Hard Case: Addicted to the Upgrade Cycle

norman

Consumer electronics used to be simple. TV sizes would increase every few years, and image quality underwent slight improvements. Every decade or so, you’d have a new technology emerge that offered genuine improvements. VCRs emerged in the 1970s, CDs in the late 70s, DVDs in the 1990s. People had time to absorb the new technologies over years, and prices would trend downward in a predictable and steady way.

Contrast that with how the PC emerged. From the beginning, the PC industry constantly came up with new ideas and innovations. Over three decades, we witnessed huge discontinuities in the industry, driving two year upgrade cycles. From the original Commodores and Ataris, through Apple and CP/M and into the IBM PC era, the pace of change accelerated, driven by Moore’s law. Faster processor, GUIs, the Internet, audio, 3D graphics and a host of new innovations drove a rapid, seemingly nonstop upgrade cycle.

Having just returned from the Consumer Electronics Show, I’m convinced that the consumer electronics industry has taken to heart the constant upgrade cycle that’s driven the PC business – to the detriment of customers.

I blame a couple of trends in the past few years: the iPod and the digital TV transition.

Apple’s iPod, closely tied to iTunes, became a model for a new way of doing business. The hardware was tied to the content, driving a steady stream of microtransactions even after the hardware had been bought and paid for. Apple would get a cut of each song, video and now, applications, sold through iTunes or the iPhone App store.

The rapid transition from analog to digital transition drove huge sales of HDTVs in the past three years. As people became aware that analog TV would disappear, they rushed to buy DTVs. As sexy flat panel HDTVs became more affordable, there was a boom in sales of LCD and plasma TVs.

This also drove other businesses. Content providers – cable and satellite TV – saw rapid increases in user connections as people sought HD content. A new generation of HD capable game consoles, the Xbox 360 and PS3 – also provided eye candy incentive to move to bigger and higher resolution TVs.

Devices also became more programmable, which led to something PC users were altogether too familiar with: bugs, and the need to patch… er, I mean, update systems. Back in the analog era, you’d never update your TV, unless it actually broke down. Now, users are regularly updating the firmware of their TVs, set-top boxes and Blu-ray players.

At the latest CES, we saw a massive push by the CE industry to move to 3D HDTV. I’m unconvinced that anyone would want to wear those bulky LCD shutter glasses for hours on end, but there’s no denying that some content looks great in stereoscopic 3D.

On the other hand, if I’d just bought a brand new HDTV in December, along with maybe a Blu-ray player, I’d be royally ticked off.

PC users, of course, are used to this sort of thing. Except for Apple, desktop PCs are modular, so you can always swap out an old 3D card for a new one, for example. But if you want to move to stereoscopic 3D TV, you’ll likely need a new HDTV and a new Blu-ray player. I’m annoyed at this, and both my Blu-ray player and HDTV are well over a year old.

The other downside to this is that no product becomes fully baked. Instead of fixing problems – through firmware updates or recalls – the CE companies just push new gear out the door. No product ever seems fully finished. Hey, it’s okay of Gmail is in perpetual beta, but I don’t want to spend $2,000 on an HDTV that’s still not a fully finished product.

So here’s my message to the CE industry: slow down already. I’m game to move to the next generation of stereoscopic 3D gear, but take the time to fully work out the kinks in the technology, develop universal standards and provide some actual long term value to your customers.

We’ll all be much happier over the long run.

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