR of 14.07 percent between
2016 and 2022. The study classifies the smart home
market on the basis of categories such as lighting control,
security and access control, HVAC, entertainment, home
healthcare and the smart kitchen.
• Despite its strong showing, Gartner found that adoption
of newer connected home solutions “is still at the early
adopter phase,” and that only about 10 percent of
households currently have connected home solutions, a
conclusion based on responses from nearly 10,000 people
in U.S., the UK and Australia during the second half of
2016. According to Gartner, “connected home solutions”
consist of a set of devices and services that are connected
to each other and to the internet and can automatically
respond to preset rules, be remotely accessed and managed
to the user or users.
Bella Voce
The drumbeat for a voice controlled/artificial intelligence
digital assistant is growing louder and louder. Now a
viable control center for the connected home, smart voice-
activated devices like the Amazon Echo and Google Home
can manage and monitor what’s happening in every room
of your house as well as keep an eye on the things that are
outside your door.
Research from Parks Associates’ 360 View: Residential
Security & Smart Home study found strong interest in
smart home voice control noting that 55 percent of U.S.
broadband households want to use their voice to control
their smart home and entertainment devices. The high
positive response rate was notable among those households
where smart light bulbs, programmable thermostats, smart
smoke or carbon monoxide detectors and smart garage
door openers are in use.

‘12 ‘13 ‘14 ‘15 ‘16e ‘17p
Source: CTA Market Research
of home automation products
experienced growth of 57
percent versus 2015. Security and
monitoring products continue to
lead the category, making up over
60 percent of dollar
share. Networked video cameras
are the most common component of
today’s smart home, as nearly one-
Amazon had a particularly strong year in the smart home
space in 2016 thanks to its Alexa-enabled Echo and Echo
Dot devices. Apart from playing music (these are hands-free
speakers after all) and controlling your smart home, 4K UHD
televisions can be operated by Alexa, washers will keep you
informed on their cycle times via an Alexa-enabled device and
you can set oven temperatures by talking to your Echo.
Similarly, Google Home is a voice-activated speaker
powered by the Google Assistant. It learns your preferences,

86 Digital America 2017

 SMART HOME
+63%
can retrieve flight information, set alarms and timers, and
even tell you about the traffic on your way to work. Google
Assistant also will be integrated into NVIDIA’s Shield TV
product so you can ask a question verbally and in addition
to an audible reply, an answer will appear on your TV
screen. You can use voice commands to find content, pause,
fast-forward and rewind programming.
In today’s competitive world the time between the debut
of a good idea and someone else borrowing it for a different
purpose is frequently not long at all. For example, Sonos
was alone in the market when it launched the industry’s
first Wi-Fi multi-room audio speakers in 2005. Sometime
later this year, Sonos will offer a firmware upgrade that
will enable Amazon’s Echo and Dot speakers to stream
cloud-based music services over a Wi-Fi network to Sonos
speakers throughout the house.
NPD Group noted that voice command is becoming
more commonplace in smart homes, with nearly half of
these homes using voice commands in some manner, and
one-quarter using it to control a home automation device.
According to NPD, one in five Amazon Echo owners use
the device to control another device in their home.
Like much of the smart home segment intelligent home
speakers are all about growth. Strategy Analytics has paced
the value of the intelligent home speaker market at more
than $1.5 billion in 2017, with seven percent of North
American homes owning at least one by the end of the year.
By 2022, driven by improved accuracy in speech recognition
and multiple language support, the company predicts
marketplace value will rise to $5.5 billion.
Connected Appliances
While the kitchen and laundry room have been the last
frontier in the smart home movement, suppliers are now
leaping over one another to get in the game. Last year,
for example, GE Appliances launched Amazon Dash
Replenishment with its Wi-Fi connected washer products
and dishwashers, making it easy for consumers to reorder
liquid detergent, fabric softener and dishwasher pods. Now,
the Haier unit has added a third product line to Amazon’s
Dash smart reordering system by enabling its connected
clothes dryers to automatically reorder dryer sheets through
Amazon when its use count indicates that supplies are
running low. Owners simply set up Dash Replenishment
29.2 millon units (+63%)
$3.5 billion in renenue (+38%)
Source: CTA Market Research
Consumer Technology Association
through the GE Laundry app using their Amazon account
and select the laundry dryer sheets they want, which
are then automatically reordered. The connected dryer
measures how many dryer sheets are used by counting
drying cycles.
GE also has a partnership with Google’s Nest. The Nest
Learning Thermostat learns from you, creates a schedule
and is proven to save energy. Google’s Nest Protect smoke
detector can turn off connected ovens if it detects you’ve
burned the turkey, or notify you the appliance was left on
after everyone left the house.
In 2016 Jenn-Air, the luxury Whirlpool brand supplying
connected wall ovens announced it would become part of
the Nest thermostats ecosystem and for 2017 the supplier
has followed up by making Alexa its second third-party
alliance. Combining both partnerships, kitchen and house
temperatures can remain comfortable automatically while
the oven is on. The brand also indicated it would extend its
IoT reach to include Google Home.
For its part, new smart appliances launching across
Whirlpool’s portfolio of brands will feature voice control
capabilities through Alexa-enabled devices. Consumers
CTA’s TechHome
Division
CTA’s TechHome Division represents the channel for
home automation, entertainment and networking
products, including installers, distributors and
manufacturers.
Key Focus
• Promote and expand the market for professionally
installed connected home solutions.
• Increase awareness of energy-efficient systems
and installations that professionals design and
install.
• Expand awareness and participation of the smart
home industry to a broad audience including, but
not limited to realtors, builders, architects and
appraisers.
Digital America 2017 87
 TECHHOME
can ask Alexa to pause and start the washer and dryer; turn
on/off quiet mode; tell the dryer to run the Wrinkle Shield
option; ask if the washer or dryer is running; and ask for the
time remaining on a wash or dry cycle.
In the kitchen, consumers can use Alexa to interact with
their smart oven to adjust the cooking mode, temperature
and time; ask whether the oven is on; ask how much time
is remaining on the oven timer; ask for the current oven
temperature; and set, start and stop the oven timer.
LG’s Smart Instaview Refrigerator is a webOS-powered,
internet-connected fridge that, among other things, supports
integration with Amazon’s Alexa service. These refrigerators
offer a tinted glass panel that allows you to see inside the
easy-access door without letting the cold air out. You simply
knock twice on the glass to illuminate the contents within.
The company’s second-generation InstaView smart fridge also
can automatically fill the ice tray at the time of day when cold
drinks are most in demand, or initiate a four-stage sterilization
system to extend food life when it senses temperature and
humidity conditions that could promote spoilage.
Samsung has incorporated advanced voice technology
across many of its Family Hub 2.0’s refrigerator apps,
allowing owners to ask for the time and weather, add items
to shopping lists, order groceries online, or manage to-do
lists and calendar schedules. The fridge comes embedded
with Amazon’s Alexa voice capabilities and can pair with
an existing Amazon Echo. Integration with Samsung’s
own SmartThings platform is expected in the near future,
according to the company.
Whatever Your Smart Heart Desires
A raft of other products demonstrate how manufacturers
are taking advantage of the public’s love affair with smart
home devices:
• At CES 2017, Heath Zenith showcased a home
surveillance system called Notifi that’s completely
inconspicuous. It looks like an ordinary LED light bulb
but incorporates a small camera that can visually monitor
whatever requires surveillance. The system features a
115-degree wide-angle camera which is activated by a
180-degree motion sensor. A motion sensor activates the
camera, and a doorbell and chime come with the system.
• The Alexa-compatible LIFX lightbulb can generate 1100
lumens of light, 16 million colors and 1000 shades of
warm to cool whites. The free LIFX app is available
on Android, iOS and Windows 10. With a few taps on
your tablet, phone or watch, colors go from bright and
vibrant to pure whites in seconds so you can choose the
perfect light for each room of your home. It can connect
with other smart devices such as Nest Protect and Nest
Thermostat as well as Amazon Echo and the Samsung
SmartThings motion sensor.
• Yale smart locks, along with the Samsung SmartThings
Hub, allow you to remotely lock and unlock your door
88 Digital America 2017
HGTV Smart Home
HGTV recently constructed its 3,300 square foot HGTV
Smart Home in Scottsdale, AZ, with the help of local
architect Candelaria Design Associates and builder
Eagle Luxury Properties. The home is part of a grand
prize package valued at more than $1.5 million that
will be awarded to one lucky winner this summer.
The fully furnished home is ENERGY STAR® 3 and
Bronze-level Green certified, and integrates tech
gadgets and smart solutions to enhance entertaining
and everyday living. Scottsdale also presents the
perfect living location that combines technology and
culture, which follows the path of past HGTV Smart
Homes built in Raleigh, Austin and Nashville.
For more information visit HGTV.com/Smart.
from anywhere. You can also use a lock and unlock
on a predetermined schedule and trigger notifications
when activity happens. Yale also has announced that its
Real Living Assure Lock deadbolts and levers using the
Z-Wave or ZigBee wireless protocol are now compatible
with Amazon Alexa when used in conjunction with a
SmartThings Hub and app or the Wink Hub and app.
Voice commands such as, “Alexa, lock my front door,” or
“Alexa, is my back door locked?” will trigger automatic
responses and/or actions from Alexa.
• Rachio’s Smart Sprinkler Controller Generation 2 gives
you control over eight or 16 zones. It won’t water the lawn
if it’s raining, and you can turn it on and off remotely with
your phone. The unit integrates with devices like Amazon
Alexa and Google Assistant (which allows you to use voice
commands to start and stop watering sessions), If This
Then That (IFTTT, a free service that lets you connects
apps, tools, and internet-connected devices without
knowing any code), Nest thermostats, and the Samsung
SmartThings and Wink home automation hubs. Screen
buttons let you view watering history, schedule updates
(skipped cycles), and device updates (on/off, standby
mode). The usage button displays a year-to-date summary
and a daily water use graph.
Getting Started
Connecting all of these devices through a robust, secure,
always-on gateway is the essential first step toward
enabling the smart home. At its most basic the connected
home requires a Wi-Fi connection and a hub that
connects wirelessly and allows you to integrate smart
devices, services and apps, ranging from communications
and entertainment to healthcare, security and home
Consumer Preferences
In CTA’s study Consumer Purchase Journey: Smart Home Device, the association engaged iModerate to conduct an online survey with
1,400 consumers. Respondents were invited to participate in an online, one-on-one interview with a live moderator.

DEVICES OWNED

55+45+A 52+48+A 36+64+A 35+65+A 31+69+A 24+76+A 19+81+A 18+82+A 9+91+A

55%

Television
52%

Thermostat
36%

Lighting
control system
35%

Security
system
31%

Speaker
system
24%

Safety system
[like smoke
detectors]
19%

Smart access
or locks
18%

Appliance
9%

Whole house
system
Source: CTA Market Research

In terms of what is important in a smart home device, consumers’ answers include:

• Specific device features – in some cases, very exact features can do such tasks as remote monitoring for a security system.
• Brand strengths – reasons one brand would be better than others in the same category, from pricing to ease of installation.
• Benefits for daily life – 97 percent of smart home device owners recognize positive impacts on their daily lives, including saving
money and giving them peace of mind. As such, they love to show the devices off to their friends and family members. The
emphasis needs to be on how the connected home can help solve daily tasks rather than just being a novelty collection of devices
and apps

WHAT FEATURES OF SMART HOME ARE YOU UTILIZING

79+21+A
79%

Remote
Access
64+36+A
64%

Automation
62+38+A
62%

Monitoring
23+77+A
23%

Data Analytics
2+98+A 2%

Other

Source: CTA Market Research

• It is usually a combination of the above factors that lead consumers to make a purchase.
• Thinking of their next smart home device purchase, about half of device owners are interested in a lighting control system and
half are interested in smart access. And about a third of device owners are interested in any of the available technologies. Males
were found to be more interested in speaker systems and smart access than females.
• The top concern and most common reason consumers give for not making a purchase is price. Because the device is something
they can live without, non-owners and non-intenders often cannot justify the cost.

automation. Hubs such as the Samsung SmartThings,
Wink Hub 2 or Apple HomeKit allow a diverse collection
of smart products to speak the same wireless language, so
that they can be controlled via a software app.
A prominent expectation at CES 2017 in the Smart
Home Marketplace was that this will be the year of smart
home product integration, with the industry focusing on
a few control technologies to cover all applications. The
idea is to control your whole system either though a digital
assistant or via a free mobile app on your phone or tablet.
Having one iOS or Android app integrating device
functionality seems like a sensible and economical way to
architect the smart home. And indeed Gartner has found
that more than half of respondents (55 percent) prefer one
app integrating all connected home devices and services.
Experts suggest the best way to start building your smart
home is to get the basics first, like a smart light bulb and a
smart thermostat, then gradually incorporate other options
like smart blinds, which you can program to sunrise and
sunset, or an intelligent security system that turns on your
outdoor lights when you pull up the driveway. Follow that
with the acquisition of a hub that will allow you to integrate
all of your devices, and you’re on your way to creating the
perfect automated home.
Acronyms
CAGR Compound Annual Growth Rate
HVAC Heating, Ventilation and Air Conditioning
LED Light-Emitting Diode
UHD Ultra High-Definition

Digital America 2017 89

90 Digital America 2017
THE FUTURE
OF VEHICLE
TECHNOLOGY
Top Trends
•  BI Research forecasts that by 2030 there will be
A
10 million “level 5” or fully driverless vehicles on
roads worldwide, including 2.6 million in the U.S.
However, these will compose only a tiny fraction of
the total vehicle population, which ABI says will be
one billion worldwide and 250 million in the U.S.
•  BI Research further predicts that by 2030 there
A •
will be more than 11 million shared driverless
vehicles on roads worldwide, serving an average of
64 users each. As a result, automakers will design
vehicle interiors to be reconfigurable, so that each
passenger’s distinct preferences or needs can be
accommodated.
•  TA research shows there is considerable interest
C vehicle dashboard. According to a January report
in advanced driver assistance systems (ADAS)
such as lane departure warning, automatic
parking assist, adaptive cruise control and collision
avoidance systems — even among people who
have no experience with them. According to a CTA
online poll conducted in July 2016, an average
of 50 percent of drivers who never used these
technologies would be interested in upgrading their
current car or truck with ADAS features, and an
additional 35 percent would consider the upgrade.
Only 15 percent would not. The poll was conducted
for a CTA market research report titled Self-Driving
Vehicles: Consumer Sentiments.
•  he CTA report also shows strong consumer
T study found that 47 percent of U.S. consumers trust
interest in test riding a driverless car or truck.
Seventy percent of those polled said they were very
or moderately interested in a test ride, while only
16 percent were slightly interested, and 14 percent
were not interested. Similarly, more than 60 percent
said they would consider replacing their current car
or truck with a completely self-driving vehicle, and
only 21 percent said they would not. Just 43 percent
of those who were interested described themselves
as early adopters of new technologies.
 eloitte LLP research finds that although U.S.
D
consumers are keen on ADAS — especially younger
consumers — they’re less interested in spending
extra money on “cockpit connectivity technologies”
such as features that integrate vehicles with
home automation systems or those that control
personal smartphone applications through the
on Deloitte’s Global Automotive Consumer Study,
the amount American buyers are willing to pay for
these features has fallen 32 percent to $925 since
2014, when a prior version of this study pegged the
amount at $1,370 across five technology categories.
In Japan the drop was a steeper 48 percent decline
to $360 this year from $700 three years ago. For the
latest iteration, Deloitte surveyed more than 22,000
consumers in 17 countries.
•  rust in the manufacturer is a major factor in
T
whether people believe driverless cars will be safe,
but consumer trust levels vary widely from country
to country — and from study to study. The Deloitte
a traditional automaker to bring a safe driverless
car to market, yet only 20 percent trust a Silicon
Valley company to do so. But an online survey of
1,510 U.S. drivers conducted by AlixPartners last
July — following a well-publicized fatal accident in
a self-driving Tesla car — found the opposite: 41
percent of respondents said they would trust a new
Silicon Valley manufacturer to program a driverless
vehicle; 23 percent said they would trust a Japanese
automaker; 16 percent said they would trust a
“traditional Detroit” automaker; 12 percent said
they would trust neither a Silicon Valley technology
CHESKY_W
company nor an automaker, or some other entity
and eight percent said they would trust a European
automaker.
Digital America 2017 91
 THE FUTURE OF VEHICLE TECHNOLOGY

Automotive Electronics Revenue (millions)

2013 2014 2015 2016e 2017p
Entertainment Devices Aftermarket Sound Equipment $1,082 $1,056 $1,055  $929 $897

Factory-Installed Automotive Technology  9,150  11,124 12,393  15,134 16,975

Mobile Video Devices 357 300 526    493   504

Information and Security Aftermarket Vehicle Security   284 270 255    2 45   2 30

Portable and Transportable Navigation   706 733 621   520   4 59

Rear-View Cameras    53 56 33   3 6   3 8

Total  $11,632  $13,539 $14,883 $17,357 $19,103

Source: CTA Market Research

T
he democratization of car tech got underway last Connectivity, he says, dates back to the early cell phone
year as more automakers brought advanced driver integration more than 10 years ago and has evolved with
assistance systems (ADAS) downmarket, in a steady large in-dash displays. In 2020 and beyond “significant
march to the debut of fully driverless vehicles early next changes in human computer interaction” will occur as
decade. software and hardware become “much more modular.”
Typical of tech experts, an acronym describes the Moreover, in the next decades, as driverless vehicles
four key trends underlying this movement: CASE, which proliferate, there’ll be even more opportunities to
stands for Connectivity, Autonomy, Shared mobility, integrate connectivity, Marian foresees. Autonomy has
and Electrification. And at the heart of it all is the its roots in ADAS — also new in the last decade — and
development of software to take advantage of ever less culminates in a vehicle with no human driver (a “level
costly hardware. 5” driverless vehicle) sometime between 2030 and 2040,
“Each letter has its own story,” says Alexandre he says.
Marian, a director in the automotive practice of Shared mobility was introduced in the U.S. by car
consulting firm AlixPartners in Southfield, MI. sharing services like Zipcar, which was founded almost
20 years ago, and
started even earlier
in Europe. “Clearly
this trend is picking
up steam,” Marian
declares, pointing out
that shared mobility
now encompasses
ridesharing, too. As
recently as three years
ago an AlixPartners
study revealed that
every shared car
takes 32 new or
used vehicles off
the road in the top
10 U.S. car sharing
markets: Austin,
Boston, Chicago,
Houston, Miami, New
York, Portland, San
CHOMBOSAN

Francisco, Seattle,
and Washington,
D.C. That study will

92 Digital America 2017


be updated soon. Electrification of automobiles is many
decades old, but environmental regulation has spurred it
forward in recent years, he says.
CASE was the basis for mergers, acquisitions and
partnerships in the auto industry last year, notes
Manuela Papadopol, director of business development
at Elektrobit, a supplier of ADAS and navigation system
technologies to automakers such as Mercedes-Benz
and Audi, based in Seattle, WA. That has persisted this
year, she says, giving the example of Ford Motor Co.’s
alliance with Argo AI (an artificial intelligence technology
provider).
“This will continue
to develop much more
than before,” Papadopol
Consumer says. “Autonomous
Awareness of driving is definitely at the
ADAS Features forefront of the trends,
and the main component
20%
of that is software,” she
29
adds. “I see the trend of
autonomous driving having
larger priority for the
carmakers, much more than
51
Adaptive electrification. This is a shift
cruise
control that I see. Electrification
12% used to be a primary focus.”
19 At a deeper level,
artificial intelligence and
new software architectures
that call for fewer electronic
69 control units or ECUs are
Automatic
parking altering the way self-driving
assist vehicles are developed,
19% Papadopol observes. “At
14 Elektrobit, we’re looking
at redefining the electronic
architecture, the software
architecture, for the
67 autonomous driving era”
Collision
avoidance coming circa 2025, she says.
system According to estimates
21% from the consulting firm
21 Frost & Sullivan, driverless
cars will be an $84 billion
market by 2030, and 50
percent will be attributable
58 to software.
Lane “True autonomous is
departure
warning about data. It’s about how
one aspect of what you do
Used
Heard of connects with the other
Neither used nor heard of aspect. It could be a car,
Source: CTA Market Research it could be a thing,” says
Levels of Automation
Level 1 are active ADAS features within the context of
automation as defined by the Society of Automotive
Engineers (SAE) who defines five levels from partial to
full automation. Level 1 ADAS features are considered
partial automation because they have control over
velocity and/or directional movement. Active Lane Assist
and Adaptive Cruise control are examples of Level 1
systems.
Level 2 systems are often enabled with combined Level
1 features, but it is not as simple as it sounds. Level 2
control uses additional sensors and software to properly
stay within the lane or properly spaced within traffic.
Level 2 (partial autonomy) is offered by a few OEMs today.
Level 2 systems are largely convenience/safety features
but still require that the driver to keep their hands on the
steering wheel even while in automation mode.
Level 3 systems are fully autonomous, at least within
a stretch of highway. Level 3 systems require a driver
at all times but that driver has the ability to engage
automation under the right conditions. While engaged,
the vehicle has the intelligence to maintain a reasonable
pace within its lane. The vehicle will adjust its speed,
change lanes, overtake slower vehicles and completely
stop if necessary. Some Level 2 systems will change
lanes if the driver switches on the turn signal.
There are no Level 3 enabled vehicles at this time
although many OEMs are targeting Level 3 by 2020 or
so. Level 3 automation is “conditional” automation.
What this means is that the vehicle will maintain full
control within a certain stretch of highway and under the
right conditions including the ability to overtake slower
vehicles, handle interchanges, and so forth.
Level 4 automation is a “driverless” vehicle operating in
certain areas such as private campuses or urban areas.
Level 4 vehicles are commercially available now but are
not certified for use on public roads unless they have
a state’s approval to do so, and accompanied by driver
ready take control if the systems fail.
Level 5 automation is full automation in all areas and
is door-to-door service for the most part. The timing of
Level 5 is difficult to predict because there is concern
over the ability of infrastructure to keep pace with
requirements. Level 4 automation is often confined to
limited areas with proper infrastructure but extending
full automation to all areas still presents a lot of
unsolved problems.
Digital America 2017 93
 THE FUTURE OF VEHICLE TECHNOLOGY

NEW VEHICLE
TECHNOLOGY
+12% 17 billon in revenue (+12%)
Source: CTA Market Research

Consumer Technology Association

According to CTA’s 19th Annual Consumer Technology Ownership and Market Potential Study, in-vehicle communications
and safety systems saw the largest percent increase in ownership among U.S. households. The rate of ownership
increased by six percent, from 39 percent in 2016 to 45 percent this year, and is tied with smartphones as the tech
category that saw the greatest gains. In-vehicle communications and safety systems include back-up cameras, rear view
cameras and navigation or hands-free calling devices. This data indicates there is still a need for after market installers.

Manish Mehrotra, director of digital business planning
and connected operations at Hyundai Motor America in
Fountain Valley, CA. “I’m a believer in all these things
converging, and rather quickly,” he says, speaking
of disparate car technologies including car-to-home
integration and ADAS.
Counting Journeys, Not Vehicles
Driverless is changing mobility and everything that is
happening contributes to make this possible, but “what
everybody is talking about this year was being prepared
last year,” says Dominique Bonte, managing director and
vice president at ABI Research in Brussels, Belgium.
Among the most significant developments in 2016 was
an attitudinal adjustment among automakers toward
embracing autonomy, ride sharing and mobility as a
service, Bonte says. “It was the year when they started
taking all this seriously,” he maintains. And next, he says,
they’ll “want to take control back” from companies such
as Uber and Lyft.
As fleets of self-driving vehicles deployed mainly in
urban areas multiply, the old business model of selling
automobiles will begin to disintegrate, he believes. So,
a small number of driverless cars will account for a
significant share of actual mobility in these places. Thus,
“I think we need to start thinking differently about
mobility,” he asserts. “It’s about the number of miles,
the number of journeys, not so much about how many
vehicles there are in a certain country.”
And the number of fully self-driving cars will indeed
be minuscule even many years from now. Bonte says only
about one percent of the U.S. and worldwide vehicle
population will be self-driving by 2030.
But a huge number of cars will be at least semi-
autonomous by then, forecasts Ptolemus Consulting
Group. In fact, adding together today’s “level 2” vehicles
equipped with ADAS features, semi-autonomous “level
3” vehicles expected to be on roads later this year, and
even more sophisticated “level 4” vehicles coming later,
more than half of all vehicles on the road by 2030 —
about 370 million — will offer some form of driverless
technology built in, says Thomas Hallauer, research and
marketing director at Ptolemus in London, UK.
Thirteen million of those will be level 4 vehicles, which
will debut within five years, Ptolemus expects. Further,
because cars with ADAS will outnumber those without, in
the U.S. alone 767,000 traffic accidents will be prevented
each year by the end of the next decade, Hallauer says.
Ptolemus details these forecasts in its Autonomous
Vehicle Global Study, which was released in March.

94 Digital America 2017

Safety is the Top Priority
To be sure, ADAS is already expanding rapidly amid
growing consumer acceptance. Automakers finally
started offering ADAS in mainstream vehicles as
standard features or low-cost options last year, notes Sam
Abuelsamid, senior research analyst at Navigant Research
in Detroit.
He refers to the 2018 Toyota Camry, which offers
ADAS standard on all trim levels. And he points to
Honda’s Odyssey minivan, whose ADAS package named
HondaSense costs just $1,000 or is standard, depending
on the model’s trim level.
Later this year and in 2018, Abuelsamid says, the trend
will accelerate when automakers launch vehicles with
level 3 self-driving functions — like Cadillac, which is
prepping SuperCruise, a driverless technology that works
only on certain types of highways.
Since infotainment, navigation and other in-vehicle
technologies that improved user experiences became
ubiquitous, consumers have grown most interested
in safety related car tech, says Joseph Vitale, global
automotive industry leader at professional services firm
CTA’s Vehicle
Technology
Division
CTA’s Vehicle Technology Division seeks to grow
consumer awareness of in-vehicle technology,
foster the expansion of the pool of qualified
technicians and engage the makers of innovative
technologies in the vehicle through advocacy and
promotional activity.
Key Focus
• Promote the adoption and endorsement of
the Mobile Electronics Certified Professional
(MECP) program among the aftermarket
industry, prospective technicians and
consumers.
• Showcase innovative aftermarket technologies
and solutions that stimulate consumer demand.
• Serve as a leading voice on safe driving and
vehicle-related legislative and regulatory
issues.
Deloitte LLP in Detroit. “And not only is it what they
want and desire, it’s also what they are willing to pay
for,” Vitale says, citing Deloitte’s Global Automotive
Consumer Study, conducted in the second half of 2016.
In turn, automakers learned that if they don’t make
available the latest accident prevention technology, “their
ability to sell vehicles diminishes,” he adds.
Vitale says Deloitte’s study shows many consumers
don’t believe driverless cars are safe. Nevertheless, he
expects perceptions to change over the next two to three
years “as the technology becomes more prevalent and
there’s more testing done” and ad campaigns address the
benefits of driverless capabilities.
At least one automaker — Volvo — is intent on
skipping past level 3 autonomy completely, and not
jumping into the self-driving car market until it’s ready
to sell a level 4 or level 5 vehicle. “The one thing that we
can’t control in safety is the person behind the wheel,”
says Art Battaglia, manager of lifecycle, business and
brand strategy at Volvo Car USA in Rockleigh, NJ. “A
lot of brands are going to do level 3, but we’re not,
because we think it’s a compromise. It gives a little bit of
control to the customer, but we’re afraid the customer
will become complacent and really think the car is going
to take care of everything for them. We want to hold off
until we’re really confident that the car can do it.”
Consumers’ interest in safety aside, limited exposure
to level 1 and level 2 self-driving cars means their
comprehension of self-driving cars is far from uniform,
says Steve Koenig, senior director of market research
at CTA. “From now until 2020 will be a key period for
consumers to get experience with different driver assist
technologies that render some level of automation,”
he says. In three years he anticipates “the consumer
perspective will be much different and much more
positive.”
The only perennial certainty is uncertainty. “One
thing is for sure. The automotive industry is changing
rapidly,” proclaimed Lex Kerssemakers, president and
CEO of Volvo Cars of North America, on the occasion
of Volvo’s 90th anniversary celebration at the New York
International Auto Show in April. “Nobody knows what
the situation will be when we are celebrating 100.”
Acronyms
ADAS Advanced Driver Assistance Systems
AI Artificial Intelligence
CASE Connectivity, Autonomy, Shared Mobility and
Electrification
ECU Electronic Control Unit
MECP Mobile Electronics Certified Professional
SAE Society of Automotive Engineers
Digital America 2017 95
96 Digital America 2017
 VIDEO
Top Trends
•  V shipments edged up to 40.8 million units in
T
2016, and will remain nearly flat in 2017
•  TA forecasts 4K UHD TV sets that are HDR
C
capable will represent one fifth of 4K UHD TV set
sales
•  K UHD OLED, and quantum dot-enabled UHD LED
4
LCD TVs take the picture higher
•  ew HDR 4K HDTVs widen the range between the
N
brightest highlights and the deepest blacks
PIOVESEMPRE

•  HD Blu-ray players bring wide color gamut and

U
HDR enhancements that exceed streaming quality
•  roadband delivery brings UHD content with HDR
B
and a wide color gamut to TVs

Digital America 2017 97

 VIDEO
A
dvances in mobile device technologies along with
more efficient methods for streaming over the in-
ternet video content are gnawing away at the video
dominance of home-based television sets. Many viewers
have gravitated to smartphones, tablets and notebook
PCs to watch video entertainment.
Despite this trend, 2016 saw big-screen TVs rebound
as U.S. unit volume shipments of LCD-based sets, alone,
grew nearly two percent to more than 40 million, while
factory dollar revenue dipped three percent to $18.3
billion through price declines. CTA expects shipments of
LCD-based sets to dip slightly in 2017, falling below the
40 million unit mark.
In 2016, CTA estimated sales of 4K UHD TVs in-
creased 40 percent to 10 million units sold, while factory
dollar volume rose more than $3 billion to an estimated
$10.6 billion, fueled by increased demand for better-per-
forming models. About 64 percent of 4K UHD TVs could
accept and read HDR metadata this year, per CTA.
The HDTV has been the central display device for
two decades but is being replaced by 4K UHD TVs that
quadruple the pixel count of Full HD 1080p and deliver
a range of contrast with high dynamic range (HDR). It
has also broadened the visible colors in a color gamut
approaching the Society of Motion Pictures & Television
Engineers (SMPTE) Rec. 2020 color space standard,
which can be offered as a near-term attainable holy grail
for the development of 4K UHD TV sets. New classes of
HDR 4K HDTVs and content widen the range between
the brightest highlights and the deepest blacks in a scene.
Televisions that are HDR-capable also reproduce details
within the darkest and brightest parts of a scene that were
previously unavailable in a consumer display.
TELEVISIONS
+51%
98 Digital America 2017
For 2017, the association expects 4K UHD TV sets
that are HDR capable will represent about 69 percent
of 4K UHD TV set sales, as the 4K market enjoys 50.8
percent unit volume growth to 15.8 million units.
Flat-panel display technologies comprised of LED-
back-lit LCD TVs and a small but growing mix of
Organic Light Emitting Diode (OLED) TV sets repre-
sent most of the displays sold today. Long-time favorite
technologies including cathode ray tubes, rear-projection
TVs and plasma displays are virtually extinct, and front
projectors represent a small sliver of displays sold as con-
sumer entertainment devices. The new OLED technology
brings better contrast and brightness levels, lower power
consumption, thinner (and flatter) form factors and 4K
UHD resolution.
Meanwhile, the content industries feed the growing
popularity of 4K UHD TVs by supplying movies and
television programs delivering both 4K UHD resolution
and contrast and color enhancements through HDR. This
includes delivery through over-the-top (OTT) movies and
TV programs streamed over broadband internet connec-
tions as well as on next-generation optical discs.
The first 4K UHD Blu-ray Discs and players launched
in 2016 that deliver wide color gamut and HDR enhance-
ments at performance levels exceeding streaming services.
The players also support new advances in 3D home
surround sound and high-resolution audio music.
Meanwhile, work continues on the country’s next
over-the-air (OTA) broadcast TV platform, called ATSC
3.0, to be finalized in 2017. Once completed, the system
will voluntarily roll out on a market-by-market basis. Al-
though broadcasters are afforded a flexible platform with
multiple voluntary options, ATSC 3.0 will deliver the first
4K Ultra HD:
15.6 millon units (+51%)
$14.6 billion in renenue (+38%)
Total Digital Displays:
40 million units (-2%) $19 billion (0%)
Source: CTA Market Research
Consumer Technology Association
OTA 4K UHD broadcasts with object-based surround
sound and new levels of interconnectivity to move the
TV watching experience beyond the living room and into
mobile devices and future platforms.
Digital Television – from HD to HDR
• Big-screen AMOLED sets drop the curve
• 4K UHD LCD TVs dominate the big screen market
• Connected TVs account for one in two TV purchases
Digital television (DTV) is an umbrella term given to
a class of television sets equipped to receive and dis-
play OTA broadcast signals delivered in binary form to
produce images with more than twice the resolution of
former analog sets. When first introduced, the digital TV
ecosystem offered high-definition as the benchmark for
picture resolution, but now new technology for 4K UHD
has expanded that clarity by a factor of four.
CTA defines a DTV display as a television set (regard-
less of resolution capability) with an integrated digital
ATSC tuner, or a television monitor capable of presenting
a picture with at least 480 progressively scanned active
vertical lines (480p). Today, the lowest resolution offered
in a television is 720p (1280 x 720 progressively dis-
played lines of resolution). The best sets offer 4K UHD
(3840 x 2160 progressively displayed lines of resolution).
4K UHD TVs were first unveiled at CES 2012, bringing
the promise of a huge boost in resolution performance
North America 40”+ share of
shipments by resolution
100
90
80
Unit Share of Shipments
70
60
50
40
30
20
10
0
2013 2014
HD  5.3%  2.6%
1080p 94.3 91.2
4K 0.4 6.2
Source: IHS Market
over the then Full HD 1080p benchmark. The first editions
offered impressive pictures, but they had a tough road
to market acceptance. First, much of the detail promised
by early 4K UHD models was lost on typical screen sizes
viewed at normal seating distances. The launch also lacked
a depth of native 4K UHD content, requiring audiences to
watch mostly up-scaled existing standard and high-defini-
tion programming. Today, the story is different. 4K UHD
TVs have become the de facto standard for premium home
theater with all brands offering models.
In 2017, most televisions sold with screen sizes mea-
suring 55-inches and larger have 4K UHD screens with
3840 x 2160 pixels and high dynamic range (HDR), de-
livering luminance and black level highlights that are far
more noticeable and more important improvements than
resolution alone. Among the benefits of HDR are specular
highlight details in bright objects, the additional shadow
detail in dark areas of the picture, and the wider digital
cinema or P3 color gamut.
As prices for 4K UHD TVs have decreased, U.S.
consumers bought more than 10 million 4K LCD TVs
in 2016 alone, according to CTA. For 2017, sales are
expected to reach 16 million 4K TVs, causing cumulative
sales to reach roughly 35 million units. In 2017 CTA
expects 40 percent of all unit sales to dealers to be 4K
UHD models.
As for native 4K UHD content, increasing mov-
ies and television programs are being produced in 4K
2015 2016 2017
 .6%  0.0%  0.0%
74.7 57.3 44.3
24.7 42.7 55.7
Digital America 2017 99
 VIDEO

Flat-Panel TV Unit Shipments by Size - North America (000’s)

Region Size 2013 2014 2015 2016e 2017f
North America 10-19"  1,231 946 822 767  464
20-24" 3,202 2,695 2,833  2,631  2,127
25-29" 1,908 1,453 1,120 12,670  9,705
30-39" 15,637 13,844 12,641 12,322  8,472
40-49" 7,946 11,130 12,583 14,190 12,757
 50"+ 10,828 13,402 13,052 15,261 17,626
Total 40,750 43,471 43,051 43,652 42,680

Source: IHS Q4’16 TV Sets Intelligence Service

UHD resolution from a variety of distribution sources, sets, but in 2017 all U.S. based curved screen sets are LED
many of which now add HDR and a wider color gam- backlit or edge-lit LCD.
ut to make 4K content pop even when viewed across a In 2016, U.S. DTV unit sales of all sizes and resolution
room. Content is coming from major OTA streaming levels rose two percent to roughly 41 million, according
video services and pay TV services like Amazon Prime, to CTA. However, a slowing demand for big screens,
DirecTV, Hulu, Netflix and Vudu. increased HD and 4K TV saturation, and growing interest
In 2016, the next generation of the Blu-ray Disc format in viewing video on mobile devices led to 4K UHD TVs
arrived in the form of UHD Blu-ray, bringing the highest performing slightly below expectations with factory reve-
quality of 4K UHD delivery to date. The collection of nue up 31 percent to $10 billion for the category in 2016,
UHD Blu-ray Discs has already reached nearly 140 titles and television revenue fell two percent to $19.1 billion,
and is growing in 2017, with studios expecting to release says CTA. UHD TV factory revenue is expected to climb
at least 250 movies and titles in 2017. 38 percent in 2017 to $13.8 billion.
OTA broadcast television stations operate using the Dollar volume of U.S. flat-panel TVs dropped 2.6 per-
Advanced Television Systems Committee (ATSC) initial cent to $18.7 billion in 2016 and will climb 2.1 percent
platform for digital television broadcasting, called ATSC to $18.73 billion in 2017, according to CTA. The average
1, which is not designed for signals as large as 4K UHD selling price of an LCD TV declined 4.4 percent in 2016
TV, or even Full HD 1080p (the previous benchmark in to $457 from $478 in 2015, says CTA. That number is
television design). The ATSC 1 system covers high-defini- expected to remain flat in 2017. For the second year in
tion resolution images of up to 720p or 1080i. a row, the assortment of differentiated HD and Full HD
models dissipated significantly in 2016, with most of the
Flat-panel TVs dominate: Today almost every television better features and performance attributes moving into
set uses some form of flat-panel display technology. These 4K UHD products, as manufacturers continued shifting
sets are made from glass screen-based on liquid crystal production of step-up televisions to 4K UHD.
display (LCD) or organic light-emitting diode (OLED) Shipments of 4K UHD TVs rose 43.5 percent in 2016,
technologies. In 2013, the first curved screen TVs arrived reaching 10.49 million units in North America, with
in the form of both LED-lit LCDs and new OLED TV forecasts to rise another 51 percent to 15.8 million units
in 2017, according to CTA. Much of
Flat-Panel TV Unit Shipments by Technology - North America (000’s) the success of 4K UHD sets is coming
at the expense of lower resolution
Region models. Full HD TV shipments are
North America Technology 2013 2014 2015 2016e 2017f now forecast by CTA to decline 12
LCD 38,615 42,492 42,969 43,472 42,400 percent in 2017 to 20.4 million units
after climbing three percent to 23.2
PDP 2,135 965 9 0 0 million units in 2016.
OLED 0 14 73 180 280 The growth in popularity of 4K
Total 40,750 43,471 43,051 43,652 42,680 UHD TVs and with them, larger
screen sizes are helping to advance
Source: IHS Q4’16 TV Sets Intelligence Service
profitability of the television category.

100 Digital America 2017

Per market research firm IHS’s Markit Quarterly TV Cost
& Price Forecast Model, the average combined brand
and retailer margins for a 40-inch 1080p LCD TV sold
in the U.S. was 10 percent in the first quarter of 2017,
improving to between 34 and 41 percent on average for a
55-inch 4K LCD TV.
LCD TVs: Today’s LCD technology used in direct view
applications for televisions and PCs are usually identified
as active matrix, thin film transistor (TFT) or dual
scan displays. LCD TVs slated for market in 2017 are
offered in screen sizes from 9-inches to 120-inches.
Today, virtually all LCD TVs use LED backlighting and
are sometimes referred to as LED TVs for that reason.
However, that terminology might become problematic
going forward as manufacturers have begun working
with new micro-LED technologies that could soon
emerge in displays for the consumer television market.
The IHS estimates North American LCD TV factory
unit shipments rose 1.8 percent to 43.5 million units in
2016. Unit shipments in North America of LCD TVs are
forecast to decline 2.4 percent to 42.4 million as OLED
TV models advance.
Ultra High-Definition heads to mainstream: Ultra High-
Definition is a video format first conceptualized by the
Japanese public broadcasting network, NHK. On Oct.
17, 2012, CTA declared Ultra High-Definition (or UHD)
the official terminology for any display with a 16:9 aspect
ratio with at least one digital input capable of carrying a
minimum resolution of 3,840 x 2,160 pixels, roughly four
times the resolution of Full HD 1080p. UHD resolution is
the equivalent to 8.3 megapixels, roughly four times the
number of pixels in Full HD format (1080p).
In 2014, CTA expanded the core characteristics for
Ultra High-Definition (UHD) TVs, monitors and pro-
jectors for the home. These expanded display character-
istics (CTA’s Ultra High-Definition Display Character-
istics V2) offer voluntary guidelines to address various
attributes of picture quality and help move toward
interoperability, while offering greater clarity. Under
the new characteristics, a TV, monitor or projector may
be referred to as Ultra High-Definition if it meets the
following minimum performance attributes:
• Has at least eight million active pixels, with at
least 3840 horizontally and at least 2160 vertically.
• Has a width to height aspect ratio of the display’s
native resolution of 16:9 or wider.
• Can upscale HD video and display it at Ultra
High-Definition resolution.
• Has one or more HDMI inputs supporting at least
3840 x 2160 native content resolution at 24p, 30p
and 60p frames per second. At least one of the
3840 x 2160 HDMI inputs must support HDCP
revision 2.2 content protection or its equivalent.
• Processes 2160p video inputs encoded according to
ITU-R BT.709 color space or wider.
• Has a minimum color bit depth of eight bits.
CTA also addressed terminology for connected UHD
TVs that will deliver some of the first native 4K content
via internet streaming, A “Connected Ultra High-Defi-
nition” display must meet all the previous requirements
and the following minimum performance attributes:
• Decodes IP-delivered video of 3840 x 2160 reso-
lution that has been compressed using HEVC and
may decode video from other standard encoders.
• Receives and reproduces, and/or outputs multi-
channel audio.
• Receives IP-delivered UHD video through a Wi-Fi,
Ethernet or other appropriate connection.
• Supports IP-delivered UHD video through services
or applications on the platform of the manufactur-
er’s choosing.
• The first generation of flat-panel UHD TVs hit re-
tail floors in October 2012, following the introduc-
tion a year earlier of the first UHD projectors (See
Home Theater Section.)
AMOLED TV arrives: Not since the introduction of the
first flat-panel TVs has a display technology captured
the imaginations of video enthusiasts quite like Active
Matrix Organic Light-Emitting Diode (AMOLED or
OLED) flat-panels. These displays, which use organically
produced substances to produce light, are highly efficient,
enable ultra-thin designs, produce superior levels of
color saturation and contrast to either LCDs or plasma
sets, and will soon yield flexible screens. The technology
uses electroluminescent organic materials sandwiched
between two glass substrates. An OLED panel’s emissive
electroluminescent layer is composed of a film of organic
compounds and a polymer substance. The organic
compounds are deposited in rows and columns onto a flat
carrier using a printing process.
OLEDs of various colors have been developed with
sufficient efficiency using fluorescent and phosphorescent
materials for the commercialization of not only OLED
TV panels, but also to generate white light for general
lighting, backlight for LED displays, and other display
applications. To create white light the organic materials
of primary colors (red, green, and blue, or alternatively
blue and yellow) have to be excited simultaneously. Color
stability issues may arise if more than one organic com-
pound is excited at the improper level.
LG is working to bring down the price premium for
its OLED TVs. In 2013, LG introduced the first 55-inch
Digital America 2017 101
 VIDEO
curved-screen Full HD OLED TV to the U.S. market,
ringing in at $14,999. By the 2016 holiday, a similarly
capable OLED set was selling for below the $2,000 mark.
However, LG said it will no longer sell Full HD OLED
TVs in 2017, as the price declines moved to similarly
sized entry level 4K UHD OLED models.
At CES 2017, Sony announced it was entering the
4K UHD OLED market in the U.S. Currently, all large-
screen OLED sets in the U.S. market are based on LG’s
white OLED (WOLED) technology. This technology uses
a set of four sub-pixels, three of which use color filters
to produce desired red, green and blue shades while one
sub-pixel produces white light without a filter. The four
sub-pixels combine to create a single pixel on the screen.
Display market analyst IHS said factory shipment
volume of LG’s OLED displays in North America reached
180,000 units in 2016. In 2017, with the entry of Sony in
the category, OLED sales are forecast to rise 55 percent to
280,000 units.
Due to its many benefits, including strong picture
performance, ultra-thin panels and good power efficien-
cy, CTA believes OLED TVs will eventually unseat LCD
as the display technology of choice among U.S. consum-
ers. Near-term, CTA forecasts OLED TV volume quietly
rising to pass the two million unit mark by 2020.
Is 8K TV on the way?: In development for eventual home
and commercial use is 8K UHD (4320p), which produces
7,680 x 4,320 pixel resolution (33.2 megapixels) – roughly
16 times the pixel resolution of Full HD (1080p). For
the past several years leading TV manufacturers have
shown 8K prototype flat-panel displays that one day may
be introduced into the mainstream market, but in the
meantime, marketing efforts are focused on 4K UHD.
HDR and Wide Color Gamut Push 4K: 4K UHD TV
manufacturers are improving the picture quality standards
offered by the new resolution level. Many next-generation
displays presented at CES 2017 boosted the higher
resolution benefits of 4K UHD with the addition of deeper
and richer picture highlights and contrast performance
from high dynamic range (HDR), wide color gamut
capability and higher frame rates. These technical advances
will further enhance the 4K UHD viewing experience
and deliver the image quality intended by the content
producers. In 2016, representatives from both hardware
and content production industries belonging to the UHD
TV Alliance revealed basic specifications for its definition
of an UHD Premium TV.
To receive an UHD Premium license and use a cor-
responding logo on qualifying TVs, the display must
conform to one of two sets of contrast ranges including:
image resolution of 3840 x 2160; 10-bit color depth; and
the ability to handle a BT.2020 color gamut and map it
102 Digital America 2017
for display of more than 90 percent of the Digital Cinema
Initiative P3 color standard.
For High Dynamic Range playback, an “UHD Premi-
um TV” must support the SMPTE ST2084 EOTF (elec-
trical optical transfer function – the way a screen turns
digital data into visible light) and achieve one of two
combinations of peak brightness and black level depth.
Either more than 1,000 nits of peak brightness and less
than 0.05 nits of black level, or more than 540 nits peak
brightness and less than 0.0005 nits black level.
The two different provisions for brightness and black
levels were added so that both LED LCD TVs and OLED
TVs can be classified as supporting high dynamic range.
The optimal light range for OLED displays supports 540
nits brightness/0.0005 nits black level, where LED LCD
TVs excel at brightness levels up to 1,000 nits/0.05 nits of
black level.
The UHD Alliance also issued standards for the distri-
bution of content and content mastering, which stipulates
material should be made and delivered with 3840 x 2160
resolution; have a minimum 10-bit signal; BT.2020 color
representation and using the SMPTE ST2084 EOTF HDR
system.
The UHD Alliance also recommends mastering display
specifications for HDR content including: a minimum of
100 percent of the P3 color standard; a peak brightness of
more than 1,000 nits; and a black level depth of less than
0.03 nits.
CTA defines HDR displays: In addition to the specs and
definitions presented by the UHD Alliance for premium
TVs, CTA helped the industry determine the definition
of an HDR display. According to CTA guidelines a
TV, monitor or projector may be referred to as a High
Dynamic Range (HDR) Compatible Display if it meets
the following minimum attributes:
• Includes at least one interface that supports HDR
signaling as defined in CTA-861-F, as extended by
CTA-861.3.
• Receives and processes static HDR metadata compli-
ant with CTA-861.3 for uncompressed video.
• Receives and processes HDR10 Media Profile from
IP, HDMI or other video delivery sources. Other
media profiles also may be supported.
• Applies an appropriate Electro-Optical Transfer
Function (EOTF), before rendering the image. An
EOTF is a method of transferring digital code into
visible light.
Displays move beyond the living room: A new trend
in television usage is to move television viewing outside
the traditional family room to various consumer and
commercial placements. These include: backyards, floors,
gas pumps or subway walls. On the commercial side,
video displays capture consumer attention for advertising
and the display of critical service information. Well-heeled
consumers even weatherproof their plasma and VCD TVs
or portable projectors to place outdoors for extravagant
entertainment options. In some cases, children have helped
drive the market for backyard movie equipment as parents
enjoy the practice of watching family movies under the stars.
U.S. connects with connected TVs: The internet had
disrupted the traditional paradigms associated with
television design, broadcasting and usage, particularly
with smart TVs. Simply put, smart TVs are television sets
equipped to connect to the internet over a wired or wireless
in-home network to do everything from stream movies and
music to converse with friends and family over chatrooms,
instant messages and social networks. Since their arrival
with limited capabilities and services, smart TVs have
blossomed to nearly 74 percent of U.S. broadband
households, according to The Diffusion Group (TDG).
Connected TV penetration grew 22 percent from
2013-2014 and another 15 percent from 2014-2015.
Meanwhile, the NPD Group predicted that 80 percent
of internet-enabled TV sets and streaming media players
will connect to the internet by 2019, up from 70 percent
in 2015. According to IHS market research, by 2019
more than 50 percent of TV households in the U.S. will
have smart TVs. Smart TV household penetration will
reach at 57 percent by 2019, IHS said. Gap Intelligence
said 86 percent of all U.S. TVs shipped in 2016 included
some form of built-in internet connectivity.
The most common solution to smart TV connectivity
in 2016 was using a TV with a built-in operating system
designed to install and play apps to various streaming
services that send on-demand video and music pro-
gramming to the set under a variety of business models.
Another approach growing in popularity is the use of so-
called digital media adapters (DMA) that connect to a
TV’s HDMI input to provide a connection to an in-home
Wi-Fi network and deliver a host of pre-selected over-
the-top (OTT) streaming entertainment services, without
any special connectivity capabilities in the TV itself.
Second screen entertainment evolves: Another way
many consumers are experiencing Web-enabled content
for HDTV is through a second screen using a portable
connected device, like a smartphone or tablet. Second
screen allows a television audience to interact with
the content they are watching on a larger TV set and
the audience watching along with them. Extra data is
displayed on a portable device synchronized with the
content being viewed on television.
AI comes to the television set: One of the biggest
trends among consumer technologies in 2016 was the
emergence of artificial intelligence (AI) through voice
assistants that allow consumers to interface with the
Web and devices built for the Internet of Things using
spoken commands. The two largest competitors in this
space in 2016 were Amazon Echo devices powered by
the Alexa voice assistant, and Google Home, offering a
similar Google voice assistant.
Gartner estimates that by 2018, 30 percent of all
interactions with devices will be voice-based, because
people can speak up to four times faster than they type.
In 2017, the first televisions will arrive with the ability to
link to these devices or will build the platform into the TVs
themselves to take verbal commands to perform a range of
functions. These include anything from basic operation of
the TV and connected home theater equipment to the ability
to reach out to operate compatible home automation devic-
es, like networked lighting and home appliances.
Internet of Things hits television: Making possible
these new voice assistants like Amazon Alexa, Apple’s
Siri and Google Home is the bigger concept introduced
several years earlier, called the Internet of Things, where
manufacturers and service providers collaborated to
connect multiple devices in and outside the home to
perform a limitless range of functions using the internet.
Advocates say this new method for delivery of service
shifts the business value from the disparate products to
the experiences they enable.
Although the concept of IoT is far broader than a
network of devices in the home, ranging to connected
cars and even connected cities, the movement is delivering
many opportunities to video enthusiasts through the abili-
ty to access content stored on one device through another
device in the connected chain. This includes accessing
OTT streaming video services that can be called up and
streamed on one device and shared by multiple screens in
the home, for example.
Digital America 2017 103
 VIDEO
The number of connected devices is quickly growing
into the billions. Companies including LG, Samsung and
Sony have introduced smart TVs with a single user inter-
face to control multiple brands and categories of smart
home devices based on IoT technologies. These include
security cameras, smart thermostats, major appliances,
lawn sprinklers and other devices giving the TV another
role as a central hub in house.
Over-the-Air Broadcast Television
• ATSC 3.0 standard nears completion
• FCC Chairman looks for swift transition
• Industry embraces voluntary implementation
Although the broadcast system completed its full transition
from analog NTSC to ATSC 1.0 digital television less than
eight years ago, the country is moving progressively forward
toward the implementation of an all-new updated platform
that will support new technologies that have emerged. It will
also be forward updatable so that future developments can
be implemented without a wholesale system changeout.
ATSC 3.0 to be future ready: The ATSC is working on an
update to the original digital ATSC television broadcast
standard that will blend broadcast TV with the internet.
The standard also will allow for in-home and in-transit
viewing of broadcast content on not only television
sets but also mobile devices like tablets. Work on an
ATSC 3.0 system has been underway for more than five
years, and is expected to deliver advanced transmission
and video/audio coding techniques to bring new and
creative services to viewers. ATSC 3.0 will enable OTA
services such as 4K and HDR, immersive audio and
targeted advertising, mobile TV and advanced emergency
alert systems with greater content and more localized
information.
At the heart of the next-generation ATSC 3.0 DTV
broadcast system will be the opportunity for terrestrial
broadcasters to send hybrid content services to fixed and
mobile receivers seamlessly—combining both over-the-air
transmission and broadband delivery. Options for “mul-
tiview” and “multiscreen” will be important in addition
to the option of choosing among standard definition, HD
and 4K UHD resolution levels.
New FCC focused on ATSC 3.0 advancement: Just
days after being named the new FCC chairman, Ajit
Pai announced that he wants broadcasters to start
working on the implementation of ATSC 3.0. Pai
circulated a Notice of Proposed Rulemaking to the other
commissioners that would allow TV stations to start
rolling out the ATSC 3.0 advanced TV transmission
standard on a voluntary basis. Final authorization for
the new standard is now targeted by the end of 2017.
104 Digital America 2017
The new broadcast system is being designed to give
broadcasters flexibility in rolling out a wide range of
advanced services and features including improved
picture quality with 4K transmissions, accurate sound
localization and customizable sound mixes for more
immersive audio, advanced emergency alerts with
more information, enhanced personalization and
interactivity allowing higher-quality advertising relevant
to individual viewers, and the ability to watch over-the-air
programming on mobile devices.
The NPRM authorizes the voluntary use of ATSC 3.0
while requiring stations to continue to deliver an ATSC
1.0 version of their signals. It also proposes to require
multichannel video programming distributors to con-
tinue to carry the ATSC 1.0 signal but does not require
them to carry ATSC 3.0 during the transition to a new
standard. It asks questions about how the retransmission
consent regime – a mechanism by which broadcasters
could negotiate to receive compensation for the value
of their signals – might look and about interference
protections.
Since the standard is not compatible with current sets,
broadcasters have promised to simulcast their signals
during rollouts. The FCC has requested to allow a simul-
casting partnership in which two stations in a market
could share spectrum so that one station would deliver
the ATSC 1.0 versions for both of their primary sig-
nals and the other would deliver the ATSC 3.0 versions.
Possible tuner mandate draws concerns: Buried within
Pai’s NPRM was language that mentioned the possible
inclusion of a ATSC 3.0 tuner mandate for consumer
television devices. Gary Shapiro, CTA president and CEO,
immediately challenged the need for a tuner mandate
and requested that the FCC stick to market-driven and
voluntary adoption and implementation of ATSC 3.0
as supported by the agreement of the broadcast and
consumer technology industries.
ATSC 3.0 designed for flexibility: Because ATSC 3.0 will
be incompatible with current broadcast systems, it must
provide improvements in performance, functionality and
efficiency. ATSC 3.0 is comprised of a number of layers
including a physical layer at the core transmission system
that is focused on modulation and coding, emission
waveforms and other common system elements. A
primary goal of the ATSC 3.0 physical layer is to provide
TV service to both fixed and mobile devices. Key points
of the new system are spectrum efficiency and robust
service, along with increased data rates to support new
services including UHD.
ATSC 3.0 will allow the seamless use of broadcasting
combined with broadband to deliver services and compo-
nents of services. One example of this might be delivering
video and one audio language in broadcasts, with alter-
nate language audio streams delivered via broadband,
allowing viewers to select among a number of options.
The service model for ATSC 3.0 allows for more com-
plex services to help broadcasters evolve their business
models. This includes provisions for enhanced linear
TV, plus on-demand support; subscription and pay-per-
view (PPV) support; conditional access and digital rights
management (DRM) capabilities; mobile and fixed device,
plus companion device support; and hybrid delivery
(broadcast and broadband), combined with pushed
content.
For video coding, UHD and HD enhancements are
a key initial goal, with 4K support at the start and 8K
support possible later via extensibility. HEVC (H.265)
has been selected as the core video codec. Portable,
handheld, vehicular and fixed devices in both indoor and
outdoor settings are all targeted, and hybrid integration
of broadcast/broadband delivery is a required capability
for broadcasters.
For audio coding, new personalization features are
envisioned that include control of dialog, use of alter-
nate audio tracks and mixing of assistive audio services,
multiple languages, special commentary, and music and
effects. An enhanced immersive experience is envisioned,
with high spatial resolution in sound source localization
(in azimuth, elevation and distance), for an increased
sense of sound envelopment.
Connectivity Expands to Greet the Future
• HDMI offers legacy of backward-compatibility
• HDMI 2.1 triples bandwidth
• HDCP 2.2 safeguards digital content rights
One of the biggest bottlenecks to the adoption of a new
home entertainment system or format has been the inter-
face used to connect different devices together. A lack of a
digital interface hindered the advancement of HDTV for
the first several years, and stymied the arrival of HDR on
4K UHD TVs that had a connector that lacked the ability
to pass the required bandwidth.
To avoid these issues, multiple companies have come
together under various forums to develop new interface
connections large and smart enough to pass, in the newest
versions, up to 8K video and all the frame rates and
metadata that could possibly go with them. Using various
wired or wireless device communications protocols, view-
ers can watch and record AV entertainment in a central
home theater environment, and share that content with
TVs and other devices in disparate locations throughout
the house and even, in the case of smartphones and tab-
lets, outside the home as well.
Digital interfaces for DTV proliferate: Another
growing trend in DTV displays is the inclusion of one
or more digital interface connectors—typically either
a connector based on the IEEE-1394 standard (a.k.a.
iLink or FireWire), the Digital Visual Interface (DVI)
standard or its updated form called the High-Definition
Multimedia Interface (HDMI). Although all fully
integrated HDTV sets include an HDMI input, very few
offer bi-directional IEEE-1394 interfaces. For the IT
community, a rival to HDMI evolved through the VESA-
approved DisplayPort standard which can also address
many of the needs of 4K and 8K video transport. But
this connector remains used primarily by advanced
computers and data monitors supporting professionals
and industries with greater data needs and speeds than
most home entertainment products require.
HDMI becomes the consumer connector standard:
All digital televisions include at least one High-
Definition Multimedia Interface (HDMI) in place of or
alongside DVI interfaces. Final specifications for HDMI
were approved in 2002 by seven developing companies.
This enhanced form of the digital visual interface
(DVI) standard with HDCP is used between any audio/
video source, such as a set-top box, DVD player, or AV
receiver, and an audio or video monitor, such as a DTV.
HDMI supports standard, enhanced or high-definition
video, plus multichannel digital audio on a single cable.
The format transmits all ATSC HDTV standards and
supports eight-channel digital audio (at up to a 192kHz
sampling rate), with bandwidth to spare for future
enhancements. Among its many attributes is a reduced
connector size, which is easier to run through small
holes drilled for in-wall installations and component
racks.
HDMI specifications evolve to HDMI 2.1: As the demand
grows for 4K and eventually 8K content, new formats
of static and dynamic HDR, higher and higher frame
rates and the new ability to receive 4K programming on
mobile devices, the HDMI Forum is in the process of
assembling the HDMI 2.1 format. The format will be
backward-compatible with prior HDMI versions, but
for next-generation products the connector will provide
a tripling of the bandwidth of the prior HDMI 2.0, to
48 Gbps. The lane speed is raised from 6 Gbps to 12
Gbps; the encoding changes from 10B to 16B-18B, and
brings about an 11 percent improvement in efficiency.
The connector includes three twisted pairs and a clock
– which translates to four twisted pairs but sending
basically RGB or Y and Cb and Cr. HDMI 2.1 can be
run in inverted clock mode, which uses all four lanes
and is packetized – HDMI will also add support for
DSC 1.2 compression for everything higher than 8K
with 4:2:0 chroma sub sampling. This can triple the
bandwidth or increase the cable length.
Digital America 2017 105
 VIDEO
Additionally, HDMI 2.1 will be highly resilient to errors
because the link was designed with robust forward error
correction. In the 4K domain, HDMI 2.1 will handle
4K/120fps and video can carry HDR with frame-accurate
(aka Dynamic) HDR. As for forward compatibility with
HDMI 2.1 in current televisions and supporting products,
some forms of HDR, like Hybrid Log-Gamma (HLG) and
Dolby Vision might be possible without the need for the
new 48 Gbps cable. But if a 4K UHD TV available today
will support HDMI 2.1 signals in the future through a
firmware update will depend on the manufacturer and the
specific model in question.
The first HDMI 2.1-enabled devices are expected to
hit market in late 2017 with more widespread support in
products like television sets and set-top boxes expected in
2018 and beyond. It will effectively replace the HDMI 2.0a
version released in 2015 offering the ability to transmit
metadata for high dynamic range information in 4K UHD
signals to compatible TV displays.
HDCP 2.2 protection continues: One thing not expected
to change in HDMI 2.1 is the reliance on the HDCP 2.2
content management system. Introduced in February 2013,
HDCP 2.2 provided a copy protection system for 4K UHD
and higher resolution video sources shipped over HDMI
and other interfaces. HDCP 2.2 offered a completely
different link protection than earlier HDCP versions and
requires devices to carry native support for both HDCP v1
and HDCP v2 or the use of a dedicated converter device to
support both legacy and newer protected content.
106 Digital America 2017
Pay TV Fights to Keep the Cord
• Cord cutting threat continues as
TV providers scramble
• Big cable TV operators see gains as others decline
• Pay TV providers offer `skinny packages’
to thwart cord cutters
The pay TV industry continues to look for ways to stay
ahead of a growing desire among a segment of consum-
ers to reduce household expenses by “cutting the cord”
on pricey pay TV subscriptions in favor of streaming
content over the internet or viewing it for free via OTA
broadcasts.
Pay TV’s grip on consumer spending threatened:
Consumer spending on global home video entertainment
grew three percent to $251.5 billion in 2016 from the
previous year and is expected to grow to $280 billion by
2020, a 2016 study by Futuresource Consulting found.
Traditional pay TV accounted for 86 percent of global
video entertainment but subscription video on demand
(SVOD) is growing fast. Futuresource expects SVOD to
reach 236 million subscriptions at the end of 2016 and
to more than double to 485 million by 2020.
Meanwhile, data from SNL Kagan in 2016 showed
once-powerful cable networks starting to feel the pinch,
brought on in part by the cord-cutting revolution: ESPN
subscribers were down some 7.3 million from its 2010
peak, FX lost 3.1 million, USA lost 5.5 million and TBS
tumbled 6.5 million.
.SHOCK
Cable faces poor-service perception: In addition to
high monthly fees, Americans want cable TV providers to
improve customer service and meet the high standards set
by progressive internet TV players, a study conducted by
billing and CRM specialist Paywizard found. According
to the research Americans enjoy the next level of customer
service that over-the-top (OTT) streaming services like
Netflix and Amazon are providing through features
including quick and easy sign-up, lack of contracts, free
trials, instant account changes, transparent billing, and the
ability to leave and return at any time.
The study found a high level of frustration among
American consumers with the customer service they get
from cable providers that held a monopoly prior to internet
TV. Conversely, they praised internet TV providers for
being responsive, reachable and willing to accommodate
their customers’ needs. The top five attributes consumers
desire most from a pay TV provider are: contract-free
commitment; flat-rate pricing that is straightforward; easy
sign-in, accessibility across devices; and personalization
and recommendation functions that work.
Millennials lead cord cutting revolution: A study
conducted in 2016 by GfK MRI’s of American consumers
found 18-to-34-year olds, classified as “millennials,” are
very comfortable accessing video content through means
other than a cable, telco-TV or satellite TV service. Per the
findings: nearly one-third of millennials either have never
paid for a cable, satellite or fiber-optic TV service or have
cut the cord after initially subscribing to cable, nearly twice
the rate of baby boomers with cord-cutters or cord-nevers
placed at 16 percent. Meanwhile, GfK MRI found that
untethered millennials spend 65 percent of their viewing
time streaming content via a TV set or other device.
However, the same millennials who don’t want to pay
for cable may also find ways to not pay for the streaming
SVOD services they watch. An IBM Cloud Video survey
issued in 2016 showed almost half of millennials have
used another person’s password to access an online video
platform like Sling TV or Netflix, while 42 percent said
they shared their own personal password with a family
member.
Pay TV providers look to stem churn: For cable multi-
system operators (MSOs) as well as most traditional pay
TV providers, the new mantra is reduce churn. Multi-
system cable operators (MSOs) look for ways to keep
their subscriber base from slipping away to broadband
video entertainment challengers. Unlike over-the-air
broadcasters, however, these cable systems provide much
of the broadband internet service subscribers depend on to
view the new wave of OTT services. In addition, more than
120 HD networks are now available to cable operators. To
counter declining subscriber rates, pay TV companies have
employed ‘skinny’ low-cost bundles, improved technology
and instituted better customer retention programs.
Cord shavers get new options: Another trend, which
is sometimes referred to as “cord shaving,” reflects pay
TV subscribers opting for smaller pay TV bundles as
consumers spend more time streaming video via over-the-
top solutions like Netflix, Hulu or Amazon Instant Video,
for example. Pay TV providers aren’t necessarily losing
these customers, but the subscribers are reducing their
reliance on their cable and satellite television offerings as
they adopt streaming services. Some providers have begun
offering scaled down, or “skinny,” bundles at lower prices.
These packages start at about 20 to 40 mostly basic cable
TV channels and sports networks for fees beginning at
about $20 a month and appeal to millennials entering the
job market. This segment is used for watching internet
video on PCs and smartphones by those that can’t afford a
full-blown cable, telco or satellite TV subscription. In time,
it is believed they will upgrade their slim TV packages with
full cable or satellite TV tiers as their incomes increase and
their free time becomes more limited.
Comcast shows subscriber turn-around: Despite the
heavy cord-cutting hype, the nation’s largest cable multi-
system operator, Comcast, became the first major publicly
traded cable company to show positive video subscriber
growth for a full year in a decade. Comcast showed a
strong fourth quarter by adding 80,000 video subscribers
in the period for a total of 161,000 new subscriber
additions for the year.
Comcast launches “Stream”: Like DISH, Comcast went
after cord-cutters and subscribers to its internet broadband
service that weren’t also taking its traditional TV packages
by launching a new internet video service called “Stream.”
The service debuted in 2015 in Boston and Chicago.
Comcast’s Stream service costs $15 a month, and requires a
subscription to Comcast broadband service.
A similarly named app called Xfinity Stream was
launched in early 2017 to succeed the previous Xfinity
TV app bringing the ability to unify the customer’s access
to content that is authorized for viewing in the home and
out-of-home, along with other features of the MSO’s X1
video service on set-top boxes. The free mobile app allows
Comcast pay TV subscribers to obtain full access to the
in-home TV service, as well as access to more than 200 live
channels, the ability to access and program their DVRs,
and a VOD library of about 40,000 titles.
Comcast also plans to roll out a Stream TV package
nationally, though it will likely be rebranded to prevent
confusion with the new Xfinity Stream app. However,
customers who sign on for the package will use the Xfinity
Stream app to access their subscriptions.
Digital America 2017 107
 VIDEO
Comcast rolls out X1 initiative: Comcast continued to
roll out its X1 set-top box (STB) platform to new and
existing customers. X1 is Comcast’s VoD platform,
offering search and personalized recommendations
through Comcast’s cloud computing infrastructure. The
X1 STB had a penetration of 35 percent at the end of
Comcast’s fiscal first quarter with expectations for 50
percent by the end of 2016. Comcast expects its X1
penetration to be deeper in 2017, while significantly
reducing the churn rate. Meanwhile, about 42 percent
of Comcast’s subscribers are using its mobile TV
Everywhere apps on a monthly basis, up by 32 percent a
year earlier. These customers are viewing an average of
seven hours of content each month.
Comcast moves slowly to embrace 4K: For the past
two years, Comcast has said its Xfinity TV service would
add both 4K UHD channels and HDR, though little has
materialized to date. Thus far, the service offers a 4K
streaming VOD service exclusively on select Samsung 4K
TVs. Content includes mostly selections from the NBC
Universal catalog. The company has also promised Xi4 and
Xi5 (with HDR) boxes for the X1 cable platform.
Satellite TV today: With the introduction of small dish
systems powered by digital compression technologies,
called direct broadcast satellite (DBS) systems, the digital
direct-to-home (DTH) pay TV satellite industry arrived in
the mid-90s, building mass-market acceptance in record
time. Today the industry is represented by two primary
direct-to-home (DTH) satellite TV providers – DirecTV
and DISH. Both DBS services deliver more than 500
channels of sharp, clear SD, HD and limited 4K UHD
108 Digital America 2017
images and sound. Additionally, satellite providers now
deliver broadcasts with special 5.1-channel Dolby Digital
audio surround sound, comparable to that offered by Blu-
ray and DVD players, on both HDTV and some standard
definition TV channels.
The systems each require relatively small elliptical
dishes to collect digitally compressed signals. Both services
push subscriber registrations with promotional incentives,
involving free hardware, installation or various levels of
free programming for a limited period. Both systems offer
similar programming packages that comprise basic and
premium cable networks, pay-per-view movies, news,
weather and sports networks.
Satellite not immune to churn: Although from the
start of service the two satellite providers had been on
an upward trajectory in new subscriber generation,
competition and rising programming fees have presented
challenges similar to those experienced by cable and
telco TV operations. However, the two operations have
been on diverging paths in recent years, with DirecTV
continuing to add subscribers (at a slowing pace) as
DISH has seen subscriber declines. Today the two DBS
providers serve more than 34 million customers.
AT&T looks to the sky: Like cable operators, telco-TV
providers have found it challenging to grow pay TV
subscribers within the territories. AT&T, which operates
the U-verse telco-TV service, took the approach of buying
one of its largest competitors – direct-to-home satellite
TV service DirecTV – to bolster TV subscriber numbers.
AT&T lost about 27,000 net pay TV subs in the fourth
quarter of 2016 with 262,000 U-verse TV customers
leaving while it gained 235,000 DirecTV subs
during the period. AT&T ended 2016 with
21.01 million satellite TV customers and 4.25
million U-verse video subs. Meanwhile, it
also entered the live OTT streaming space by
launching DirecTV NOW in November 2016.
The streaming service won more than 200,000
paid net adds during its first month, which
helped AT&T to generate total video sub
growth for the year.
DirecTV Now offers alternative: DirecTV
Now offers platforms for smartphones,
tablets, TV streaming devices, and PCs.
Content is streamed over the internet with
no satellite dish or cable box required. The
service consists of four tiers of channel
bundles, but the deal the AT&T pushes is a
THREEDICUBE
limited-time promotion offering a package
of more than 100 channels for $35 per
month. That will eventually ramp up to
$60 after the introductory offer expires. DirecTV Now
includes many popular channels, but CBS, Showtime
and the NFL Sunday Ticket and the Red Zone channel
are missing from the lineup. The other broadcast
networks will only be available to customers in cities
where those networks have local stations. The service
lacks a DVR function, which is offered by rivals Sling
TV and PlayStation Vue.
DirecTV adds 4K UHD TV services: In 2014, DirecTV
launched its first programming in 4K UHD TV
resolution, initially via an internet download accessible
only through Samsung 4K UHD TVs. The company
later launched an additional satellite providing more
bandwidth that the service has used for 4K UHD
programming, among other things.
The satellite provider offers three channels including one
with a small selection of 4K UHD VOD movies. Another
channel has been used to present various live events in 4K,
including select Major League Baseball games and key Pro-
Am golf tournaments. The 4K service requires subscribers
to have a 4K UHD TV equipped to receive remote room
viewing (RVU) through its 4K-supporting Genie whole-
home DVR, without the need of a separate thin-client
device. It also offers an ancillary remote room receiver to
watch 4K channels on other televisions in the house.
DISH expands capability: Through acquisitions,
partnerships and its own in-house technical acumen,
DISH Network (rebranded simply “DISH” in 2012)
expanded its satellite TV services beyond the near-DVD
quality video it touted at launch. In recent years, DISH
has been building on the capabilities of a multi-room
networking system based on a central DVR/receiver/server
called “The Hopper.” This DVR-on-steroids distributes
programming to thin-client boxes called “Joeys” in
secondary rooms. The Hopper offers multiple terabytes of
hard drive space for massive DVR storage capability and
the ability to automatically record all national primetime
programming from local affiliates of the major networks.
An additional feature called “AutoHop” allows viewers
to “opt in” to the ability to have the DVR automatically
skip over recorded commercials during playback.
DISH also allows subscribers to view content on
iOS mobile devices (with plans to add Android devices
shortly). The capability called TV Everywhere, com-
bines a DVR with Slingbox technology and a DISH
remote access app. The Slingbox technology allows
relaying home video content to remote devices with
broadband connections.
The latest DISH Hopper 3 offers built-in access to
4K UHD programming at up to 60 fps using a new
more powerful chipset. The Hopper 3 incorporates 2
TBs of internal storage, capable of recording more than
500 hours of HD content. DISH said the Hopper 3 will
be the first DVR with USB 3.0 ports for high-speed
connections to external storage devices for expanded
archival capability. In addition, the universal search
feature in previous Hoppers has been expanded to
include scans for programming available on the Netflix
OTT subscription streaming service. It also includes
voice search as a standard feature.
DISH adds 4K UHD TV service: Dish began delivery of
4K UHD programming via a remote room STB called
the 4K Joey. The unit is designed to work with Hopper
Whole Home HD DVRs to provide 4K UHD content to
compatible TVs with HDMI 2.0/HDCP 2.2 connections.
In addition to providing 4K content the 4K Joeys support
side-by-side display of two programs, each in HD, using
picture-in-picture (PiP) capability.
DISH launches Sling TV: DISH, which has watched
subscribers to its satellite TV service continually slip from
quarter to quarter, launched Sling TV in the third quarter
of 2015, providing live cable TV service that allows
subscribers to see a collection of cable TV channels on
their TVs, computers or mobile devices. These are live
TV channels, just like those offered by a cable or satellite
TV service, except they’re delivered over the internet.
Although Sling TV is a subsidiary of satellite TV provider
DISH Network, the live over-the-top Sling TV service is an
entirely separate offering. Customers don’t need a long-
term subscription. As other competitors, like PlayStation
Vue and DirecTV Now enter the live OTT service space,
Sling TV is positioned to be the only OTT service that
provides consumers with the ability to mix and match
programming. The company doesn’t release subscriber
numbers, but industry analysts estimated Sling TV had
garnered nearly one million regular subscribers by the end
of 2016, although the core satellite service continues to
suffer churn. In 2016, Sling TV added a cloud-based DVR
feature, allowing viewers to record and playback favorite
programs, like a traditional hard-drive-based DVR.
Sony launches PlayStation Vue: In 2015, Sony launched
its own live IP streaming video service, as an alternative
to the traditional cable TV bundle. The PlayStation Vue
(or PS Vue) service was aimed at cord-cutters, cord-
nevers and video gamers, and was initially accessible as
a downloadable app on PlayStation 3 and PlayStation 4
video game consoles.
The service offered three service tiers, none of which
require a contract along with a cloud-based program
guide and DVR service. Each tier is comprised of a mix
of 85 key cable and broadcast channels per market.
Monthly programming tier fees run $49.99; $59.99 and
$69.99. Unlike the rival Sling TV service operated by
Digital America 2017 109
 VIDEO
DISH, PS Vue offers a selection of local broadcast channels
from CBS, Fox and NBC networks. In addition to live
TV channels, the service also included a large selection of
video-on-demand content, a “lookback” service for prior
episodes of some TV series, and the cloud DVR that lets
users record up to 500 individual programs, each available
for playback for up to 28 days.
Verizon maintains FiOS TV services: Verizon has been
working to expand its digital content and advertising
businesses through acquisitions to develop a more robust
streaming video solution.
Verizon launched an ad-supported Go90 service in
2015 that combines typical internet video content with
clips and full episodes of traditional television program-
ming. Verizon was also working on a complete IPTV
solution for traditionally broadcast television, using
a new set-top box that supports Wi-Fi and Bluetooth
connections, but not the standard connection used for
FiOS TV. With the support of content delivery network
Edgecast (acquired in 2013) and Intel’s OnCue Internet
TV system (acquired in 2014), Verizon was poised to shift
to an entirely IP-based delivery system. This would save
money on bandwidth, by having to send only one channel
to a household at a time instead of its typical firehose
of data. Verizon also introduced a way to purchase TV
channel packages via à la carte bundles. The new “cord
cutter” bundles were designed to help Verizon offer FiOS
subscribers a $59.99 base package on which they could
add extra content as they choose.
Hulu and YouTube plan to launch live OTT services: Over-
the-top streaming service giants YouTube and Hulu are
expected to launch their own live OTT streaming services
as alternatives to Sling TV, PlayStationVue and DirecTV
Now. Hulu has a market of 12 million subscribers to sell
into, while YouTube daily viewers counting in the hundreds
of millions, giving them substantial marketing power.
Home Source Devices Connect to the Internet
• Smart TVs and media adapters bring 4K streaming
convenience
• DVD and Blu-ray players sales in decline
• DVRs compete with recording in the cloud
Video source devices exploded on the scene in the 1970s,
with the first video cassette recorders (VCRs). The popular-
ity of the convenience of watching movies and televisions
programs at home at any time spiked a multi-billion-dollar
revolution, leading to the development of home theater
technologies and streaming video services. As technology
has evolved, the need for content recorded on physical
media has continued to fade, causing declining sales of
once-popular media player formats like DVDs and Blu-ray
Discs.
110 Digital America 2017
Still, physical media, particularly Blu-ray and new
UHD Blu-ray Discs (many of which include the ability
to access and stream OTT streaming apps themselves),
remain appreciated formats by audio and videophiles
demanding the best in picture and sound quality. In 2016,
the next stage of development arrived in the form of the
UHD Blu-ray, which delivers bit-rates of up to 100 Mbps
to carry resolution levels of 3840 x 2160 4K UHD, with
support for HDR, a wide color gamut and next-genera-
tion object-based surround sound, in addition to stan-
dards and quality levels enjoyed in earlier Blu-ray and
DVD media.
Although the unit volume numbers have greatly dimin-
ished in recent years, attractive price points and an abun-
dance of pre-recorded movie discs in consumers’ homes
continue to generate appeal for standard Blu-ray players
offering resolution levels of up to Full HD 1920 x 1080.
CTA forecasts factory unit shipments of Blu-ray players
to decline 15 percent in 2017 to 5.8 million, while sales of
component DVD players/recorders drop 12 percent to 5.6
million, as a lower player average unit price (just $35 in
2017) and cheaper discs continue to give the trusty DVD
staying power. Comparatively, the average factory selling
price for a Blu-ray player is forecasted to $83 in 2017.
UHD Blu-ray arrives: As for the new UHD Blu-ray
format, the first player hit the market in 2016. The
picture and sound quality performance of the new disc
players is superior to 4K streaming services because the
discs and players support over 100 Mbps peak bit rates,
well ahead of home-broadband bandwidth that, by many
estimates, averages only 12-15 Mbps.
UHD Blu-ray players are available in the U.S. market
from LG, Oppo, Panasonic, Philips, Samsung, Sony and
Microsoft Xbox One S. Initial players supported HDR10
metadata delivering images with the highest contrast
performance yet seen on consumer displays. In 2017, a
handful of new players will also bring support for the
alternative Dolby Vision HDR format. By the end of
2016, roughly 300,000 UHD Blu-ray players shipped,
per estimates from the Blu-ray Disc Association. (See the
home theater section.)
Digital media adapters bring streaming to the masses:
In recent years, the traditional set-top box has taken on
new dimensions with the releases of new streaming media
adapters (also called streaming media players) designed
to bring internet-streaming services to non-connected
television sets or to add additional streaming apps to
smart TVs with limited app libraries.
In 2016, more than 36 percent of U.S. broadband
households had at least one streaming media player, up
from 27 percent in 2015, per research from Parks Asso-
ciates. Device makers have successfully sold streaming
 media players to consumers by offering easy access to a
variety of content streams, as well as frequent updates
that add the latest innovation.
Among the leaders in streaming media players: Roku,
Amazon, Google Chromecast and Apple TV. Amazon has
benefited by promoting its Fire TV devices in conjunction
with the company’s Prime Video service as well as streams
from HBO, Showtime, and other premium offerings.
Many of the device providers also offer different form
factor options ranging from small STBs to USB thumb
drive-like streaming sticks that plug into an open HDMI
input on the back of a TV set. All configurations easily
connect a TV to an in-home wireless network to access a
range of over-the-top streaming video, music, and photo
options for the home TV screen.
The major players could soon see expanded compe-
tition as Rovi recently acquired DVR pioneer TiVo to
bring together two sizable entertainment-tech companies
with strong streaming technologies and expertise. Media
adapter models introduced in 2016 added the ability to
stream 4K UHD content from supporting OTT service
like Netflix, Amazon Instant Video, Vudu, UltraFlix and
others. Some added the ability to also support HDR with
support for either HDR10 metadata or Dolby Vision
(Vudu).
CTA estimates U.S. shipments of digital media players
grew two percent in 2016 to 15.3 million units. That is
expected to edge up one percent to 15.5 million in 2017
generating factory revenue of $954 million, down from
four percent from $1 billion in 2016.
Digital video recorders (DVRs) keep time shifting
alive: Beyond advancing the delivery of high-
MICHAL-ROJEK
performance pictures and sound, the consumer
electronics industry made it much more convenient
for consumers to watch and replay their favorite TV
programs through digital video recorders (DVRs) that
take the time-shifting practice first realized in VCRs to
new levels of quality and flexibility. Found in nearly half
of all U.S. households, the DVR is a STB equipped with
a large hard drive that records, stores and plays back
live programs broadcast over the air, via multichannel
TV services or over the internet. In some cases these
systems combine traditional TV watching with the
interactivity of the internet, and in most cases the set-top
recorder incorporates a continuously updated electronic
program guide list to help viewers find programs
and easily program their devices to record TV shows
of interest. In recent years, a popular trend among
multichannel video service providers was to rollout HD
DVRs tethered to small thin-client devices to distribute
live TV and recordings on the central DVR to up to
eight different rooms in the home. Today, the DVR is
being threatened by new cloud-based recording systems
that allow cable operators to avoid distributing storage
equipment in thousands of homes, as subscribers simply
record their shows on head-end based servers.
DVR sales decline: First introduced at the end of the 1990s,
the DVR offered consumers a new more robust method for
“time-shifting” than VCRs. Using on-screen program guides
linked to hard disk drives, consumers could find favorite
programs and set them to be recorded to be watched at
a more convenient time. Although standalone DVR sales
under performed original expectations, they were quickly
adopted once cable and satellite TV providers included
them in their set-top decoder boxes, which is where the
bulk of DVR adoption continues today. According to CTA
estimates, shipments of cable and satellite STBs are expected
to decline four percent to 27 million units in 2017, many of
them carrying DVR features.
As for standalone DVRs, Jimmy Schaeffler, principal
of the Carmel Research Group, forecast modest growth
Digital America 2017 111
 VIDEO
through 2017, spurred on by new cord-cutting solutions
designed to help viewers tuner and record free over-the-
air digital broadcasts in exchange for a modest monthly
fee for refreshed program guide information. As a part
of the total DVR market, the household penetration rate
of DVRs is expected to reach 84 percent by 2020, the
Carmel Group said.
DVR vs. cloud storage: The original concept of the DVR
was that content storage and playback was made to
and delivered from an in-home unit, which was owned
and controlled by and stored in the house of the end
user. The creation of remote storage centers by content
distributors has begun to quickly morph that ecosystem.
Thus, more consumer content storage is transferring to
large warehouses, with thousands of individually-assigned
remote storage DVR hard drives to remotely play back
viewers’ personal recording. This is rapidly displacing the
traditional home-based hard drive-equipped recorder box.
IP influence on DVRs: As over-the-top (OTT)/broadband/
streaming features cause more consumer content to
transition off of traditional pay TV delivery onto Internet
Protocol (IP), the demand for DVRs is expected to decline,
the Carmel Group predicts.
Camcorders and Cameras Continue Video
Collision
• Action cameras dominate camcorder segment
• 360-degree video cameras make virtual
reality happen
• 4K UHD video expands in digital cameras
Although one of the arguments used against adopting a 4K
UHD TV has been the lack of native 4K content, the con-
sumer technology industry has from the early stages offered
customers the ability to make their own recorded memories
in 4K to play on the latest and greatest televisions sets.
As the popularity of 4K UHD TVs grows, so has the 4K
UHD recording capability in consumer camcorders and,
even more so, better-featured still cameras like digital SLRs
and mirrorless compact cameras.
A large percentage of personal videos, including 4K
UHD in some models, are captured on smartphones and
tablets that have become the digital Swiss Army Knives
for communication and image-capturing functions. These
mobile devices have proven detrimental to sales of the
traditional camcorder category in recent years, but pockets
of opportunity remain in weather resistant take-anywhere
point-of-view (a.k.a. action video cameras) and 4K UHD
camcorders. The relatively new phenomenon of 360-degree
videography also is intriguing pro and novice video makers
interested in emerging virtual and augmented reality tech-
nologies.
112 Digital America 2017
The traditional camcorder has also morphed into a
feature set in traditional still cameras, as even professional
videographers have begun using high-end digital SLRs to
capture high-quality video files.
Despite this, even traditional consumer-level digital
cameras with advanced video features have continued to
experience significant declines in recent years. The category
is also facing the passing of the market peak (current U.S.
household penetration of digital cameras was 61 percent in
2016 – down from 80 percent in 2010 per CTA data).
The splintering of the traditional camcorder market
between lifestyle products like action camera models at
lower price points $233 and below, and 4K UHD pro-
sumer models on the high end (with prices above $1,000)
continued. Today, manufacturers looking to combat the
overwhelming popularity of smartphones and tablets are
adding super telephoto zoom lenses, and Wi-Fi capability
to some camcorder models. The later enables tethering to
a mobile device to instantly share video recordings from
remote locations.
Unit sales update: In 2016, the U.S. camcorder market is
estimated to have seen shipments of 484,000 units, down
38 percent from 2015, per CTA research. At the same
time, CTA estimates the action video camera segment
grew four percent to 2.5 million units. In 2017, CTA is
forecasting U.S. camcorder shipments to decline 29 percent
to 344,000 while U.S. shipments of action video cameras
grow 4.4 percent to 2.7 million units. Meanwhile, the new
360-degree camera category saw factory unit shipments
spike 486 percent to 129,000 in 2016, with forecasts for
215 percent growth in 2017 to 407,000 units.
Action camcorders go 360, 4K: Since moving in to replace
the now defunct pocket video camera segment, action or
point-of-view (POV) cams have captured the imaginations
of active young adults so effectively that they now
dominate the traditional camcorder business. The category
emerged on the scene about a decade ago with tiny water-
tight models from startup GoPro that enabled extreme
sports enthusiasts like surfers and skiers to mount video
cameras on their boards, bodies or vehicles to capture
thrilling high-speed POV shots from virtually any location
and perspective.
Manufacturers have added 4K UHD video resolution to
the action camera category, presenting a compelling new
avenue for native 4K content generation. At the same time,
the category is moving beyond the helmets and surfboards
of extreme sports enthusiasts and into the hands of average
consumers, adding capabilities such as video surveillance,
video logging and documentation. In addition, a new spin
on the design is so-called 360-degree video cameras, which
can be used like action cams to capture everything within
a 360-degree radius of the lens. These spherical videos can
be played back on special computer software and mobile
apps, or via virtual reality headwear, that allows the wearer
to view images that appear to surround the observer.
First consumer UHD camcorders arrive: In 2013, Sony
introduced the world to the first 4K UHD camcorder
priced for the prosumer market, and quickly followed that
up with the first under $2,000 consumer version for 2014.
In 2015, the company went for more compact size, offering
small 4K camcorders, including its first wearable 4K action
cam. Over the past year, other manufacturers have entered
the 4K camcorder game, while some camera makers,
including Sony, Samsung and Panasonic, have added 4K
UHD video capture to their DSLRs and mirrorless compact
system cameras.
Consumers Reach for the Cloud for Home En-
tertainment
• Consumer online video viewership still growing
• Multi-screen viewing generates second screen
interaction
• Streaming supports cord-cutting options
The growth of broadband internet usage in American homes
has opened a gateway to a wide range of entertainment
services for not only internet-connected smart TVs but
smartphones and tablets on the go. OTT video – or any
application, device or service that enables consumers to view
video from sources other than their traditional, pay TV sub-
scription – fueled by broadband internet carriage now serves
as a complement to traditional pay TV subscriptions.
Video streaming on services like Netflix, YouTube,
Amazon Instant Video, Hulu and Vudu are becoming new
“applications of choice” among mobile broadband users in
addition to services on next generation smart TV devices.
The momentum is challenging established multichannel vid-
eo service provider paradigms as legions of millennials are
leading the country in “cutting the cord” and viewing con-
tent over the air and on demand via the Web. The range of
TVs with smart TV connectivity will expand significantly in
2017 with many major TV and digital media adapter brands
growing their product selections with models equipped to
stream 4K UHD with HDR metadata to new advanced
television and video screens.
Although OTT viewing is often cited as the reason
people are cutting traditional pay TV cords, it showed it is
also susceptible to the dreaded churn. According to market
research firm Parks Associates’ OTT Video Market Tracker
Service, the churn rate for OTT video services is 19 percent
of U.S. broadband households, indicating roughly one in five
households have cancelled an OTT service over the course
of the year. The overall churn rate for OTT services has been
stable for the past year, with top services Netflix, Amazon,
and Hulu all reducing their churn rates.
At the end of 2015, 20 percent of U.S. broadband
households had cancelled at least one OTT video service in
the prior year. Parks said that households with OTT video
subscriptions increased their spending from an average of
$3.71 per month in 2012 to $7.95 in 2016. At the same
time, spending on physical media purchases and rentals de-
clined from an average of $15 per month to $8 per month
and spending on digital transactional video declined from
an average of $2.42 per month to $1.42 per month. The
study found that churn is lowest among the top three most
established services (Netflix, Amazon, and Hulu).
Live app viewing flourishes: The time users spent
consuming media in apps increased 38.5 percent, year-
over-year in 2015, per market research from Yahoo-owned
Flurry, which found that the average U.S. consumer now
spends 133 minutes per day watching video through
apps. This is over and above other mobile device activity,
including messaging, email, exchanging photos, using
maps, shopping, etc. A growing activity for video
streaming Flurry identified was “Communitainment,” or
communication for the sole purpose of entertainment,
which uses live streaming to entertain each other on
dedicated apps including live.ly, musical.ly and Houseparty.
Netflix advances streaming service paradigm: More
typically, internet video watching is done on major
OTT apps like Netflix. Fueled by key partnerships with
manufacturers, online video disc rental giant Netflix now
is one of the most successful distributors of streaming
video services in the world, offering video-on-demand,
supplanting its once primary direct-mail DVD rental
program. The company is one of the most prevalent
streaming movie services on connected TV devices, and
is part of the apps portfolio on hundreds of devices
from all major brands. The service is available through
set-top boxes, connected TVs and Blu-ray Disc players,
video game consoles, DVRs, smartphones and tablets.
Netflix added a record 7.05 million streaming members
in the fourth quarter of 2016 for a total of 93.8 million
members. Fueling the increase was a rapid rise in Netflix
memberships abroad. Netflix cited its original series
Marvel’s Luke Cage and The Crown as worldwide hits that
helped to draw international members. It plans to invest
more than $6 billion in content for 2017, up from $5
billion in 2016.
Netflix launched 4K UHD streaming via its popular
original series House of Cards in 2014, with the library
slowly and steadily growing since. For a $12 per month
subscription, Netflix provides a collection of 4K original
TV series and movies through smart TVs and 4K media
adapters from most brands. Content is ramping up this
year, as all the service’s original series are now shot in 4K,
and many now add HDR 10 and Dolby Vision metadata.
Digital America 2017 113
 VIDEO
Amazon builds Prime viewership: Since launching its
Unbox video-on-demand service in July 2008, Amazon
has caught the streaming services bug, constantly
expanding its library of movie and TV program titles,
and morphing its service into unique value bundles.
The Seattle-based e-commerce giant rolled out an
unlimited movie streaming service as a part of its
Amazon Prime membership, which also provides
free shipping on Amazon hard goods purchases. Like
Netflix, Amazon has gone international in its bid for
additional subscribers to its Prime Video service. In
2016, Morgan Stanley analyst Brian Nowak estimated
Amazon had 60 million Prime members worldwide, 41
million in the U.S. An expansion into new countries and
ongoing investment in Prime’s Instant Video benefits, in
particular, could boost its member count to 100 million
by the end of 2018.
In 2014, Amazon introduced a digital media adapter
called Fire TV, designed to provide access to OTT ser-
vices, of which Amazon Prime content is featured prom-
inently, and favorably positioned in a built-in search and
recommendation engine. Amazon has since boosted the
capability of the Fire TV set-top adapter to accept 4K
UHD streaming and HDR support, which the service is
delivering in a handful of movies and a number of orig-
inal products and series. Amazon was one of the first to
announce plans to support 4K content, which is includ-
ed in its $99 per year Prime Membership. In addition to
free titles available through Prime, select 4K/HDR titles
are available for rental or to purchase at average prices
of between $20 to $30.
Hulu sees subscriber drop off: Hulu, an OTT service
started by a joint venture of 21 Century Fox, Disney,
and Comcast, began as a free ad-supported streaming
video service accessible by computer users. It later
added a subscription-based version for smart TV users,
charging $8 per month for the regular service, and $12
for a commercial free option. The service started out
offering mostly previously aired television programs
from the participating broadcast networks but over time
began offering original content available only via the
app as well. Hulu cut its free, ad-supported streaming
service, which reduced the service’s membership rolls to
an estimated 12 million paying viewers at the end of the
year. Hulu is now offering titles in 4K UHD, including
original TV shows like The Path and Stephen King’s
time-travel thriller 11.22.63 — as well as the bulk of the
James Bond movie catalog. The 4K titles are available
to Hulu subscribers who have Microsoft’s Xbox One S
and Sony PlayStation 4 Pro consoles. Hulu requires a
minimum internet connection of 13 megabits per second
to stream 4K content to a display capable of supporting
3840 by 2160 resolution.
114 Digital America 2017
CTA’s Video
Division
CTA’s Video Division fosters the growth and
development of the video products sector of the
consumer technology industry.
Key Focus
• Conduct market research on consumer
sentiment of the personal video entertainment
technologies and content consumption trends.
• Drive awareness of 4K Ultra High-Definition,
High Dynamic Range and other next
generation television technologies among
industry and consumers.
• Work with stakeholders to ensure that
accessibility is properly balanced with the
need to preserve innovation and flexibility for
manufacturers.
Sony launches Ultra 4K movies and video: In 2016 Sony
launched a 4K video streaming service in the U.S., called
“Ultra,” delivering new and previous releases from Sony
Pictures and Sony-owned dramas to Sony Bravia TVs.
Sony is seeking to push availability of 4K UHD content
that customers can access to play on their new 4K UHD
TV models.
The service offers movies for purchase only, at an
average price of $30. The service is available on Sony 4K
UHD TVs running the Android TV system and on the
PlayStation 4 Pro console. Many titles available through
Ultra support HDR. The service is part of the UltraViolet
program offering free streaming versions of previously
purchased UHD Blu-rays Discs through the service. Sony
Pictures, the company’s motion picture arm, has been
shooting and upconverting movies in 4K for years giving
it a ready library of content that can be offered to view-
ers. The service will be delivered over fast internet connec-
tions thus avoiding having to go through pay TV service
providers. Sony said the 4K content will be delivered with
HDR information embedded in the stream. HDR allows
compatible TVs to display images with better blacks and
brighter whites.
M-GO becomes FandangoNOW: In 2016, online movie-
ticket service Fandango acquired M-GO, which had been
a joint venture VOD service between Technicolor and
DreamWorks offering thousands of video-on-demand
OTT top-line Hollywood movies, television programs
and other fare for streaming or download. Soon after,
Fandango rebranded M-GO as FandangoNOW, adding
a streaming video service in the company’s effort to
host the movie experience across the total life cycle of a
movie. In 2014, M-GO became the first OTT service to
launch a 4K UHD streaming and downloads. Content
is encoded in HEVC H.265. In 2015, the service began
offering UHD 4K video with high dynamic range (HDR).
The new FandangoNOW lists more than 30,000 movies
and TV shows requiring no subscription fees. Titles are
available for purchase or rental. Movies and TV shows
can be viewed on any device including mobile phones and
tablets. The service is available on TVs from Samsung,
LG, Toshiba, Vizio, TCL and others and through Roku
devices, iOS and Android apps, and online. The service
charges $7.99 to rent a 4K streaming title and sells
4K movie downloads at prices around $29.99 for new
releases and $19.99 for catalog titles.
UltraFlix brings 4K streaming: Nanotech Entertainment
provided some of the first OTT 4K UHD streaming
content with its UltraFlix service in 2015. In 2016, the
service provided more than 1,000 hours of Hollywood
movies, nature and sporting documentaries, TV series
and live concerts. In its first year it garnered more than
100,000 new users and reached one million in 2016.
UltraFlix has access to programming from studios like
Paramount, MGM, Millennium, Magnolia and Warner,
with additional studios expected to come on board.
UltraFlix has a library of 4K UHD streaming content
available for free-view, purchase or in 48-hour rental
windows running about $10. The service is available on
many of the leading 4K TV brands and UHD-ready media
adapters from such companies as Hisense, Samsung, Sony
and Vizio.
Vudu makes Walmart magic: Launched in 2007, and
acquired by Walmart in 2010, Vudu offers streaming
pay-per-view standard definition, HD, 4K UHD and 4K
UHD with Dolby Vision HDR video via apps installed
on connected TVs and streaming media adapters. Vudu
began offering 4K UHD video with Dolby Atmos
Surround Sound and Dolby Vision’s HDR technology
in 2015 for 4K TVs that can handle and output both
technologies. The service streams 4K UHD movies
and other programming with Dolby Atmos object-
based surround sound, and Dolby’s Dolby Vision HDR
technology for expanded contrast values.
The company plans to add HDR 10 support as well.
4K UHD movies are available to rent at about $10
and can be purchased for $25-$30. Vudu is part of the
UltraViolet program, which offers free digital copies of
movies for the purchase of select 4K UHD Blu-ray Discs.
In 2016 Vudu began supplementing its movie rental and
sales business by offering free, ad-supported access to
several thousand premium titles to boost revenue from
older content. The move put the premium ad-supported
VOD service up against AVOD players like Sony’s
Crackle, AdRise’s TubiTV and Yahoo View, which has a
licensing deal with Hulu to offer free shows, as well as the
free, ad-supported services from networks like ABC, CBS,
Fox and NBC.
The “Vudu Movies on Us” selections stream in 1080p
HD, with Dolby Digital sound available for some titles
can be watched on smart TVs, Blu-ray players, and con-
nected-TV devices including Roku, Chromecast and video
game consoles. Vudu also is accessible online and via iOS
and Android devices.

Acronyms
AI Artificial Intelligence
AMOLED Active Matrix Organic Light-
Emitting Diode
ATSC Advanced Television Systems
Committee
DBS Direct Broadcast Satellite
DMA Digital Media Adapter
DRM Digital Rights Management
DTH Direct-to-Home
DTV Digital Television
DVI Digital Video Interface
DVR Digital Video Recorder
EOTF Electrical Optical Transfer
Function
HDMI High-Definition Multimedia
Interface
HDR High Dynamic Range
HLG Hybrid Log-Gamma
IP Internet Protocol
LCD Liquid Crystal Display
MSO Multi-System Operator
OLED Organic Light-Emitting Diode
OTA Over-the-Air
OTT Over-the-Top
PiP Picture-in-Picture
POV Point-of-View
PPV Pay-Per-View
SMPTE Society of Motion Pictures &
Television Engineers
STB Set-Top Box
SVOD Subscription Video on Demand
TFT Thin-Film Transitor
UHD Ultra High-Definition
VCR Video Cassette Recorder
WOLED White Organic Light-Emitting
Diode

Digital America 2017 115

 WIRELESS

116 Digital America 2017

 WIRELESS
Top Trends
• Smartphones mature
• Wireless fuels wearables, AR and VR
RAWPIXEL LTD

• Portable audio demands wireless

• The wireless smart home
• Wireless technologies guide vehicle tech

Digital America 2017 117

 WIRELESS

I
t’s a startling statistic: some of the consumer technology volumes are holding on strong. Laptops, for instance,
industry’s largest combined categories — smartphones, maintained steady unit volumes in 2016 and are projected
computing devices and televisions — will dip to below to repeat that performance in 2017, with shipments of 27
half of overall industry revenues in 2017, according to million units expected. “New form factors such as detach-
CTA’s U.S. Consumer Technology Sales & Forecasts 2012- ables and convertibles are making up an increasing portion
2017 report. of all laptops,” the CTA report noted, “and they will give
Just three years ago, smartphones—which contribute the category fuel for the coming years.”
a quarter of industry revenue—were seeing double-digit Overall, the U.S. tech industry will return to growth
revenue growth. But that has slowed to three percent in 2017 for the first time since 2010, forecasts The NPD
growth in 2016, according to CTA’s report, as the devices Group, a Port Washington, New York, market research
find themselves in the hands of owners less inclined to firm. The firm is forecasting a nearly two percent increase
replace them. Likewise, tablets, a generous contributor to in tech industry sales in 2017 versus 2016. The firm cites
industry revenue since its 2010 introduction, saw sales fall wireless driven technologies, in particular, drones, home
13 percent in 2016 and will see another eight percent drop automation products and virtual reality, as contributing to
this year on low replacement rates. the growth.
In fact, smartphone owners are waiting 24 months to
replace their devices, up from roughly 18 months several Augmented, Virtual Reality
years ago, observes research analyst Rick Kowalski, CTA’s
Although Pokemon GO seemed like a fad at the time, CTA’s
manager of industry and business intelligence. “One factor
Kowalski says, there will be an increase in the release of apps
contributing to the lengthening of the replacement cycle
for more location-based augmented reality games. That’s one
is that wireless carriers shifted to paid installment plans
of the trends that’s keeping smartphone sales from dropping
for phones, typically spread across 24 months, while in
more precipitously. “All these phones are being built with
the past they baked the phone’s cost into the total bill,”
augmented and virtual reality in mind and incorporate that,
Kowalski says. “It seems that a certain level of price-con-
whether it’s through apps or whether the phone is going
scientiousness is at play, now that consumers realize the full
to be used with a virtual reality headset,” he says. “Smart-
cost of the phone.” phones are trying to address every foreseeable need you
Beyond that, Kowalski adds, household penetration
have, and virtual reality is just another step toward that.”
reached 83 percent in January 2017. “That puts smart- In its report, CTA forecasts that virtual reality unit
phones in the realm of mature categories such as PCs, TVs
sales will outpace steadily falling revenues this year as VR
and radios,” the analyst says. “There are fewer first-time
becomes more “heavily weighted” towards console and
buyers driving unit sales today.” mobile applications, rather than high-end developer kits
The tapering off of sales growth in these sectors, howev-
and room-scale VR, and as Chinese suppliers “flood” the
er, reflects a larger growth cycle of maturity and innovation
space. Average wholesale prices will fall through 2020,
that leads to new revenue spikes. And despite the revenue
CTA forecasts.
slowdown for some of the larger categories, shipment In contrast to the dwindling prices and dominance of
more volume businesses in the virtual reality segment,
according to CTA, the average wholesale price of
Combined, Five Largest Revenue Sectors Dip fitness activity bands will see “modest” growth as
to Less than Half of Industry Revenue consumers plunk down cash for “more capable”
Three of Five Largest Revenue Categories are Mobile Devices high-end devices.
Weston Henderek, director for Connected Intelli-
2015 2016e 2017p gence at The NPD Group says he is seeing the same
trend. “You’ll see a lot of the other fitness tracker
Smartphones $52,916 $54,504 $55,583
OEMs look to move into the higher-end niche catego-
Tablet PCs 20,425 17,856 16,384 ries because the margins are going to be better there,”
LCD Flat-Panel 18,804 18,189 16,384 Henderek says. “There’s a critical mass of people
who are buying these devices and the price points are
Laptop/Notebook PCs 17,112 16,143 17,764
pretty high.”
Desktop Computers 5,399 4,274 15,643 Toward the end of 2016, some 18 percent of
Total $114,656 $110,965 $109,294 U.S. adults owned activity trackers, while another
seven percent owned smartwatches. “If you combine
% of Total Industry 51% 49% 48%
them,” Henderek says, “you’re starting to see sig-
Total Industry (Wholesale) $223,451 $225,089 $228,493 nificant mass market adoption of these categories.”
After a sluggish second half of 2016 for activity
Source: CTA Market Research

118 Digital America 2017

 Wearables-Category Revenue (millions)

2013 2014 2015 2016e 2017p

$1,016 $2,115 $5,384 $5,386 $5,524

Hearables Smartwatches Health and Fitness Technologies

Source: CTA Market Research

trackers, owed to Google’s slow release of its Android
Wear 2.0 operating system, the analyst expects new prod-
uct introductions, new customers coming into the market
and more robust sales in the sector in 2017 and beyond.
Those will in part be buoyed by the introduction later this
year of the newest iteration of the Apple Watch, a “more
dynamic upgrade,” Henderek says, than the last revision.
In the meantime, it will be at least a year before other
fitness tracking form factors, such as jackets and shoes with
embedded devices, gain any mass market traction beyond
manufacturers testing concepts, the analyst says. One trend
underway is the convergence of technology and conven-
tional watches, both on the OEM side and in retail outlets,
where merchandisers are displaying smartwatches, fitness
activity bands and conventional watches in the same space.
“There used to be a clear divide,” he says. “Now there’s a
real grey area.”
Henderek also sees “reasonable” growth in the smart-
watch segment due in part to new applications for the
devices, including home automation for thermostat control,
garage door openers and other smart home uses. “The
smartwatch makes sense as a central hub for the home,” he
says, “rather than people having to take out the smart-
phone from their pocket.”
In another area of mobility, the lack of a headphone
jack on the iPhone 7 is spurring demand for wireless
methods by which consumers can listen to their devices. “It
seems like wireless headphones and earbuds are picking up
some speed because of this,” says CTA analyst Kowalski.
Indeed, wireless technology is a key driver in the
portable audio sector. CTA’s Consumer Technology Ex-
tended Forecasts 2015-2020 cites “exceptional” growth
for wireless headphones, with roughly 7.5 million units
forecasted to ship this year, and 11.4 million units
shipping next. The headphone category is forecast to
grow from $2.2 billion in 2016 to $2.6 billion this year.
Similarly, wireless capabilities are helping to drive the
audio speaker market. As four in 10, or 41 percent of
U.S. households owned at least one Bluetooth/AirPlay
capable speaker in 2016, up 10 percentage points from
2015, Bluetooth/Airplay capable speakers are forecast to
see unit shipment growth each year through 2020.
Wireless Connectivity in the Home
In the home, the big trend is that more Americans are ready
to embrace voice controls for their smart home products,
according to the 2017 Smart Home Marketplace Survey by
Coldwell Banker Real Estate LLC and Vivint Smart Home,
which conducted the survey just ahead of CES® 2017.
The survey showed that 72 percent of Americans who
have products controlled remotely by a smartphone, tablet,
computer or by a separate automatic system within the

Americans With Smart Products Use The Voice Control Feature To:
Control Smart Entertainment 57%

Control Smart Lighting 33

Control Smart Smart Security Products 33

Shop 33

Control Smart Temperature 30

Help With Cooking and Chores 29

Control Smart Appliances 28

0% 10% 20% 30% 40% 50% 60%

Source: 2017 Smart Home Marketplace Survey by Coldwell Banker Real Estate and Vivint Smart Home

Digital America 2017 119

 WIRELESS

Americans With Smart Products With Voice Control Would Like To Use It To:
Control Smart Entertainment 43%

Control Smart Lighting 42

Control Smart Temperature 41

Control Smart Smart Security Products 36

Control Smart Appliances 19

Help With Cooking and Chores 18

Shop 16

0% 10% 20% 30% 40% 50% 60%

Source: 2017 Smart Home Marketplace Survey by Coldwell Banker Real Estate and Vivint Smart Home

home itself want voice control. It also found that 48 percent

of Americans with smart home products have voice control
capability.
Earlier Coldwell Banker surveys showed that both techno-
philes and relative novices embrace smart home technology,
so the broad acceptance of voice controls in the connected
home may not be a surprise in that context. The broad use
of Siri and her voice-control peers in smartphones has also
paved the way for the embrace of voice control in the con-
nected home, Coldwell Banker says.
Entertainment is the application of choice for those using
voice controls. More than half, or 57 percent, of Americans
with voice-controlled smart home products use the feature
to control smart entertainment, such as playing music, or
controlling smart TVs and speakers, the 2017 Smart Home
Marketplace Survey showed. Entertainment was followed by
voice-activated lighting, security and shopping functions, tied
at 33 percent. Similarly, entertainment was the top use for
voice-controlled products among those Americans surveyed,
at 43 percent, who do not yet own such products.
“We’re not surprised that so many Americans want to
be able to use their voice to control smart home products,
because it makes for a much more intuitive user experience,”
said Sean Blankenship, Coldwell Banker’s chief marketing
officer. Not surprisingly, younger generations are more likely
to already have voice capability on their smart home prod-
ucts, the Coldwell Banker survey found. Some 58 percent of
millennials, leading the trend, have smart home devices with
voice control features, followed by 50 percent of Gen Xers
and 26 percent of Baby Boomers.
Parents, who have their hands full with busy homes, are
another group who want a voice-enabled home. The survey
showed that 81 percent of parents who have smart home
GRASSETTO

products want to control them with voice activation. Some

65 percent of parents with smart home products already have
voice control on the devices.

120 Digital America 2017

 Steady Growth for Driverless Cars
20,000
Autonomous Vehicle Shipments by SAE Level Forecast North America 2014 to 2030
18,000
16,000
14,000
Level 5
12,000
(000s)
Level 4
Level 3
10,000
Level 2
8,000
6,000
4,000
2,000
0
’14 ’15 ’16 ’17 ’18 ’19 ’20
Source: ABI Research
The voice-control trend was apparent at CES 2017.
Making a big splash at the show was Amazon and its Al-
exa-enabled Echo and Echo Dot devices. Airmega, a smart
air purifier that launched last year, for example, announced
its integration with Alexa, enabling users to turn on or off
the device with their voice. Whirlpool announced that it is
equipping a range of its appliances with Wi-Fi, with voice
activation, via Amazon’s Alexa, a standard feature. And
the LG Smart Instaview refrigerator is fully Alexa-enabled,
letting consumers order groceries or play music with a
voice control.
While Siri is the most commonly used digital assistant
across consumer technology products in general, Alexa
usage is twice as high among smart home product owners,
compared to the general population of voice command
users, according to The NPD Group.
“Alexa integration into such a wide range of devices has
positioned it to be the leading artificial intelligence driving
home automation devices,” says John Buffone, executive
director and industry analyst, NPD Connected Intelligence.
One in five Echo users have adopted the Echo to control
other devices within their homes, Buffone says. “We expect
this to become increasingly common as Alexa adds skills
that enable control of additional devices,” he adds.
Security and monitoring products lead the smart home
category, comprising more than 60 percent of revenues,
according to The NPD Group. In 2016, smart entry devices
such as smart doorbells saw an increase in U.S. dollar and
unit sales of 171 percent and 206 percent, respectively,
compared to the previous year, according to the market
research firm. During the same period, NPD notes that U.S.
dollar sales of home automation products rose 57 percent.
The NPD Group says awareness of smart home devices
has fluctuated, but smart doorbells have seen increasing
awareness and ownership, while networked video cameras
continue to be the most common smart home component,
’21 ’22 ’23 ’24 ’25 ’26 ’27 ’28 ’29 ’30
with nearly one-third of smart homes having networked
video cameras installed. Over the last year consumer de-
mand for multi-packs of IP cameras increased 129 percent
in U.S. dollar sales versus 2015, The NPD Group says.
“Network cameras have long been considered the entry
point into the smart home, but growing demand for items
sold in sets shows that the market is maturing,” says Ben
Arnold, executive director and industry analyst for The
NPD Group. The smart home category will nearly double
over the next two years, Arnold adds.
On Their Way: Driverless Cars
Voice activation will likewise play a big role in delivering
personalized services in autonomous vehicles, or driverless
cars, says Dominique Bonte, Brussels-based managing direc-
tor and vice president at ABI Research. “Voice technology
will be critical for driverless vehicles,” he says. “It will take
the form of personal virtual assistants, based on advanced
AI, allowing consumers picked up by robotic taxis to inter-
act with the vehicle’s system for use cases like providing the
destination or being kept up-to-date on estimated time of
arrival during the journey.”
In the automotive sector, the conversation that dominated
the industry in recent years—around developing the built-in
telematics that help drivers in emergencies—has faded for
two reasons. First, just about every car manufacturer, except
for Toyota, has embraced either Apple’s CarPlay or Google’s
Android Auto standards that allow drivers to connect their
smartphones to their vehicles’ telematics systems. And much
of the industry’s focus is now on technology that will enable
driverless cars.
In a sign of optimism, Intel Corp. recently paid $15.3
billion for Mobileye, an Israeli firm that makes sensors and
cameras for self-driving vehicles. Mobileye’s EyeQ software
is used in millions of cars worldwide to help them brake in
emergencies and stay in lanes.
Digital America 2017 121
 WIRELESS
With most car manufacturers eyeing 2020 or 2021 for
the release of their first viable fully self-driving vehicles,
and Google, Apple and Uber in the race, opportunities
abound in wireless connectivity. The expectation is that
5G cellular service will provide the low latency, or fast
data access – on the order of one millisecond or less –
necessary for vehicles to alert each other about their
presence, analyst Bonte says.
Vehicles will also have to be equipped with much
more bandwidth to accommodate video streaming
and other custom services. “Now the driver cannot
be distracted, so playing a movie in the car is lot less
hazardous. Imagine a level 4 or level 5 vehicle, which
easily drives itself,” Bonte says, referring to driverless
vehicles. “Video entertainment service is no longer a
problem, and that will open up these services at very
high bandwidth.”
Wireless connectivity will be used for vehicle lifecycle
management, addressing over-the-air updates for vehicle
software, cybersecurity and intrusions, Bonte adds. An-
other function is to aggregate sensor data to build high
accuracy maps, and real time information on traffic,
parking and weather.
The great promise of fully self-driving vehicles are
their environmental benefits, as people abandon car
ownership in favor of sharing driverless taxis. A recent
ABI Research report says driverless technology, in this
way, “will spark a transformation of personal mobili-
ty.” ABI Research forecasts there will be more than 11
million shared driverless vehicles operating on the roads
globally by 2030, serving an average of 64 users per
shared driverless vehicle. The research firm forecasts
there will be 2.6 million level 5 driverless vehicles on
North American roads by 2020, also serving an average
64 users per shared vehicle.
“As driverless vehicles are summoned at will when
needed, consumers will be able to abandon costly vehicle
ownership, instead consuming use of the Car as a Ser-
vice (CaaS),” ABI Research analysts says in their report.
“This will represent a significant disruption to OEM
business models, requiring them to transition from sell-
ing products to consumers to providing shared mobility
services.”
Harman’s recently announced Ignite Platform identi-
fies personalization as a key element of connected vehi-
cle management, ABI Research notes that recent concept
cars, including the Volkswagen I.D. Buzz, the Rinspeed
Oasis and the Chrysler Portal, all featured physically
and digitally reconfigurable interiors. These allow pas-
sengers to adapt them to support different uses, such as
the car as an office or the car as a living space.
Wireless—the Next Generation
The rollout of high-speed 5G wireless networks, in
122 Digital America 2017
CTA’s Wireless
Division
The Wireless Division strives to promote the growth
and development of wireless products, applications
and services.
Key Focus
• Provide CTA members with educational and
networking opportunities in the wireless
industry.
• Develop resources and tools to educate CTA
members on issues that affect the wireless
industry.
• Develop relevant, comprehensive market
research focused on current market challenges
and wireless products and services.
addition to helping spur the low latency connectivity
needed for driverless vehicles, will have a far-reaching
economic impact that could create up to three million
jobs and add some $500 billion to U.S. GDP, according
to a report from the consulting firm Accenture Strategy.
Smart city solutions, powered by 5G networks, could
aid in managing vehicle traffic and electrical grids,
yielding $160 billion in benefits and savings for local
communities, says Tejas Rao, managing director and
Mobile Offering Network lead for Accenture’s North
America practice. In the process, he adds, the communi-
ties could reduce commute times, improve public safety
and generate sizable smart-grid efficiencies.
Realizing the full benefits of 5G will take hundreds of
thousands of new, shoebox-sized small cells, the Accen-
ture study notes, calling for a new approach by munici-
pal leaders in wireless siting policies. The study recom-
mends that municipalities streamline local permitting
and regulations to accommodate the number of small
cells needed. It also says officials should improve access
to public rights of way and change wireless antenna
fee structures to support the new small cell deployment
model.
Acronyms
CaaS Car as a Service
 MILESTONES
IN THE
CONSUMER
TECHNOLOGY
INDUSTRY
SEREGALSV

Digital America 2017 123

 CHRONOLOGY: CT MILESTONES
2017
•B
 luetooth SIG releases v1.0 of
Bluetooth Mesh specification.
•H
 DMI 2.1 specification, which
supports 8K video, announced.
•F
 irst Hi-Res audio streaming
begins on Tidal music service.
•L
 G announces first “wallpaper TV,”
bendable 2.57mm thin OLED UHD
displays.
•C
 TA celebrates 50th anniversary of
CES®.
•L
 argest CES ever held with more
than 180,000 attendees, 4,000
exhibits, and 2.61 million net
square feet of exhibit space.
•U
 HD Alliance (UHDA) announces
performance criteria for battery-
powered devices.
•N
 intendo releases the Switch, the
first video game system designed
to be played portably or as part of a
home console.
•V
 udu allows customers to convert
Blu-rays and DVDs to digital copies
via smartphone app.
•F
 inal ATSC 3.0 specifications for 4K
broadcast standard announced.
•F
 irst travel company, Carnival
Cruise, keynotes at CES 2017.
124 Digital America 2017
2016
• Smart TVs comprise more than half
of all TVs shipped globally for the
first time.
• Field tests of next-generation 5G
cellular networks, with speeds nearly
four times that of Wi-Fi and roughly
300 times faster than 4G LTE, begin.
• UHD Alliance (UHDA) defines
premium home 4K display criteria.
• Wi-Fi Alliance announces Wi-Fi
HaLow, 801.11ha, specification.
• First 4K Ultra HD Blu-ray deck, the
Samsung UBD-K8500, goes on sale.
• Haier buys GE appliance business.
• Big box retailer Circuit City
resurrection is announced.
• FCC votes to “unlock” cable set-top
box converters.
• eero, first Wi-Fi mesh router system,
goes on sale.
• Foxconn agrees to buy Sharp
Electronics.
• Consumers spend more on
streaming video than any other
format for first time.
• Samsung starts shipping its Family
Hub refrigerator, first smart
refrigerator with touchscreen.
• Panasonic announces it will end LCD
TV panel production.
• Online sales top in-store purchases
for first time.
• Bluetooth SIG announces Bluetooth
5.0 with quadruple the range.
• Shipments of smart TVs pass 50
percent of all sets shipped globally
for first time.
• Apple sells its one billionth iPhone.
• Sales revenue from Bluetooth
headphones surpass revenue from
wired headphones for first time.
• Apple starts selling iPhone 7, the
first iPhone model with a lightning
jack only, no headphone jack.
• Samsung agrees to acquire Harman
International.
• DirecTV begins DirecTV Now, OTT
streaming of satellite content.
• T-Mobile begins consumer testing of
Digits, which allows multiple phone
numbers to be accessed on a single
smartphone.
• Multiple VR vendors form Global
Virtual Reality Association.
2015
• The Consumer Electronics
Association (CEA) becomes the
Consumer Technology Association
(CTA)™
• CES Asia launches in Shanghai, China.
• First HDR, WCG, “quantum dot” and
HDMI 2.0a 4K UHDs go on sale.
• First flat OLED HDR 4K UHD; first
UHD with Dolby Vision HDR.
• First consumer VR viewing headsets
go on sale.
• Sales of drones pass one million units.
• First field tests of 4K OTA broadcast
ATSC 3.0 standard held.
• Super MHL announced as next-
generation digital AV connector at
CES.
• Toshiba exits North American TV
business.
• Radio Shack declares bankruptcy,
then sold.
• FCC adopts “strong” open internet
“net neutrality” rules, declares
internet a public utility.
• Sony launches PlayStation Vue, a
cloud-based OTT TV service.
• Apple starts selling the Apple Watch.
• First Apple HomeKit smart home
products available.
• RIAA unveils Hi-Res Music logo.
• Nest Thread smart home developer
specification released.
• Microsoft releases touchscreen-
enabled Windows 10 OS.
• Sharp announces exit from U.S. TV
market; Hisense buys Sharp’s U.S. TV
business.
• Specifications for Vidity, a secure
digital bridge content sharing
standard, announced by SCSA (Secure
Content Storage Association).
• Amazon enables download of Prime
videos for offline viewing.
• Android Pay and Samsung Pay launch
in U.S.
• First 4 media streamers, Google
Chromecast Ultras and Roku 4,
announced.
• Western Digital buys SanDisk.
• Amazon opens its first brick-and-
mortar bookstore, in Seattle.
• Competing wireless charging
technology groups merge into single
AirFuel Alliance.
• Sprint rolls out LTE Plus, the first
LTE-Advanced nationwide network in
the U.S.
2014
• Global revenue from sales of digital
music – streaming and downloads –
surpasses CD revenue for first time.
• Unit sales of action cams pass
unit sales of traditional “beer can”
camcorders for first time.
• First 360-degree spherical
camcorders go on sale.
• Sony exits e-reader and personal
computer business; spins off TV
business into standalone entity.
• Wearable device category hits 50
percent consumer awareness.
• Google announces the Android-
based Open Auto Alliance (OAA)
smart car initiative.
• Google acquires Nest Labs.
• Google announces sale of Motorola
smartphone business to Lenovo.
• First curved smartphone, LG G
Flex, goes on sale.
• LG starts selling first OLED UHD
TVs.
• First smartphone with 4K video
recording, LG G Pro 2, goes on sale.
• Netflix and Amazon begin 4K video
content streaming; DirecTV begins
4K on-demand delivery.
• First digital camera with 4K video
recording, Panasonic DMC-GH4,
goes on sale.
• AT&T announces purchase of
DirecTV; bundles TV, cell service.
• A pple buys Beats Electronics and
Beats Music online streaming
service.
• Industry organizations agree on Hi-
Res audio standards.
• First smartphone with sapphire
glass screen, Kyocera Brigadier,
goes on sale.
• Jack Wayman, founder of CES, dies.
• Sprint announces first smartphone
leasing option, iPhone for Life.
• Pioneer merges home electronics
division with Onkyo.
• A pple launches ApplePay pay-by-
phone system.
• LG, Samsung exit plasma TV
business, the last plasma
manufacturers.
• A mazon announces Amazon Echo
standalone voice command home
assistant Bluetooth speaker.
2013
• Unit sales of smartphones surpass
one billion.
• First 4K Ultra High-Definition (UHD)
TVs go on sale.
• First high-resolution audio
playback devices and music
download services are launched.
• HEVC (High Efficiency Video
Coding), aka H.265 video
compression format, approved.
• Pre-paid cellular companies begin
to sell 4G LTE smartphones.
• Mobile app downloads exceed 100
billion downloads.
• Factory revenue sales of 3G/4G
smartphones and tablets surpass
sales of traditional CE products for
first time.
• First smartphones with quad-core
processors and 13 MP cameras go
on sale.
• GoPro, maker of action
camcorders, becomes leading
camcorder seller in U.S.
• Sony announces first 4K content
streaming service at CES 2013.
• First smartwatch, Pebble, becomes
available.
• BlackBerry eliminates RIM
(Research in Motion) corporate
name and announces Z10
smartphone running new BB10
operating system.
• FCC agrees to expand unlicensed 5
GHz band for Wi-Fi deployment.
• HP sells webOS to LG.
• Glassless 3D TV systems, co-
developed by Dolby, Philips and
Rembrandt, demoed.
• T-Mobile and MetroPC merge.
• A pple announces “in-the-car” car-
compatible extension of iOS, later
dubbed CarPlay.
2013
• E SPN shuts down dedicated 3D
channel.
• Single uncompressed HD video,
multi-channel audio, power and
Ethernet HDBaseT 2.0 standard
announced.
• Microsoft buys Nokia cell phone
business.
• HDMI 2.0 standard announced;
Panasonic 65-inch Ultra HD first to
include it.
• First Passpoint-certified Wi-Fi
hotspots become active at Chicago
O’Hare airport.
• Ray Dolby, whose name appears
on more electronics devices and
content than any other, dies.
• First smartphone with fingerprint
recognition, iPhone 5S, goes on sale.
• B&O announces first WiSa-certified
multi-channel wireless speakers.
• First Bluetooth-controlled bolt door
lock, Kevo, powered by UniKey and
made by Kwikset, goes on sale.
• FAA expands passenger inflight use
of electronics.
• Panasonic announces exit from
plasma TV business.
• NFC Forum, Bluetooth SIG
collaboration is announced.
• Sony PlayStation 4 and Xbox One
game consoles released a week
apart. Each sells one million units
in 24 hours.
• Smaller, reversible USB-C jack
announced.
• U.S. House of Representatives
passes anti-patent troll legislation.
• W i-Fi 802.11ac standard, offering
wireless speeds of 1.3 Gbps,
approved.
Digital America 2017 125
 CHRONOLOGY: CT MILESTONES
2012
• U.S. factory sales of consumer
electronics exceed $200 billion
annually.
• First consumer drones go on sale.
• Shipments of smart connected
devices surpass one billion for the
first time.
• Global spending on technology
devices tops $1 trillion.
• First five-plus-inch smartphones
with HD resolution go on sale.
• First short-throw laser and pico
projectors announced.
• First Wi-Fi-equipped camcorders
available.
• First “premium compact” point-and-
shoot digital cameras go on sale.
• Mobile Content Venture (MCV) DTV
“Dyle” platform, Mobile 500 Alliance
broadcast groups initiate Mobile DTV
broadcasting.
• Half of online U.S. adults watch
some sort of streaming or
downloaded video at home according
to CEA’s study.
• Internet anti-privacy acts SOPA
(Stop Online Piracy Act) and PIPA
(Protect IP Act) killed in U.S. House
and Senate.
• Eastman Kodak files for Chapter
11 bankruptcy, ends camera and
printer sales.
• Sony purchases Sony Ericsson and
re-enters cell phone market as Sony
Mobile.
• Sony PlayStation Vita portable game
player goes on sale.
• Samsung’s ES8000, the first HDTV
with a built-in Web cam, goes on sale.
• Google unveils Google Glass
internet-connected eyewear.
• Solidoodle launches first sub-$500
3D printer.
• Google buys Motorola smartphone
business.
• IPv6 Internet protocol launched.
• London Summer Olympic games are
first to be broadcast in 3D.
• First digital camera to run on
Android operating system, the
Samsung Galaxy Camera, is
announced.
• Smartphone ownership surpasses
50 percent of all mobile subscribers
for first time.
126 Digital America 2017
•A
 pple announces iPhone 5, iPad Mini
tablet with lightning connecting jack
and Siri voice assistant.
•M
 icrosoft Windows 8 PC and tablets,
Windows Phone 8 smartphones and
tablets go on sale.
•P
 hilips announces Philips Hue LED,
first mass market smartphone-
controlled smart bulb.
•F
 irst smartphone with built-in Qi
wireless charging, Nokia 920, goes
on sale.
•F
 irst car with built-in wireless
charging pad, Toyota Avalon,
introduced.
2011
• Digital music download sales beat
CD sales for the first time.
• First products with Wireless Power
Consortium’s Qi wireless charging
standard go on sale.
• First “passive” 3D HDTVs go on sale.
• First cars with smartphone app-
compatible operating systems go on
sale.
• First contextual ecommerce
capability, allowing consumers to buy
from TV EPG, announced.
• Motorola splits into two companies;
its cell phone business sold to
Google.
• First dual-core processor
smartphone, Motorola Atrix,
announced at CES 2011.
• First tablet PC running the tablet-
specific Android 3.0 Honeycomb OS,
the Motorola Xoom, is announced
at CES.
• Audiovox announces it will buy
Klipsch.
• JVC announces the first 3D
camcorder, the GS-TD1.
2011
• Sony and Toshiba demonstrate
glasses-free 3D HDTV at CES.
• Apple expands iPhone sales to Verizon
and Sprint.
• The first dual-screen smartphone, the
Kyocera Echo, announced.
• Microsoft enters into strategic
relationship with Nokia for Windows
Phone models.
• Retailer Ultimate Electronics goes out
of business.
• CEA launches wireless power
technical standards program, the
Wireless Power Subcommittee.
• Thunderbolt interconnection
standard, developed by Apple and
Intel, introduced in Apple MacBook
Pro laptops.
• Nintendo 3DS, the first glasses-free 3D
portable gaming device, goes on sale.
• Japanese earthquake, tsunami, and
flooding in Thailand, slows component
production.
• Qualcomm FLO mobile TV service
ends; spectrum sold to AT&T.
• Intel announces ultra-thin
“Ultrabook” laptop PC specifications.
• Apple launches iCloud cloud-based
storage service.
• Lytro light field “perspective shift”
post-capture focusing camera
announced.
• First 21:9 aspect ratio HDTVs go on
sale; CEA announces 21:9 standards
effort.
• First device with low-power Bluetooth
4.0, Apple iPhone 4S, goes on sale.
• Apple Co-founder Steve Jobs dies;
Apple becomes the world’s most
valuable company and the first CE
company to achieve this status.
• First UltraViolet digital rights
authorized/cloud-based licensed Blu-
ray title, Horrible Bosses, is released.
• Jawbone UP, first wrist fitness
tracker, goes on sale.
• Amazon Kindle Fire tablet/e-book
goes on sale.
SCANRAIL
• Amazon e-books surpass paperback
book sales.
2010
• First 3D HDTVs, 3D Blu-ray players
and 3D Blu-ray movies go on sale;
first stereoscopic 3D programs
broadcast.
• 4 G LTE wireless broadband
networks rolled out in two dozen
markets.
• First cell phones with built-in
mobile Wi-Fi hot spot capability
become available.
• Flash memory becomes
predominant camcorder storage
medium.
• First USB 3.0 products go on sale.
• A ndroid becomes leading-selling
smartphone OS.
• 4K Ultra HDTVs demonstrated at
CES 2010.
• A pple iTunes becomes world
largest music vendor.
• HP buys Palm and webOS operating
system.
• A pple iPad goes on sale.
• Bluetooth 4.0 Low Energy (LE)
finalized.
• Nest Labs founded.
• HTC’s EVO 4G, the first 4G cell
phone in the U.S., goes on sale from
Sprint.
• Gesture-based gaming system
add-ons for Microsoft Xbox 360 and
Sony PlayStation, Kinect and Move,
announced.
• Sony unveils the NEX-VG10E,
the first interchangeable lens
camcorder.
• FCC approves spectrum for “super
Wi-Fi.”
• Google announces its self-driving
car project.
• Microsoft’s launches Windows
Phone 7 OS.
• The first color dedicated e-book
readers announced.
• High-speed CompactFlash card
standard specifications announced.
2009
• A pple eliminates DRM from tracks
sold on iTunes.
• SDXC (Secure Digital eXpanded
Capacity) format, enabling SD cards
of up to 2 TB, announced at CES
2009.
• Circuit City ends operations.
• Micro-USB universal cell phone
charger standard proposed.
• LTE (Long Term Evolution) wireless
broadband network standard
ratified.
• Bluetooth v3.0 specification
announced.
• Pioneer sells its plasma TV
business to Panasonic.
• The first solar-powered cell phone,
the Samsung Guru, is announced.
• Analog TV broadcasting ends.
• Best Buy begins to sell the Insignia
NS-HD01, the first portable HD
Radio receiver.
• First call made via hybrid cell/
satellite phone, the TerreStar-1.
• The first 3D still camera, Fuji W1, is
announced.
• J VC and Kenwood merge.
• Microsoft opens its first retail outlet
in Scottsdale, AZ.
• W HDI (Wireless Home Digital
Interface), in-home wireless HDMI
video connectivity standard, is
announced.
• Blu-ray Disc Association ratifies 3D
Blu-ray standard.
• Panasonic and Sanyo merge.
2008
• HDTVs with Web access become
widely available.
• First cell phones with near-field
communications (NFC) technology
become available.
• High-definition movie rental
downloads begin.
• Mobile DTV standards and testing
announced.
• Roll-out of nationwide WiMAX mobile
wireless broadband network begins.
• First ultra-light netbook laptop PCs
go on sale.
• Most online music retailers end copy
protection and restrictions.
2008
• Digital TV converter coupon program
begins and converter boxes go on
sale.
• In-room cable-replacement
WirelessHD (WiHD, aka UltraGig)
technology finalized.
• Warner Bros. drops support for
HD-DVD, making Blu-ray the high-
definition DVD format standard.
• Beats by Dr. Dre headphones
introduced by Monster Cable.
• First “green” CES.
• The first ultra-thin LCD HDTV is
announced at CES 2010.
• First movie releases on Blu-ray
and DVD with extra PC-compatible
digital copies (iTunes Digital Copy)
included are released.
• A pple’s iTunes becomes U.S.’s
largest music seller.
• Sirius and XM satellite radio
providers finalize merger.
• LG announces BD-300, the first
Blu-ray player with streaming
movie services included.
• Micro Four Thirds digital camera
interchangeable lens standard,
developed by Olympus and
Matsushita, is introduced.
• The first smartphone running
Google’s Android OS, the T-Mobile
G1 (aka HTC Dream), goes on sale.
• Spotify online streaming music
subscription service launches.
• Comcast and Panasonic deploy first
Tru2way interactive cable TV STBs,
CableCARDs and HDTVs.
• The Telenav Shotgun, the first two-
way personal navigation device
(PND), goes on sale.
• HP announces its TouchSmart
tx2, the first consumer multi-
touchscreen laptop PC.
• The first pico pocket video
projector, the Optoma Pico, is
announced.
2007
• First cell phones that can receive
broadcast television become
available.
• CES 2007 celebrates 40th
anniversary.
• Netflix announces movie streaming
service.
Digital America 2017 127
 CHRONOLOGY: CT MILESTONES
2007
• Zink Imaging introduces inkless
printing – no ribbons or cartridges.
• Apple begins selling its Apple TV,
the first Wi-Fi-enabled “media
streamer” STB.
• Asus unveils the Eee PC, the first
“netbook” computer.
• Apple iPhone goes on sale.
• All GPS location limitations removed,
making portable navigation devices
(PND) a mainstream product
category.
• Sony announces its XEL-1, the first
OLED HDTV.
• Amazon Kindle e-book reader
introduced.
2006
• Inkjet printers using longer-lasting
pigment-based ink introduced.
• Sales of digital TVs surpass sales of
analog TVs.
• First DECT 6.0 cordless phones go
on sale.
• First cellular and cordless phones
with Wi-Fi come to market.
• First broadband HSDPA GSM and
CDMA EV-DO cell phones available
in U.S.
• The first 1080p plasma
HDTVs go on sale.
• First RPTV HDTVs with
LED lighting technology
demonstrated at CES
2006.
• Samsung and Time
Warner Cable deploy the
first OCAP (Open Cable
Applications Platform)
TV and cable systems.
• Western Union sends its
last telegram.
• President George W.
Bush signs legislation
to end analog television
broadcasting on
February 17, 2009.
• Twitter CEO Jack Dorsey
sends first tweet.
128 Digital America 2017
2006
• Pure Digital Point & Shoot
“disposable” digital camcorder,
which evolves into the Flip, goes on
sale at CVS drug stores.
• Competing high-definition DVD
players go on sale in the U.S.
• Sony’s Handycam HDR-UX1, the first
camcorder using the AVCHD format,
co-developed by Sony and Panasonic,
goes on sale.
• CEA and IT industries file “consensus
proposal” with FCC to end plug-
and-play two-way cable TV
interoperability stalemate.
• New Wi-Fi 802.11n specification,
enabling throughput of 100 Mbps for
wireless local transmission of HDTV,
is approved by IEEE.
• Next generation Sony PlayStation
3 and Nintendo Wii video game
systems go on sale in North America.
• One billionth Bluetooth device ships.
2005
• The first PCs with dual processors
become available.
• Cell phone carriers offer live,
downloadable TV clips and music
stores.
• Consumer digital cameras reach 10
megapixel resolution.
• AV home theater receivers with HDMI
connectivity and direct satellite radio
connectivity go on sale.
• Flash media card capacity reaches
4 GB.
• Sonos starts shipping its Digital
Music System, the first multi-zone
distributed Wi-Fi audio system.
• The first subscription-based online
digital music service, Napster To Go,
and compatible portable devices is
announced.
• YouTube debuts.
• CEA inducts its first class of Digital
Patriots, honoring government and
industry leaders for their positive
impact on the rapidly evolving
consumer technology industry.
• U.S. Court of Appeals strikes down
FCC’s “broadcast flag” order.
2005
• The first stand-alone VoIP phone,
the Motorola Ojo, is introduced at
Summer CES.
• FCC requires mandatory inclusion of
ATSC DTV tuner in 50 percent of all
24-inch to 35-inch TVs by July 1.
• Plantronics Pulsar 590, the first
Bluetooth stereo headphones, go on
sale.
• The first portable MP3 player/
satellite radio recorder, the Sirius
S50, is announced.
• Pandora, the first music streaming
service, launches for public
streaming.
• The first digital cameras with built-
in Wi-Fi, the Nikon Coolpix P1 and
Coolpix P2, are announced.
• Skype internet video phone service
launches.
2004
• Single-year U.S. sales of consumer
electronics surpass $100 billion.
• USB-equipped flash memory
“thumb drives” become available.
• The first flash memory camcorders
go on sale.
• Cell phones equipped with video
cameras and megapixel digital still
cameras become available.
• 1 GB flash memory cards become
available.
• The first portable digital music
players with color LCD screens go
on sale.
• Media-in-newsfeed internet
content morphs into “podcasting.”
• U WB (ultra wideband) wireless
broadband technology capable of
achieving speeds as high as 110
mbps is commercialized.
• Harvard students led by Mark
Zuckerberg launch Facebook.
• FISH (Flash Internal Semiconductor
Hard drive) flash memory format is
announced, but never catches on.
• Discussions begin on inter-
WAFFOZZY
carrier push-to-talk cellular (PoC)
compatibility.
 2004
• DualDisc, combination CD and DVD,
is introduced.
• FCC and FTC begin rules-making
process on the “CAN-SPAM Act” to
curb email spam.
2003
• J VC announces the HDV-
format GR-HD1, the first HDTV
camcorder, which goes on
sale in June, followed by Sony
HVR-V1 in September.

• Sony announces first dual-layer • S amsung announces the DVD-

(8.5 GB) DVD recording drives and
blank media.
• Google unveils Gmail.
• Combination cable HDTV STB
and HDTV DVRs and CableCARD-
equipped DTVs announced.
• Professional Audio/Video Retailers
Association (PARA) merges with
CEA.
• More than 200 companies form
DLNA (Digital Living Network
Alliance) to merge multiple wired
and wireless, CE and PC standards
into interoperable home network
standards.
• MobiTV, which enables compatible
cell phones to receive live TV
broadcasts, becomes available.
2003
• The first HDMI-equipped HDTVs are
available.
• The first IBOC digital radio
receivers go on sale.
• The first Wi-Fi and Bluetooth-
equipped PDAs are available.
• Commercial voice-over-Internet
(VoIP) phone service begins.
• P Cs with built-in Wi-Fi capability go
on sale.
• HD-compatible PVRs/DVRs become
available.
• The first consumer 64-bit personal
computers go on sale.
• The first PDA watches debut.
• The first flash memory camcorders
become available.
• Traditional PC makers such as Dell
and Gateway enter the consumer
electronics product business.
TIHOMIR_TODOROV
HD931, the first DVI-equipped
DVD player; it goes on sale in
June.
• Specifications for the
PictBridge, which allows digital
devices to be directly connected
to printers, is published by (Camera
& Imaging Products Association)
CIPA.
• DVD movie rentals surpass VHS in
revenue, then in units, for the first
time.
• The only legal digital catalog of
music to offer songs from all five
major record labels, Apple’s iTunes
store, launches.
• Eight consumer electronics
companies form CE Linux Forum
(CELF).
• Distributed Audio Alliance merges
with CEA.
• High-speed Wi-Fi 802.11g
specification is published.
• IEEE 802.15.3, a wireless 55-Mbps
2.4-GHz standard, designed to
coexist with Wi-Fi and Bluetooth
devices, is announced.
• GPS Wide Area Augmentation
System (WAAS) is implemented,
improving accuracy to within a
yard.
• CEA adopts CEA-2008 Digital
Entertainment Network Initiative
(DENi).
• BlackBerry starts selling its first
smartphone, the 7230.
• DBS TV service surpasses the 20
million subscriber mark.
• Skype launches PC-based VoIP
service.
• Canon announces its Rebel EOS
• Dolby Pro Logic IIx, which
upconverts two-channel audio,
matrixed Dolby Surround, and
5.1-channel audio into 6.1-
and 7.1-channel surround, is
announced.
• CEDIA and CEA announce joint
membership benefits.
• The Panasonic SC-HT1000, the first
HTiB system with a built-in DVD
recorder, is announced.
• FCC approves “plug-and-
play” cable set-top box HDTV
interoperability compatibility rules.
• The first copy-protected CD,
Anthony Hamilton’s “Comin’ From
Where I’m From,” goes on sale.
• E xpressCard flash media format
for PC memory expansion is
introduced.
• FCC adopts controversial anti-
piracy “broadcast flag” technology.
• Local Number Portability (LNP)
allows consumers to keep their
mobile phone numbers when
switching cell phone carriers or
transferring landline numbers to a
portable account.
• MobiTV, debuts, enables
compatible cell phones to receive
live TV broadcasts.

300D, the first sub-$1,000 DSLR

• The first FireWire 800 (FireWire
IEEE-1394b)-equipped products
become available.
camera.
• The first products equipped with
xD-Picture Card flash memory
cards, developed by FujiFilm and
Olympus, go on sale.

Digital America 2017 129

 CHRONOLOGY: CT MILESTONES
2002
•M
 obile phone subscribers pass one
billion globally, surpassing fixed
line subscribers.
•5
 .8 GHz cordless phones are
introduced.
•T
 he first location-based E911 cell
phones hit the market.
•H
 ome Automation and Networking
Association (HANA) merges with
CEA, becoming the TechHome
Division of CEA.
•F
 CC announces limited deployment
of ultra-wideband (UWB) wireless
data network technology.
•B
 lu-ray and red laser high-
definition DVD recording standards
are announced.
• High-Definition Multimedia
Interface (HDMI) digital video
connector format is announced.
•F
 CC requires mandatory inclusion
of ATSC HDTV tuner in 36-inch and
larger HDTVs.
•S
 ony announces end of Betamax
VCR manufacturing.
•F
 CC denies EchoStar-DirecTV
satellite TV merger.
•T
 he first combination cell phone/
digital camera in U.S., Sanyo SCP-
5300, becomes available.
•T
 V manufacturers and cable
operators (NCTA) announce “plug-
and-play” specifications for HDTV
set-top boxes and HDTVs.
130 Digital America 2017
2001
• S ales of movies on DVD surpass
sales of pre-recorded VHS for the
first time.
• The first legal online music sites
launch.
• Nationwide two-way satellite
internet access becomes available.
• The first DVD-based digital
camcorder, the Hitachi DZ-MV100A,
is announced.
• A pple releases iTunes, its
“jukebox” music library
management software.
• A pple releases OSX Macintosh PC
operating system.
• 3G, the first high-speed, next-
generation cell phone networks,
are activated.
• A pple opens its first two retail
stores, in McLean, VA, and
Glendale, CA.
• Sony and Microsoft introduce
internet-enabled video game
consoles.
• S atellite radio broadcasting, XM
Radio, begins.
• U.S. Justice Department settles
anti-competitive lawsuit with
Microsoft.
• FCC raises spectrum cap for
cellular phone carriers from 45
MHz to 55 MHz.
• A pple’s iPod digital music player
goes on sale.
• Next-generation, higher speed USB
2.0 standard is announced.
2000
• SuperBowl and NCAA Final Four
programs are broadcast in HDTV
for the first time.
• The first Bluetooth-enabled
products launch.
• The first HDTV direct broadcast
satellite dishes become available.
• CEA announces first class of
industry leaders into the Consumer
Electronics Hall of Fame.
• Bill Gates steps down as Microsoft
CEO.
• CEA and the cable industry (NCTA)
agree on standards for transmitting
digital television.
• Palm’s IIIc Pilot becomes the first
PDA with a color screen.
• Stephen King’s Riding the Bullet is
the first original eBook available
for sale online before it hits
bookstores.
• The selective availability
limitation is removed from the
global positioning system (GPS),
increasing the accuracy of locating
a position from 100 yards to 10 feet.
• CEA and NCTA agree on HDTV
labeling standards.
• Internet access reaches 50 percent
household penetration in the U.S.
• S amsung’s UpRoar (SPH-M100)
becomes the first cell phone/MP3
player combination.
1999
• The Consumer Electronics
Manufacturers Association (CEMA) is
renamed the Consumer Electronics
Association (CEA) and becomes a
separate legal entity.
• Consumer recordable DVD systems
demonstrated.
• Cable modems are sold in stores for
the first time.
• DVD-Audio and Super Audio CD
(SACD) players are introduced.
• HP’s Jornada 420, the first color-
screen handheld PC, announced
as part of Microsoft Windows CE
1550539
upgrade to color.
• The Neopoint 1000, the first internet-
enabled cell phone, is introduced.
1999
• The first hard disk-based digital
personal video recorders (PVRs)
from TiVo are introduced, capable
of “smart” programming and
instantaneous playback of a recorded
TV program, even while the program
is running.
• Congress mandates that local
channels be made available to direct-
to-home satellite subscribers.
• Mitsubishi becomes the first TV
manufacturer to sponsor network
HDTV broadcasts.
• The Dolby Surround EX sound
system debuts.
• The pay-per-view DIVX DVD format is
discontinued.
• Panasonic announces the PV-
HD1000, the first HD-compatible
VCR.
• V1.0 of the Bluetooth wireless
standard is published.
• High-speed Wi-Fi 802.11 specification
is approved by ANSI.
• Wireless Ethernet Compatibility
Alliance (WECA) is formed to certify
and promote various 802.11 Wi-Fi
technologies; later renamed the Wi-
Fi Alliance.
• DirecTV launches HBO HDTV,
the first DBS high-definition TV
broadcasts.
• Panasonic, Toshiba and SanDisk
announce Secure Digital (SD) flash
memory card format.
• The first high-definition VCR goes on
sale.
• The first DVD players offering
progressive-scan video output for
use with new DTVs arrive.
• First satellite digital radio service,
WorldSpace, launches.
• The RIAA (Recording Industry
Association of America) sues
Napster.
• Two teenaged friends, Shawn
Fanning and Sean Parker, launch the
Napster peer-to-peer music sharing
service.
1998
• The Electronic Industries Association
is renamed the Electronic Industries
Alliance.
• DVD-ROM, DVD-RAM, DVD-R and
DVD+R formats are introduced.
• The first draft of the DVD-Audio
format is released.
• CD-Recordable decks debut.
• T V manufacturers and cable
operators agree on IEEE-1394
(FireWire) with 5C copy protection.
• Microsoft announces Auto PC, a
Windows OS for the car.
• Version 1 of the MPEG 4 digital video
compression technology is released.
• AOL begins to offer first DSL (Digital
Subscriber Line) internet access using
plain phones lines.
• Netflix, first nationwide DVD rental
service, launches.
• The first HDTV satellite broadcast is
demonstrated.
• Panasonic announces the first 2.4
GHz cordless phones.
• U.S. Justice Dept. files suit against
Microsoft for being a monopoly.
• Special Interest Group (SIG)
for Bluetooth wireless data
communication standard is formed.
• The first HDTV sets is sold at retail at
Dow Stereo in LA.
• Google internet search engine
founded.
• DIVX, a pay-per-view DVD format, is
introduced.
• Sony announces Memory Stick
compact flash card format.
• John Glenn shuttle launch first
nationally televised HDTV broadcast.
• The first global satellite phones and
pagers are sold by Iridium.
• The first mass-market MP3 digital
music player, the Diamond Rio
PMP300, goes on sale.
• Network HDTV broadcasting
begins with 101 Dalmatians on The
Wonderful World of Disney.
• Version 1 of the MPEG 4 digital video
compression technology is released.
• Secure Digital Music Interface
(SDMI) is announced to ensure copy
protection of MP3 files.
• Bill Gates gives his first CES keynote.
1997
• 56 kbps modems hit the market.
• Component video connection
format is introduced.
• First DVD players, two models from
Toshiba (SD-2006, SD-3006), hit the
U.S. market.
• First group of feature films
released on DVD.
• Philippe Kahn jury-rigs a camera
with a cell phone to create the first
cell cam.
• The Wi-Fi (802.11) wireless local
area network (WLAN) Ethernet
standard are adopted.
• Steve Jobs returns to Apple.
• Panasonic’s Plasma View TH-
42PM1, the first plasma and the
first large, wide and flat screen TV,
goes on sale.
• Pioneer introduces the PDP-501HD,
the first high-definition plasma
display.
• Motorola starts selling the first
two-way pager, the Tango.
1996
• Motorola introduces the StarTAC,
the first clamshell cellular phone.
• President Clinton signs the
Telecommunications Act of 1996,
containing a directive to television
manufacturers to begin installing
“V-Chips” in TVs that would allow
selected programming to be
blocked.
• Two handheld computer formats,
Palm Pilot and Windows CE, are
introduced.
• Zenith introduces the U.S. market’s
first HDTV-compatible front-
projection TV.
• WebTV, the first set-top box to plug
into TVs and allow viewers to surf
the internet via remote control, is
announced. 

• WRAL, Raleigh, N.C., receives
first HDTV broadcast license; first
commercial HDTV broadcast is by
WHD-TV in Washington, D.C.
Digital America 2017 131
 CHRONOLOGY: CT MILESTONES
1996 continued
• The first DVD players, the
Panasonic DVD-A100 and the
Toshiba SD-3000, go on sale in
Japan.
• A n agreement among
broadcasters, TV manufacturers
and PC makers sets the inter-
industry standard for HDTV.
• FCC adopts ATSC HDTV standards.
1995
•F
 irst cordless phones with digital
spread spectrum (DSS) technology
go on sale.
•T
 he first television program,
Computer Chronicles, is delivered via
the internet.
• Internet and commercial online
usage explode; the consumer online
segment jumps 64 percent to almost
15 million users, while about eight
percent of U.S. households are
hooked into the internet.
•T
 he first television station KOLD 13
uses a networked digital video server
in its daily on-air operations.
•T
 he Electronic Industries
Association’s Consumer Electronics
Group (CEG) becomes the Consumer
Electronics Manufacturers
Association (CEMA).
• Interactive cable modem trials with
consumers are started.
• Quad-speed CD-ROM drives become
a common feature of multimedia PCs.
• RDS pagers are introduced.
•T
 he first voice-recognition car
security systems are marketed.
•H
 ome office multi-function printers
(MFP) become popular.
•D
 igital satellite system (DSS)
installations reach the one million
milestone, making it the fastest
growing product in consumer
electronics history.
•C
 asio starts to sell the QV-10, the
first digital camera equipped with an
LCD screen.
•T
 he LaserDisc of Clear and Present
Danger with Harrison Ford is the first
home video release encoded with
Dolby Digital Surround AC-3.
132 Digital America 2017
1995
• Yahoo! search engine company
founded.
• JVC introduces Digital VHS (D-VHS)
standard.
• Norwegian Broadcasting
Corporation (NHK) launches first
DAB (Digital Audio Broadcast) digital
radio service.
• MPEG 2 digital video compression
technology is adopted.
• LG buys majority stake in Zenith, last
TV maker in the U.S.
• Microsoft releases Windows 95 PC
operating system.
• Sony starts selling the first two
MiniDV digital video camcorders.
• eBay, first online auction site,
founded by Pierre Omidyar, goes live.
• The Sony PlayStation, the first video
game system to use discs instead of
cartridges, goes on sale in the U.S.
• After extensive negotiations and
compromise of competing formats, a
single DVD standard is announced.
• The first digital camera to also
record video, the Ricoh RDC-1, is
announced.
1994
• The first mass market inkjet and
laser printers become available.
• Rollout of first nationwide push-
to-talk (PTT) cell phone network,
Motorola iDEN, begins.
• PowerPC and Pentium
microprocessor chips are
introduced.
• DirecTV, the first direct broadcast
system (DBS) receivers are
introduced and service launched.
• The first color consumer digital still
camera, the Kodak-developed Apple
QuickTake 100, goes on sale.
• Video game publishers propose
independent Entertainment Software
Ratings Board (ESRB) and videogame
rating system to Congress.
• The first cellular phone integrated
with a touchscreen PDA, the IBM
Simon Personal Communicator, goes
on sale.
1994
• Timex starts selling its Datalink,
the first “smart” watch that can be
wirelessly synced with a PC.
• Guidestar, the first factory-installed
in-car navigation system, announced
for 1995 Oldsmobile models.
• The first CES Mexico is held in
Mexico City.
• CompactFlash, the first successful
flash memory card format, is
announced by SanDisk.
• Netscape, the first commercial eb-
browser, announced.
• MPEG 2 digital video compression
technology is adopted.
• FCC begins auction of 1900 MHz
digital PCS bands for digital cell
phone service.
1993
• Unit sales of CDs surpass cassettes
to become dominant pre-recorded
music format.
• Fujitsu begins selling the first
plasma display screens, a 21-inch
monitor.
• Thomson’s CinemaScreen, first
widescreen 16:9 sets, are available
in the U.S.
• NCSA Mosaic 1.0, the first Web
browser, is released; the Web code
is released into the public domain
license-free.
• CERN releases WorldWideWeb
source code into the public domain,
triggering development of the Web.
• The Grand Alliance forms to develop
the HDTV system.
• Qualcomm’s Code Division Multiple
Access (CDMA) digital cellular phone
standard adopted in the U.S.
• Apple Newton MessagePad, the first
“Personal Digital Assistant” (PDA)
goes on sale.
• The FCC adopts a signal standard for
AM stereo broadcasting.
• Sony unveils video CD format,
followed a month later by a
competing Toshiba format, beginning
development of DVD.
• The U.S. secretary of defense opens
GPS for civilian use.
1992
• The Mobile Electronics Association
merges into the Consumer
Electronics Group of the Electronic
Industries Association (EIA).
• First VCRs with Gemstar’s VCR Plus+
programming aid appear.
• The first color picture videophone,
the AT&T VideoPhone 2500, is
available for $1,500.
• id Software releases Wolfenstein
3D, the first successful first-person
shooter video game.
• Philips announces Digital Compact
Cassette (DCC) as successor to
analog compact cassette.
• GSM, the first digital cellular phone
service, launches in Finland.
• Son launches digital MiniDisc as
replacement for analog cassettes.
• Radio Broadcast Data Service (RDS)
standard formalized in the U.S.
• The CEBus home automation
standard is finalized in the U.S
• The first camcorder with a color LCD
screen instead of a viewfinder, the
Sharp VL-HL1 LCD ViewCam, debuts.
• MP3 music compression coding
is integrated into the new MPEG-1
format.
1991
• Gary Shapiro is elected president and
CEO of CEMA.
• The Rodney King video, recorded by
George Holliday, becomes the first
viral video.
• The Kodak DSC-100, the first
commercially-available digital SLR
camera, goes on sale.
• U.S. testing of digital HDTV systems
begins.
• The first TVs with built-in closed-
caption display capability are
introduced in the U.S.
• V Tech starts selling its Tropez 900DX,
the first 900 MHz cordless phone.
• Tim Berners-Lee at CERN publicly
announces the World Wide Web.
1991
• The Consumer Electronics Group of
the Electronic Industries Association
(EIA) and the National Association of
Broadcasters (NAB) set AMAX and
AMAX Stereo standards for advanced
AM radio performance.
• Multimedia CD-ROM computer
systems are introduced.
• Apple’s QuickTime digital multimedia
compression software is released.
1990
• The Time Division Multiple Access
(TDMA) digital cell phone standard is
established.
• Sharp announces the first color fax
machines.
• First consumer all-digital camera,
the Dycam Model 1, aka the Logitech
Fotoman, announced.
• Sony’s CCD-TR1 8mm camcorder
becomes first device equipped with a
rechargeable lithium-ion battery.
• Congress passes legislation requiring
closed captioning decoders in all
color TVs 13-inches or larger and
manufactured after July 1, 1993.
• CERN researcher Tim Berners
Lee submits proposal describing
the “WorldWideWeb” as a “web” of
networked hypertexted documents;
the first Web page is published.
1989
• CERN computer scientist Tim
Berners-Lee writes “Information
Management: A Proposal” memo
that describes what becomes the
World Wide Web.
• The first handheld GPS device,
the Magellan NAV 1000, become
available.
• The first 16-bit video game systems,
NEC TurboGrafx-16 and the Sega
Genesis, debut in North America.
1988
• CD becomes more popular than vinyl
records.
• LCD front projectors are developed.
• Moving Pictures Expert Group
(MPEG) working group is formed by
Leonardo Chiariglione and Hiroshi
Yasuda.
• Eli Harari founds SanDisk in Milpitas,
CA.
• Yellow Book, defining Sony/Philips
CD-ROM standard, published.
• The first Hi8 8mm camcorders, the
Sony CCD-V99 and the Canon A1,
debut.
• Philips unveils the first improved
definition television (IDTV) TVs.
• The first mainstream electronic
organizer, the Sharp Wizard OZ-7000,
goes on sale.
• Taiyo Yuden’s That’s CD-R become
the first recordable CDs to go on
sale.
• Compaq unveils the SLT/286, the first
“modern” battery-powered laptop in
a clamshell form-factor with full VGA
display and a floppy disk drive.
• The first transatlantic fiber optic
cable is completed.
1987
• The movie theater experience moves
into the living room; Dolby Pro Logic
equipment becomes available for
consumers.
• The first HDTV system, NHK’s MUSE,
is demonstrated in Washington, D.C.
• Higher resolution VCRs and
camcorders are introduced (S-VHS
and ED-Beta).
• The compact disc video (CD-V) is
introduced.
• Thomson buys GE/RCA consumer
electronics business.
• FCC creates ACATS (Advisory
Committee on Advanced Television
Service) to choose American HDTV
standard.
• Digital European Cordless
Telecommunications (DECT) cordless
phone standard adopted.
Digital America 2017 133
 CHRONOLOGY: CT MILESTONES
1986
•P
 ioneering home theater projector
company Runco is founded in
Foster City, CA.
•T
 he first consumer video
telephone, the Mitsubishi
Lumaphone LU-1000, is marketed.
•T
 he first digital audio tape (DAT)
recorders are demonstrated.
•S
 tereo sound in television
broadcasting is available in all
major U.S. population centers.
•T
 he Radio Data Service (RDS)
begins in Europe.
•T
 rade magazine TWICE (This Week
in Consumer Electronics) founded.
•S
 crambling of satellite-fed cable
TV programming starts; the
sale of decoders and program
subscriptions to home dish owners
begins.
1985
• I nternet online services company
Quantum Computer Services, later
renamed America Online (AOL),
founded.
•M
 agellan NAV-1000, the first
portable GPS, ships.
•M
 itsubishi unveils first 35-inch TV
at Summer CES.
• Qualcomm founded in San Diego.
• Steve Jobs fired from Apple.
•N
 intendo releases its Nintendo
Entertainment System (NES)
video game platform, which
reinvigorates the videogame
industry.
•T
 he first Blockbuster video store
opens, in Dallas, TX.
•M
 icrosoft Windows v1.0 PC
operating system released.
• GE buys RCA.
134 Digital America 2017
1984
• The first color TVs with all-digital
signal processing circuitry are
marketed.
• First preliminary CD-ROM format
developed by Sony and Denon is
introduced.
• First working 3D printer is built by
Charles Hill of 3D Systems; first
competing “stereolithography”
patents filed.
• Federal courts break up AT&T.
• Kodak, GE and RCA announce first
8mm camcorders.
• The U.S. Supreme Court rules
home video taping legal.
• A pple’s Macintosh, the first home
computer with a graphic user
interface (GUI) goes on sale.
• Internet online service provider
Prodigy founded as Trintex.
• Research In Motion – BlackBerry –
co-founded by Mike Lazaridis.
• The Motorola DynaTAC 8000X,
the first commercially-available
cellular phone, goes on sale in
Chicago.
• RCA ends failed SelectaVision CED
phonograph-like videodisc project;
loses $580 million, which cripples
the company.
• The first working car CD player
system debuts at the Summer CES.
• Epson’s ET-10, aka Seiko T102, the
first portable color LCD TV, is sold.
1983
• 8mm video format standards are
set.
• Hi-Fi VCRs are introduced.
• The first camcorder, Sony
Betamovie, debuts.
• A pple’s Lisa, the first computer
using a graphical user interface
(GUI) and a mouse, is unveiled.
• Minneapolis-based music retailer
Sound of Music expands into video,
changes name to Best Buy.
• The first digital signal-processing
chip (DSP) is announced by Texas
Instruments.
• Casio TV-10, the first portable LCD
TV, a black & model with a 2.7-inch
screen, is sold.
• Cellular telephone service is
introduced in Chicago.
• Bill Gates unveils the Windows
operating system for PC.
1982
• Dolby Laboratories introduces
surround sound for home use.
• Advanced Television Systems
Committee (ATSC) is formed.
• The GSM cell phone standard is
established in Europe.
• The FCC allows market to define
AM stereo broadcast standard.
• The first rear-projection TV sets
(RPTV) are sold in the U.S.
• J VC introduces VHS-C videotape
format (first called UCM, then Mini-
VHS).
• Sony begins selling the CDP-101,
the first compact disc (CD) player,
in Japan.
• Time Magazine names the personal
computer as its “Man” of the Year,
the first non-human choice.

1981
• The first U.S. public demonstration
of HDTV is done by Japan’s NHK
network.
• RCA launches SelectaVision CED
phonograph-like videodisc.
• Osborne 1, first commercially
successful “portable” PC, goes on
sale.
• The first integrated PC mouse
introduced with the Xerox Star
workstation.
• The IBM PC, using Microsoft’s Disk
Operating System (MSDOS), is
introduced.
1980
• The Group 3 international fax
standard to ensure compatibility
with digital devices is established.
• Closed-captioning decoders are
sold.
• “Red Book” defining CD standard
released by Philips and Sony.
1979
• The first portable language
translators, the Lexicon LK-3000
and the Craig M100, are introduced.
• The Institute of High Fidelity
(IHF) merges into the Electronic
Industries Association (EIA).
• Sony introduces the Walkman
TPS-L2, the first personal music
player, in Japan.
• CompuServe, first consumer online
service, launches.
• VisiCalc (VISIble CALCulator), the
first spreadsheet program, goes on
sale.
1978
• The Winter Consumer Electronics
Show (CES) is held in Las Vegas for
the first time.
• The first internet computerized
bulletin board system goes live
Chicago.
• N AVSTAR, first satellite Global
Positioning System (GPS),
launches.
• Magnavox Magnavision VH-8000,
first laserdisc player, goes on sale.
1977
• A pple Computer introduces the
Apple II, the first mass market
personal computer.
• V idstar – aka VHS (Video Home
System) – a video cassette
platform, introduced by JVC at
Summer CES.
• Tandy announces the TRS-80, the
first mass-produced personal
computer.
• The RCA SelectaVision VBT-200,
the first VHS VCR, is introduced;
goes on sale in October.
• A ndre Blay of Magnetic Video
starts selling 50 movie titles it had
licensed from 20th Century Fox on
videocassette.
• The first interactive TV system,
QUBE, debuts.
• The first videocassette rental store,
George Atkinson’s Video Station,
opens in LA.
1976
• The inkjet printer, the IBM 4640, is
developed.
• A pple Computer is founded by
Steve Jobs and Steve Wozniak.
• The first microprocessor
videogame system, the
Fairchild Semiconductor Video
Entertainment System (VES), or
Channel F, goes on sale.
1975
• The first personal computer, the
Altair 8800, appears on the cover
of the January issue of Popular
Electronics.
• Microsoft is co-founded by Bill
Gates and Paul Allen.
• IBM’s 3800 Model 1, the first laser
printer, is introduced.
• The first Betamax VCR, the Sony
SL-6300, goes on sale.
• C.W. McCall’s “Convoy” released,
exemplifies height of 1970s CB
radio craze.
• The Atari Pong home video game is
introduced.
• Kodak’s Steve Sasson builds the
first digital camera.
1974
• International fax standard, Group 1,
established.
• Philips begins process to buy
Magnavox.
1973
• Optel and Gruen start selling the
first LCD watches.
• The first Winter Consumer
Electronics Show (CES) is held in
Chicago.
• Motorola executives Martin Cooper
and John Mitchel demonstrate the
first cell phone prototypes for the
media.
• PARC researcher Robert Metcalf
circulates “Alto Ethernet” memo that
describes how Ethernet will work.
• Advent VideoBeam 1000, the first
large-screen color projection TV,
goes on sale.
• Ethernet networking demonstrated
for first time.
Digital America 2017 135
 CHRONOLOGY: CT MILESTONES
1972
• Unit sales of color televisions pass
monochrome for the first time.
• Pulsar introduces the PS1, the first
all-digital watch.
• Magnavox starts selling the Ralph
Baer-designed Odyssey, the first
video game console.
• Motorola engineer Don Linder
sketches out schematic of the first
cell phone.
1971
• Electronic tuning is incorporated into
U.S. TVs.
• Busicom LE-120A, the first “pocket”
calculator, goes on sale.
• Sony introduces U-Matic VO-1600, the
first VCR and forerunner of Beta.
• Intel announces 4004 chip, the world’s
first microprocessor.
• RCA chairman David Sarnoff dies.
1970.
• IBM files patent for computer floppy
disk.
•A
 Swiss patent is issued to Hoffmann-
LaRoche in Switzerland for the first
practical LCD technology.
1969
• Kent State University scientist James
Fergason produces the first practical
LCD panels.
• The first digital clock radio, the Sony
Digimatic 8FC-59, aka “Digital 24,”
goes on sale.
• First quadraphonic four-channel
stereo tapes and players are
marketed.
• ARPANET, a forerunner of the
internet, becomes operational.
• Charged coupled device (CCD)
imaging chip is used in all future
digital cameras and camcorders
invented by Bell Lab physicists
William Boyle and George Smith.
• UCLA Professor Leonard Kleinrock
transmits first message over
ARPANET, forerunner of the internet.
136 Digital America 2017
1968
• First imported color TVs go on sale in
the U.S.
• The first dot matrix printer, the OKI
Wiredot, is introduced.
• KLH’s Model 40 reel-to-reel tape
deck, the first consumer device with
Dolby B noise reduction, is introduced.
• The Carterfone decision allows
consumers to connect equipment to
phones, allowing manufacturers to
market telephone answering devices.
• The first stable LCD panels are
developed and demonstrated by an
RCA team led by George Heilmeier.
• Intel founded in Santa Clara, CA, by
Gordon Moore and Robert Noyce.
• “Mother of All Demos” projecting
future of computing, including
hypertext, the computer mouse,
networking and graphic user interface
(GUI), is conducted by Douglas
Engelbart.
1967
• The first Consumer Electronics Show
(CES) is held in New York at the Hilton
and Americana Hotels.
1966
• Loral researcher Ralph Baer writes
paper laying out video game concept.
• James T. Russell of the Battelle
Institute files patent for “Analog
to Digital Optical Photographic
Recording and Playback System,”
forerunner of CD and DVD.
• RCA becomes first network to
produce all new shows in color.
1965
• Revenue from sales of color
televisions surpasses that of
monochrome for first time.
• Audiovox founded by John Shalam.
• The first commercial
telecommunications satellite, Early
Bird (Intelsat 1), is launched.
• Gordon Moore publishes paper
describing “Moore’s Law,” predicting
that the number of transistors on a
chip would double every year.
1965
• Computer scientist Ivan Sutherland
first describes the basic concepts of
would become virtual reality.
• Sony introduces the first portable
and home consumer video recorders.
• Eight-track audio players are
marketed for first time as option in
1966 model Fords.
• Ray Dolby develops Dolby A, the first
noise reduction system.
1964
• Sony engineer Koichi Tsunoda
proposes the videocassette.
• Bose founded by Amar Bose in
Framingham, MA.
• AT&T demonstrates the futuristic
Picturephone at the World’s Fair.
• The first plasma display is built by
Donald Bitzer, Gene Slottow and
Robert Willson at the University of
Illinois at Urbana-Champaign.
• The first commercial device with an
integrated circuit, the Zenith Arcadia
hearing aid, goes on sale.
1963
• Optical videodisc, the basis for
today’s laserdisc and DVD, is
demonstrated.
• LCD screen technology is suggested
for the first time in a report by RCA
researchers George Heilmeier and
Richard Williams.
• Stanford researcher Douglas
Engelbart builds the first computer
“mouse.”
• Charles Tandy buys majority stake in
Radio Shack for $300,000.
• First version of American Standard
Code for Information Interchange
(ASCII) is published.
• Nottingham Electronic Valve
Company demonstrates the Telcan
– television in a can – the first
videotape recorder designed for
home use.
• AT&T inaugurates Touch-Tone
service.
• Philips Electronics NV introduces the
compact audiocassette.
1962
• David Paul Gregg, an engineer at
3M, files patent describing “electron
beam” video recording on disc, which
becomes basis for LaserDisc.
• Congress passes All-Channel
Receiving Act requiring all-channel
tuning (UHF and VHF) in television
receivers.
• The Telstar 1 communications
satellite relays the first trans-
Atlantic television signal – a baseball
game between the Philadelphia
Phillies and the Chicago Cubs from
Wrigley Field.
• Dr. Nicholas Holonyak, Jr., at GE
demonstrates the first visible LED.
1961
• Lutron Electronics Company
founded by Joel and Ruth Spira in
Coopersburg, PA.
• FM Stereo radio broadcasting begins.
1960
• The first telephone-answering
device, the Ansafone from Phonetel,
goes on sale.
• First imported TVs go on sale in the
U.S.
• Dr. Theodore Maiman builds the first
working laser.
• Echo, the first communications
satellite, launches.
1959
• Jack Kilby of Texas Instruments
files patent for integrated circuit;
considered co-inventor with
Fairchild’s Robert Noyce.
• Philco Safari, first all-
transistorized battery-powered
portable TV, announced.
• Robert Noyce of Fairchild
Semiconductors files patent for the
integrated circuit; considered co-
inventor with TI’s Jack Kilby.
• Bonanza, the first television show
produced in color, premiers.
• The Xerox 914, the first plain-paper
Xerox copier, is introduced.
• Union Carbide engineer Lew Urry
invents the consumer alkaline
battery.
1958
• Hi-Fi stereo components for the
home become a mainstream CE
category at retail for the first time.
• AT&T introduces the first
commercial “modem,” the Bell
101, for the SAGE military radar
computer.
• The first consumer stereo
headphones, Koss SP/3, become
available.
• First stereo record, Johnny Puleo
and His Harmonica Gang, on the
Audio Fidelity label, released.
• The FCC creates the Citizens Band
(CB) radio service.
• Jack Kilby gives first demonstration
of the integrated circuit.
• Brookhaven National Labs
researcher Willy Higinbotham
publicly demonstrates a two-player
tennis game on an oscilloscope, the
first video game.
1957
• K LH co-founded by Henry Kloss in
Cambridge, MA.
• The RETMA (Radio Electronics
Television Manufacturers
Association) changes its name
to the EIA (Electronic Industries
Association).
• Fairchild Semiconductor,
pioneering chip designer and
maker, founded.
1956
• The black-and-white portable TV
era begins.
• The first transistorized stereo
receivers comes on the market.
• A mpex introduces the first
commercial videotape recorder,
the Mark IV, at the NAB show in
Chicago.
• The first transatlantic telephone
cable becomes operational.
• The computer hard drive, IBM 305
RAMAC (Random Access Method
of Accounting and Control), is
announced.
1955
• Bell Labs completes TRADIC
(TRAnsistorized DIgital Computer)
first all-transistorized computer,
without vacuum tubes.
• The first consumer microwave
oven, a Tappan version of the
Raytheon Radarange, is introduced.
1954
• A nnual sales of TV sets surpass
radios for the first time.
• NBC broadcasts the Tournament of
Roses Parade, the first nationwide
color broadcast.
• Dr. Narinder Kapany describes
optical fiber cable in scientific
journal Nature; later coins term
“fiber optics,” develops cables and
becomes known as “Father of Fiber
Optics.”
• Regular color TV broadcasting
begins.
• RCA begins mass production of CT-
100 color TVs, priced at $1,000, the
price of a new car.
• The first transistor made from
silicon is developed.
• First acoustic suspension speaker,
Acoustic Research AR-1, introduced
at New York Audio Fair.
• The Regency TR-1, the first mass-
market transistor “pocket radio,” is
introduced at $49.95.
1953
• Harman Kardon, which evolves into
Harmon International, founded by
Sidney Harman and Bernard Kardon.
• RTMA changes its name to RETMA
(Radio Electronics Television
Manufacturers Association).
• First prototype transistorized
computer demonstrated at
Manchester University.
• FCC accepts RCA-based NTSC-
compatible color TV standard.
• The first color TVs, a 15-inch Admiral
C1617A ($1,175), are sold at retail.
Digital America 2017 137
 CHRONOLOGY: CT MILESTONES
1952
• British radar engineer Geoffrey
Dummer introduces the concept of
the integrated circuit.
• UHF TV broadcasts are authorized.
• The first transistorized device, the
Sonotone 1010 hearing aid, goes on
sale.
1951
• U.S. Supreme Court upholds FCC
decision on CBS color TV standard.
• UNIVAC first used by U.S. Census
bureau.
• CBS broadcasts first color TV
program, the “Premiere” variety show.
• President Harry Truman inaugurates
first transcontinental TV broadcast.
• RCA demonstrates its all-electronic
color TV system.
• The first direct-dialed long distance
telephone call is made between
the mayors of Englewood, NJ, and
Alameda, CA.
• John T. Mullin, working for Bing
Crosby’s Labs, conducts first
demonstration of video recording on
magnetic tape on an altered audio
tape recorder.
1950
• RMA changes its name to RTMA
(Radio-Television Manufacturers
Association)
• CBS conducts first public
demonstration of color TV in
Washington, D.C. for FCC.
• FCC approves CBS-developed color
TV standard.
1949
• Al Gross invents wireless telephone
pagers, first used by New York Jewish
Hospital.
• The first consumer stereo tape
recorders and first pre-recorded
reel-to-reel tapes go on sale.
• First-ever network TV broadcast
made on KDKA Pittsburgh, part of
DuMont network.
• First commercial 45 RPM record
released, Texarkana Baby by Eddy
Arnold.
138 Digital America 2017
1948
• T V set sales increase more than 500
percent compared to 1947 sales.
• The first Citizens Band radios go on
sale.
• Emerson Radio founded in
Hackensack, NJ.
• Ampex Corp. presents the first
commercially available magnetic tape
recorders, the model 200A, to Bing
Crosby’s chief engineer Jack Mullin.
• Cable television begins as Community
Access Television in Mahanoy City, PA.
• 33-RPM vinyl LP records, invented by
Peter Goldmark, are introduced by
Columbia Records.
• The prototype Manchester “Baby”
becomes the first computer to run a
stored program.
• In the July issue of The Bell System
Technical Journal, Dr. Claude E.
Shannon publishes “A Mathematical
Theory of Communication,” which
lays out the basic concepts of digital
communication.
• A 1,047-page microfilm version of
Gone with the Wind is transmitted
electronically to the Library of
Congress in around two minutes.
1947
• LG Corp. founded in Seoul, South
Korea, by Koo In-Hwoi.
• Edwin Land first demonstrates his
instant film camera, the Polaroid.
• Grace Murray Hopper coins the term
“bug” to describe a computer fault.
• Bell Labs researcher Douglas
H. Ring writes memo describing
cellular telephone system.
• William Shockley, John Bardeen and
Walter Brattain invent the transistor
at Bell Telephone Laboratories.
1946
•J
 BL founded by James Bullough
Lansing in Northridge, CA.
•K
 lipsch is founded by Paul W. Klipsch
in Indianapolis, IN.
•T
 he first electronic computer, ENIAC,
is demonstrated.
•S
 ony founded by Masaru Ibuka and
Akio Morita.
•J
 ohn Mullin demonstrates improved
German-made Magnetophon
magnetic tape recorders at the
annual Institute of Radio Engineers
(IRE) conference in San Francisco.
•T
 he first mobile telephone service
begins in St. Louis.
1945
• The FCC allocates Citizens Band
Radio frequencies.
• Arthur C. Clarke proposes a
geosynchronous communications
satellite system in space where these
satellites orbit. Twenty years later it is
dubbed the “Clarke Belt” in his honor.
• U.S. War Production
Board ends wartime ban of
the manufacture of consumer
radio and television equipment.
1944
• Ampex founded by Alexander
Poniatoff.
1942
•T
 he first all-electronic digital
computer, Atanasoff-Berry
Computer (ABC), is completed.
•T
 he first stereo tape recordings are
made by Helmut Kruger at German
Radio in Berlin.
•A
 ll radio and television equipment
production banned during World
War II.
•H
 edy Lamarr and George Antheil
granted frequency hopping patent.
1941
• Commercial FM operation begins.
• On radio “Moving Day,” following
adoption of the North American
Radio Broadcasting Agreement, 80
percent of North America’s AM
frequencies are reassigned to new
channels.
• Galvin Manufacturing/Motorola
begins mass production of the
“Handie-Talkie” SCR-536, the first
mass-produced walkie-talkie.
• The FCC adopts the NTSC standard
and commercial monochrome TV
broadcasts begin.
1940
• Radio sets reach 80.3 percent
household penetration rate in the U.S.
• CBS conducts first demonstrations
of all-electronic color television.
1939
• The first experimental FM stations
go on air.
• David Hewlett and William Packard
establish their company in a Palo
Alto garage, founding Silicon Valley.
• Television is introduced at the New
York World’s Fair with speech by
David Sarnoff.
• RCA broadcasts President Franklin
D. Roosevelt’s opening speech from
World’s Fair.
• RCA, GE, DuMont, Philco and two
other companies sell the first
television sets in several New York
City stores for between $199.50 to
$1,000; RCA begins first regularly
schedule TV programming.
1938
• Konrad Zuse invents and builds the
first binary computer.
• Pioneer Electronics founded in
Tokyo.
• S amsung founded by Lee Byung-
chul in Daegu, Japanese Korea.
• Herman Anthony of Rayovac files
patent for first leakproof consumer
battery.
1937
• John Atanasoff begins work on
the first electronic computer,
completed in 1939.
• Chester Carlson files preliminary
patent for “electrophotography”
aka xerography, 22 years later
the first commercial Xerox Corp.
photocopy machine is introduced.
• FCC allocates 18 channels for TV
operation.
1936
• Altec Lansing founded by James
Bullough Lansing in New York City.
• The Berlin Olympics are televised,
viewed by an audience of 150,000
over two weeks in “television
rooms” across Berlin and in the
Olympic Village.
1934
• The International Electrotechnical
Commission establishes technical
committee TC 23 in the first
attempt to standardize global
electric outlet and jack standards.
• The Federal Communications
Commission (FCC) is established.
1933
• Edwin Howard Armstrong files
patent for FM radio. (1/24)Howard
Armstrong patents FM radio.
•G
 uglielmo Marconi opens first
microwave radio link between Vatican
and pope’s summer residence.
• Howard Armstrong patents FM radio.
1932
• The Emerson Model 25, the first
“compact” table radio, goes on
sale.
1931
• Radio U.S. household penetration
passes telephone penetration.
• “Binaural,” better known as stereo
recording, is invented separately by
Alan Blumlein in England and A.C.
Keller of Bell Labs.
• DuMont Laboratories founded by
Allen B. DuMont in Upper Montclair,
NJ.
• Thomas Edison dies; lights dimmed
around the world in tribute.
1930
• I.G. Farben AG develops magnetic
plastic audio recording tape in
Germany.
• Galvin Manufacturing unveils
“Motorola,” a combination of
“motor vehicle” and “victrola”, the
first car radio, at the annual RMA
convention in Atlantic City, NJ.
• First TV is demonstrated at the
annual RMA convention in Atlantic
City.
1929
• AT&T engineers Lloyd Espenschied
and Herman Affel file patent for
“concentric conducting system” –
aka coaxial cable.
• RCA purchases Victor Talking
Machine Company and becomes
RCA Victor.
1928
• RMA adopts patent interchange
agreement to allow member
manufacturers to share minor
radio patents and end litigation.
• First commercial licensed TV
station, W3XK in Washington, DC,
owned by Charles Francis Jenkins
starts broadcasting.
• John Logie Baird first
demonstrates color television.
• Galvin Manufacturing – Motorola –
founded.
Digital America 2017 139
 CHRONOLOGY: CT MILESTONES
1927
• Broadcast of Rose Bowl on NBC
first coast-to-coast radio hookup.
• AT&T establishes commercial
transatlantic telephone service
between North America and Europe.
• Russian Boris Rtcheouloff applies
British patent for magnetic video
recording.
• Philo Farnsworth applies for a
patent on his electronic television.
• The Federal Radio Commission,
the forerunner of the FCC, is
established, as part of the Radio
Act of 1927.
• Bell Telephone Laboratories
demonstrates wireless TV between
Washington, DC, and New York City
featuring speech by Commerce
Secretary Herbert Hoover.
• Philo T. Farnsworth demonstrates
all-electronic television.
• JVC founded in Yokohama, Japan.
1926
• Zenith introduces AC-powered radio
receivers.
• President Calvin Coolidge sends
message of encouragement to RMA
Convention in Atlantic City.
• John Logie Baird files British patent
for mechanical recording video on a
phonograph disc.
• NBC, first national radio network,
goes on the air.
• Kenjiro Takayanagi demonstrates
all-electronic cathode ray TV system
using Nipkow disk in Japan.
1925
• Annual sales of radios top three
million units and $500 million, more
than double the previous year.
• Victor Talking Machine begins selling
first AC-powered phonographs and
radio/Victrola combinations.
• The first electrically recorded
phonograph records are released.
• Bell Labs, which would become the
world’s largest industrial research
lab, begins operations in NYC.
140 Digital America 2017
1925
• Vladimir Zworykin files for a color TV
patent.
• RCA introduces the Radiola 30, the
first mass-produced radio designed
to run only on AC power, from a
lighting socket.
• John Logie Baird produces a TV
picture of human faces.
1924
• Western Electric Co. patents Westrex,
its electrical sound recording.
•Z
 enith Electronics Corp. produces
the first portable radio.
•A
 T&T experiments with a radio car
telephone.
•T
 he Radio Manufacturers Association
(RMA), the predecessor of the
Electronic Industries Association and
CTA, is founded in Chicago.
•U
 .S. Senate votes down 10 percent
tax on radios; pressure from newly-
formed RMA cited.
•H
 erbert H. Frost elected first
president of RMA.
•W
 eek-long inaugural Radio World’s
Fair with more 182 exhibitors,
attracts 175,000 attendees including
Thomas Edison and Nikola Tesla, at
Madison Square Garden.
1923
•T
 he first radios using Edwin
Armstrong’s superheterodyne
technology, the Radiola
Superheterodyne (AR-812) and the
Radiola Super-VIII (AR-810), are
released by RCA.
•T
 he National Association of
Broadcasters (NAB) is formed.
•R
 CA introduces the Radiola IX, the
first radio receiver integrated with a
phonograph player.
•T
 he first experimental transatlantic
radio broadcast is made between
KDKA Pittsburgh and BBC in London.
•A
 complete TV system including
kinescope, or picture tube, is
demonstrated by Westinghouse
researcher Dr. Vladimir K. Zworykin,
who then applies for a patent for an
electronic TV system.
1922
• Commerce Secretary Herbert
Hoover bans all non-licensed,
amateur radio broadcasting.
• Utah farm boy Philo T. Farnsworth
describes an electronic TV system
to his chemistry teacher; the sketch
later proves Farnsworth’s television
patent priority claim.
• Radio Dealer, the first consumer
electronics retailer trade magazine,
launches.
• Telephone service is silenced for one
minute to commemorate the death of
Alexander Graham Bell.
• RCA introduces the Radiola IV, the
self-contained single-cabinet tube
radio with a built-in speaker and the
first “modern” radio.
1921
• The Czech play, “R.U.R,” (Rossum’s
Universal Robots) by Karel Capek,
premieres, and introduces the word
“robot.”
• More than 6,000 attend first New
York amateur radio show at the
Pennsylvania Hotel, run by the
“Second District Executive Radio
Council.”
• Westinghouse Ariola Sr. is the first
mass-produced tube-based radio
available.
• RCA introduces the “Radiola” brand
name.
• More than 3,000 attend the first
National Radio Exhibition, the first
radio retail and manufacturer
trade convention, in Chicago at
the Broadway Armory, run by the
American Radio Relay League
(ARRL).
1920
• The Joseph Horne department
store in Pittsburgh runs an ad in
the Pittsburgh Sun for ready-made
$10 “wireless telephone” radio
sets, the first CE retail ad.
• K DKA Pittsburgh and WWJ Detroit
broadcast presidential election
returns.
• Westinghouse RA and DA, first
mass produced radio receivers
designed for home use, debut.
1919
• Chicago Radio Laboratory – Zenith
– founded in Chicago by Karl Hassel
and Ralph Mathews.
• Edwin Howard Armstrong files
patent for the superheterodyne radio
receiver, still the basic technology for
all radios.
• The ban on amateur radio reception
is lifted.
• Edwin Howard Armstrong files
patent for FM radio.
• First issue of Radio News magazine,
founded by Hugo Gernsback,
appears.
• The amateur radio transmission ban
is lifted.
• Frank Conrad begins regularly
scheduled phonograph concert
broadcasts.
• The Radio Corporation of America
(RCA) that combines competing radio
patents and companies is founded.
1918
• Zenith Electronics founded as
Chicago Radio Labs by Ralph
Matthews and Karl Hassel.
• Matsushita Electrical Company –
Panasonic – founded by Kōnosuke
Matsushita.
1917
• U.S. Navy assumes control of all
domestic radio broadcasting.
1916
• American Automobile Accessories
Company, later Crosley Radio,
founded.
• Pittsburgh and Westinghouse
engineer Frank Conrad begins
broadcasts from his garage under a
special experimentation license from
the U.S. Navy.
1915
• First U.S. patent for three-prong
grounded electrical outlet filed by
G.P. Knapp, an engineer with Harvey
Hubbell Inc.
• The first transcontinental phone call
and the first transatlantic radio voice
transmission are made.
1913
• Edouard Belin invents the
Belinograph, the first modern fax
machine, which uses a photo cell
for scanning and ordinary phone
lines for transmission.
• Edwin Howard Armstrong files
patent for regenerative circuit,
greatly boosting radio signal power.
1912
• Consumer battery sizes are
standardized by American
Electrochemical Society, accepted by
National Bureau of Standards in 1919.
• The Institute of Radio Engineers
forms.
• Sharp Corp. founded in Tokyo, Japan.
1911
• Magnavox founded by Peter
Laurtis Jensen and Edwin Pridham
as Commercial Wireless and
Development Company.
1910
• L ars and Hilda Ericsson
experiment with a car telephone
using long poles to connect to
overhead telephone wires.
• Lee de Forest arranges first public
radio broadcast.
1908
• Double-sided records go on sale
for first time.
• W illiam Howard Taft and William
Jennings Bryan become first
presidential candidates to record
speeches.
• A .A. Campbell-Swinton in England
describes television using cathode
ray tube and electromagnetic
scanning.
1907
• Russian Boris Rosing files patent
on television image reproduction
methods using cathode ray tube
and mechanical Nipkow wheel.
• V ictrola phonograph, gramophone
with built-in instead of exposed
horn, is introduced.
1906
• Lee De Forest granted patent for
audion tube, first electronic amplifier
and foundation of all radio receivers.
• On Christmas Eve, Reginald
Fessenden becomes first DJ,
transmits voice and music via radio.
1905
• Spanish engineer Leonardo Torres-
Quevedo uses a radio remote
controller to operate a boat more
than a mile away.
• John Ambrose Fleming granted a
patent for the vacuum tube.
1903
• Thomas Edison electrocutes Topsy
the elephant, last gasp in “War of
the Currents.”
• Harvey Hubbell II files patent for
two-pin jack, the first detachable
electric plug, that later becomes
U.S. AC outlet connection standard.
• Enrico Caruso recordings on
Victor’s Red Seal Records label
featuring “His Master’s Voice” logo
go on sale.
1902
• Arthur Korn develops
“telephotography,” the first practical
fax machine using selenium
cells to deconstruct pictures into
components, then reconstructs
them at the receiving end.
• Atwater Kent Mfg. Works founded
in Philadelphia.
1901
• Eldridge R. Johnson merges his
Consolidated Talking Machine
Company with Berliner’s Gramophone
Company to create the Victor Talking
Machine Company, predecessor of
JVC and RCA, in Camden, NJ. Johnson
registers “His Master’s Voice”
trademark logo featuring “Nipper”.
• Guglielmo Marconi transmits the
first transatlantic wireless telegraph
message.
Digital America 2017 141
 CHRONOLOGY: CT MILESTONES
1900
•T
 wo German scientists, Johann
Elster and Hans Geitel, invent the first
practical photoelectric cell.
• George Blickensderfer files patent for
the first practical electric typewriter,
manufactured in 1902.
• Constantin Perskyi coins the word
“television”.
• Reginald Fessenden makes first
wireless radio voice transmission.
1899
• Waldmar Jungner patents the nickel-
cadmium battery.
• Valdemar Poulsen files first patent for
the wire recorder, the “telegraphone,”
in use until the magnetic tape recorder
developed just after World War II.
• The first ship-to-shore wireless
message in U.S. history is sent.
1898
•E
 ldridge R. Johnson patents the first
mechanical gramophone.
•N
 ikola Tesla files for radio remote
control patents.
1897
• German scientist Karl Ferdinand
Braun constructs the first cathode ray
tube scanning device, a technology
still in use today in TVs and computer
monitors.
• British physicist Joseph Thomson
announces the discovery of a particle
smaller than the atom, later identified
as the electron.
• Guglielmo Marconi files first patents
for wireless in Britain and the U.S.
1896
•G
 uglielmo Marconi demonstrates
radio publicly in England.
142 Digital America 2017
1895
• Russian physicist Alexander S. Popoff
demonstrates first primitive radio,
Guglielmo Marconi sends and receives
wireless signals in Italy (summer).
•C
 hapman Receptacle, first widespread
electrical wall outlet, patented by
Frederic A. Chapman.
•N
 iagara Falls polyphase AC power
plant begins operation.
1894
•G
 E engineer and mathematician
Charles P. Steinmetz files patent for
“system of distribution by alternating
currents,” laying groundwork for AC
power transmission.
•F
 irst phonograph records released,
seven-inch hard rubber discs, by Emile
Berliner’s Washington, D.C.-based
United States Gramophone Company.
1893
• Nikola Tesla describes and
demonstrates the basics of radio; later
he is awarded patent supremacy over
Marconi.
• Columbian Exhibition World’s Fair
in Chicago first to be electrified (by
Westinghouse using Tesla AC system)
and the first public demonstrations of
new electrical systems and devices.
1892
• General Electric co-founded by Thomas
Edison.
1891
• Nikola Tesla files patent describing
induction, or Tesla coil, which produces
high voltage at high frequency.
• Philips Electronics founded by Frederik
and Gerard Philips.
1889
• William Dickson make a sound
“motion picture” for Thomas Edison
with a phonograph synchronized
with a Kinetoscope, called “kineto-
phonograph.”
1888
• Heinrich Hertz detects and produces
radio waves.
• Austrian botanist Frederich Reinitzer
discovers liquid crystals, named a
year later by German physicist Otto
Lehmann.
• Thomas Edison, promoter of DC
power, publishes 84-page “A
WARNING!” pamphlet, launching
decade-long “War of the Currents”
against Westinghouse and AC.
• Emile Berliner applies for a patent on
the flat phonograph disc.
• The earliest musical recording,
Handel’s “Israel in Egypt,” is recorded
on a paraffin cylinder.
• George Eastman co-founds Eastman
Kodak in Rochester, NY.
• Oberlin Smith describes a magnetic
sound recording system, a forerunner
of the magnetic tape recording
system.
• Nikola Tesla granted patents for first
AC induction motor and polyphase AC
system.
1887
• Emile Berliner patents the
gramophone, the first record player.
• Carl Gassner patents first “dry”
battery cell, the forerunner of the
modern battery.
1886
• Westinghouse Electric Company
founded by George Westinghouse.
• William Stanley demonstrates high
voltage AC transmission via connected
transformers.
• Westinghouse begins operation of first
AC power plant at Buffalo, NY.
1884
• Paul Nipkow patents a scanning disc
for the first mechanical television.
1883
• The first overhead wired electric
lighting system goes into service in
Roselle, NJ.
• Thomas Edison patents the Edison
Effect, which later developed into the
vacuum tube by Lee de Forest.
1882
•L
 ondon architect Thomas Tayler Smith
receives British patent describing
household electrical wiring, cables
and outlets.
•T
 homas Edison inaugurates Pearl
Street Station in Manhattan, the first
electric power station.
1879
• Thomas Edison invents the
incandescent light bulb.
1877
•E
 mile Berliner and Thomas Edison
file competing patents for carbon
microphone to improve telephone
voice quality.
•F
 rench Poet Charles Cros proposes
recording sound on flat disc.
•T
 homas Edison invents the
phonograph.
•T
 homas Edison suggests greeting
telephone callers by saying “hello.”
1876
•A
 lexander Graham Bell files and
receives a U.S. patent for the
telephone; makes “Mr. Watson, come
here, I want you” call.
•C
 harles Brush granted patent for arc
lighting system.
1873
• James Clerk Maxwell publishes
“A Treatise on Electricity and
Magnetism,” which forms the basis for
modern physics.
1872
• Thomas Edison patents an electronic
typewriter, the prototype for later
teletype machines.
1866
• The trans-Atlantic telegraph cable
is successfully laid and put into
operation.
1865 1820
• James Clerk Maxwell publishes • Dutch physicist and chemist
“A Dynamical Theory of the Hans Christian Ørsted discovers
Electromagnetic Field,” which electromagnetism.
connects electromagnetism and light.
1821
1863
• Michael Faraday builds the first
• Giovanni Caselli receives a U.S. patent electric motor.
for the fax machine based on Bain’s
ideas called the “pantelegraph”.
Service between Paris and Lyons, 1800
France, operates between 1865 and • Alexandra Volta invents the first
1870, but the Franco-Prussian War battery.
ends the experiment.
1752
1857 • Benjamin Franklin demonstrates
• French Scientist Leon Scott de lightning is electricity.
Martinville demonstrates rudimentary
sound recording technology using
soot-covered paper cylinders. 1729
• English physicist Stephen
Gray discovers and demonstrates
1844 electrical conductivity.
• Samuel F.B. Morse sends the
telegraph message: “What hath God
wrought?” 1663
• German physicist Otto von Guericke
invents a primitive static electricity
1840 generator.
• Alexander Bain proposes a fax
machine that uses synchronized
pendulums to scan an image at the 1642
transmitting end and send electrical • Blaise Pascal invents the first
impulses to a matching pendulum at practical mechanical calculator, built
the receiving end to reconstruct the in 1645.
image. He builds the first fax machine
in 1843.
1600
• English scientist William Gilbert coins
1831 the word “electric,” a modification of
• Joseph Henry builds the first the Greek and Latin words for amber.
electromagnetic motor, a forbearer of
the DC motor.
585 BC
• Michael Faraday converts mechanical
energy into electrical energy, • Thales of Miletus in ancient Greece
discovers electromagnetic induction. rubs amber on a piece of fur and
discovers static electricity.
1827
For more information, visit CTA.tech
• Georg Simon Ohm determines a
formula of electrical flow through
wire, creating Ohm’s Law.
1822
• Charles Babbage presents paper to
Royal Society proposing the Difference
Engine, the first – albeit enormous –
calculator.
Digital America 2017 143
 INDUSTRY SOURCES
RELATED
INDUSTRY
SOURCES
VR/AR Association (The VRARA) thevrara.com
Advanced Television Systems Committee (ATSC) atsc.org
American National Standards Institute (ANSI) ansi.org
AirFuel Alliance AirFuel.org
Association for Unmanned Vehicle Systems International
auvsi.org
Association of American Publishers publishers.org
Association of Home Appliance Manufacturers (AHAM)
aham.org
Association of Loudspeaker Manufacturing and
Acoustics International almainternational.org
Audio Publishers Association audiopub.org
Auto Care Association autocare.org
Blu-ray Disc Association (BDA) blu-raydisc.com
Broadband Forum broadband-forum.org
BSA | The Software Alliance bsa.org
Business Technology Association bta.org
Cable & Telecommunications Association for Marketing
(CTAM) ctam.com
CompTIA Comptia.org
CTIA - The Wireless Association ctia.org
Consumer Technology Association (CTA) CTA.tech
Continental Automated Buildings Association (CABA)
caba.org
CTA SmartBrief smartbrief.com/subscribe
Custom Electronic Design & Installation Association
(CEDIA) cedia.net
The DEG: Digital Entertainment Group degonline.org
Digital Living Network Alliance (DLNA) dlna.org
Digital Media (DiMA) digmedia.org
Electro-Federation Canada (EFC) electrofed.com
Electronic Components Industry Association (ECIA)
ecianow.org
Electronic Frontier Foundation (EFF) eff.org
Electronics Representatives Association era.org
Entertainment Merchants Association (EMA) entmerch.org
Entertainment Software Association (ESA) theesa.com
Global Virtual Reality Association gvra.com
The Imaging Alliance theimagingalliance.org
Industrial Designers Society of America (IDSA) idsa.org
144 Digital America 2017
Institute of Electrical & Electronics Engineers, Inc. (IEEE)
ieee.org
Internet Alliance internetalliance.my
The Internet Association (The IA) internetassociation.org
International Auto Sound Challenge Association Inc.
(IASCA) iasca.com
International Telecommunication Union (ITU) itu.int
IPC - Association Connecting Electronics Industries ipc.org
It Is Innovation (i3) CTA.tech/i3
JEDEC jedec.org
MEMS Industry Group (MIG) memsindustrygroup.org
MIDI Manufacturers Association midi.org
Mobile Electronics Association (MEA) join-mea.com
Motion Picture Association of America (MPAA) mpaa.org
Music Business Association musicbiz.org
Music Innovation Consumers (MIC) Mic-coalition.org
National Association of Broadcasters (NAB) nab.org
National Association of Manufacturers (NAM) nam.org
National Association of Music Merchants (NAMM)
namm.org
National Electrical Manufacturers Association nema.org
National Electronics Service Dealers Association (NESDA)
nesda.com
National Office Products Alliance nopanet.org
National Retail Federation nrf.com
National Venture Capital Association nvca.org
NCTA - The Internet & Television Association ncta.com
North American Retail Dealers Association (NARDA)
narda.com
Radio Advertising Bureau (RAB) rab.com
Recording Industry Association of America (RIAA) riaa.com
Reverse Logistics Association rla.org
Satellite Broadcasting and Communications Association
(SBCA) sbca.com
Satellite Industry Association sia.org
SEMI semi.org
Semiconductor Industry Association (SIA)
semiconductors.org
Small UAV Coalition smalluavcoalition.org
Software & Information Industry Association (SIIA) siia.net
Specialty Equipment Market Association (SEMA) sema.org
Telecommunications Industry Association (TIA)
tiaonline.org
Television Bureau of Advertising tvb.org
Toy Association Inc. toyassociation.org
Underwriters Laboratories Inc. (UL) ul.com
Video Advertising Bureau thevab.com
WiFiForward Coalition wififorward.org
Wireless Infrastructure Association (WIA) wia.org
World Electronics Forum (WEF) wefonline.org