Vizio launches $99 Google TV set-top box

Dan Rayburn of StreamingMedia.com reports that Vizio's new Google TV-based Stream Player will ship in the first half of 2012, and will be priced at $99 (U.S.). According to Rayburn, the set-top box will only be sold directly by Vizio from its website, but I don't expect that to last--Vizio sells too much product through resellers such as Costco for the company to ignore that channel.

The VAP430 Stream Player uses the new ARM-based Google TV architecture, and Vizio has reskinned Google TV's user interface. It will have HDMI in and out (so it can be connected to a receiver or A/V amplifier in-line with another set-top box or other device without taking up an additional HDMI port), Ethernet and Wi-Fi interfaces, and a USB port that can be used to connect an external hard disk (only for playing, not recording, audio and video). It will also come with a universal remote control with both IR and Bluetooth outputs. The device will support 1080P video in and out, and Vizio claims that the device will have sufficient bandwidth to support 3D streaming.

Vizio has confirmed that the Stream Player will support Netflix, Amazon Instant Video, Hulu Plus, HBO Go (for existing HBO subscribers), YouTube, Pandora, Technicolor's new M-GO streaming video service, and others. Additional services will be announced by the time the device ships.

On paper, Vizio has hit all the right notes: The Stream Player will be priced competitively with Apple and Roku, it will run a more polished version of Google TV, and it can be connected in-line with the user's existing cable, satellite or IPTV set-top box, instead of requiring a separate HDMI connection. It remains to be seen how well the device works when it gets into the hands of consumers, and whether Google and Vizio have smoothed out the many rough spots in Google TV's user interface. If it works well, it'll help put Google TV back into the thick of the over-the-top set-top box competition.

Consumer electronics' U.S. renaissance

There was a time, before World War II, when the U.S. was the undisputed world leader in consumer electronics. U.S. manufacturers, led by RCA, dominated world markets. However, U.S. manufacturers' operations in Japan and most of Europe were nationalized at the start of WWII. More importantly, RCA discounted the value of transistors in consumer electronic design after the war. Japanese manufacturers licensed transistor technology from Bell Labs and used it to build smaller, less expensive and more reliable products. That spelled the beginning of the end for the U.S. consumer electronics business.

At one time, companies like RCA, Westinghouse, Zenith, Philco, Magnavox, Sylvania and Motorola were household names. Now, only Motorola is still in consumer electronics, with its mobile phones. RCA, Westinghouse and Sylvania are nothing more than trademarks licensed to other companies, Zenith was acquired by South Korea's LG Electronics, and Philco & Magnavox were acquired by Philips. Until the late 1990s, the U.S. consumer electronics business was effectively dead. Today, however, there's a resurgence in U.S. consumer electronics.

The leader of this renaissance is Apple, which has dominated the personal media player market for almost a decade with its iPods. Foreign manufacturers have tried to wrestle market share away from Apple's iPods, without success. As of last quarter, Apple became the world's largest seller of smartphones, and it's been the leader in tablets since the launch of the iPad. Apple also dominates music sales through iTunes. Apple TV is Apple's only consumer electronics product that's struggling in the marketplace (although no one in the over-the-top set-top box market has yet found a winning formula.)

Apple doesn't manufacture any of its hardware products; it designs the products and farms out manufacture to Chinese and Taiwanese manufacturers. Vizio has applied the same formula to HDTVs, and either leads the market for LCD HDTVs or is close to the top every quarter. Vizio's aggressive pricing strategy has helped to force Sony out of the TV manufacturing business, and is pushing other Japanese and South Korean manufacturers to rethink their HDTV market strategies.

Sonos came from nowhere to become the leader in wireless networked home audio systems. Sonos applies an Apple-like design philosophy to its products, and has steadily expanded its product line both up and down to cover a variety of price points. Roku licensed a streaming media player originally developed in-house at Netflix and has become the leader in the market for those devices, at very aggressive price points: When Logitech launched its Google TV-based Revue set-top box at $299, the least expensive Roku player was $59.99. Now, the price of the Revue has been cut to $99 (the same price as Roku's top-of-the-line model) in order to clear out an apparently massive inventory of the devices.

It's true that U.S. companies are nowhere near recapturing the share of the consumer electronics market that they had before the 1970s, but if anyone had predicted any resurgence of U.S. consumer electronics companies even ten years ago, they'd have been laughed out of the room. The ability to anticipate (and drive) consumer desires, together with leveraging Chinese and Taiwanese manufacturing resources, is allowing U.S. companies to compete on equal footing with companies that could have crushed them only a few years ago.

3D at CES: Better solutions, but more confusion?

Consumers interested in buying 3D HDTVs have had to contend with the limitations of existing sets: They require expensive (typically $100 (U.S.) or more), powered, "active-shutter" glasses that are incompatible from vendor to vendor--for example, Sony's 3D glasses won't work with Samsung's 3D HDTVs, and vice versa. (One company, Xpand, has developed "universal" 3D glasses that work with a variety of manufacturers' sets.) At this week's CES, a number of companies have announced new approaches that might make active-shutter glasses obsolete.

The first innovation is passive 3D glasses. They require no power, and depending on the vendor, will cost between $10 and $20 each. Vizio was the first out of the gate with passive glasses. The company claims that it will work with virtually any modern passive 3D glasses, including the ones given out at movie theaters. The biggest limitation of the Vizio approach is that it results in "half-resolution" 3D images, because the images for both eyes are displayed simultaneously in the same frame. That means that a 1920 x 1080 image becomes 960 x 540.

Next, LG Electronics announced its Cinema 3D technology, which it claims has been certified to be flicker-free by two commercial standards organizations, Intertek and TUV. There's no word yet on whether the LG technology provides a full- or half-resolution image.

Samsung has teamed with RealD, the largest supplier of 3D technology to movie theaters, to offer a 3D system that uses the same passive glasses as theaters. The active switching layer is in the LCD display, not the glasses, and changes the polarization of the light coming through the LCD from the backlight. This enables the system to display a full-resolution image. In 2D mode, the polarization switching system is disabled. Although Samsung is displaying the system at CES, it hasn't announced any ship dates, while both the Vizio and LG Electronics systems should begin shipping in Q1 2011.

Finally, Toshiba is displaying 3D HDTVs that require no glasses whatsoever. The Toshiba system uses passive filters to split the image for each eye, and results in a half-resolution image. In addition, viewing position and angle are critical in order to get the maximum 3D effect. Toshiba plans to ship 3D HDTVs of 40 inches and larger, and is showing 56 and 65 inch prototypes at CES. Bloomberg Business Week reports that the company plans to start shipping sets in April.

This new collection of 3D technologies opens up a number of questions:

• We know the cost of the passive 3D glasses, but how much will the 3D HDTVs cost? So far, the price of only one of the new sets has been released. How will the prices compare with existing sets that use active 3D glasses?
• Will the performance of the sets vary depending on the type of passive glasses used? Vizio, for one, claims that its new sets can use passive glasses from just about anyone, including the ones given away at the movies. Samsung and RealD, on the other hand, claim that their system will only work with glasses from RealD.
• Will consumers be satisfied with "half-resolution" systems? In a crowded Best Buy, Walmart or Costco, where they're most likely to see the sets, will they even be able to tell the difference?
• How will consumers choose between all these different approaches, or will they wait until manufacturers settle on a standard approach?

3D won't help Sony escape its competitors

Sony introduced a slew of 3D games at E3. Existing PlayStation 3 consoles are already 3D-compatible, but to play 3D games, you need a 3D-compatible HDTV. Sony's logic is that 3D games will drive the sales of its 3D HDTVs, thus increasing overall corporate revenues. The only problem is that Sony isn't the only player in 3D HDTVs. Next week, Vizio, one of the leaders in low-priced HDTVs, will demonstrate two 3D HDTVs at the CES line show in New York City. One model will have a 55" active 3D display with Bluetooth-enabled 3D glasses and a 480Hz refresh rate; the other model will have a 65" passive display and use simple polarized lenses for the 3D effect.

Sony's goals with its 3D initiative are to spur a new wave of consumer electronics sales, and to insulate itself from competition. It may accomplish the first goal, but it's not going to escape the competitors who are plaguing it in the HDTV and Blu-Ray markets.