JPR Supplement 2010

8/14/2019 JPR Supplement 2010

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VISIONS AND PREDICTIONS2

visions and predictions

january 2010

Visions and Predictions

As is customary in this and other industries, presidents, pundits, and ponticators look into the horizon andtry to divine the future. We asked some of the most visionary people in the industry to share their views with

us and give us a glimpse of what they see coming. We were surprised by the responses, and sadly couldntinclude them all. Here then are the ones we liked best. As you might expect, each contributor tended to see

the world in his or her own terms but these people are all very engaged in their industries as well. Taken together, thethings that they see as importantreally are important because these people and the people who work for them andwith them are helping to make these ideas a reality.

For two years now the cloud has been on everyones list of most influential technology. The beauty of talking aboutthe cloud is that it is a vague term that has room for a variety of actual applications. So, youre pretty much not goingto go wrong when you go out on an limb and say the cloud is going to be important. However, there is anotherkind of cloud and the CAD companies have been talking about how important cloud point data is going to be. PingFu from Geomagic gives us her take and reminds us that success is about focus.

Through 2009, weve seen quite a few new ideas ooze to the top layers of the collective consciousness. Thanks tothe movie business, stereoscopic 3D is re-emerging. Levy Gerzberg from Zoran, however, thinks that 3D is going toevolve a little differently than is commonly believed. Not surprisingly, Jen-Hsun Huang at Nvidia is excited aboutGPU compute possibilities. His company is making an audacious bet on GP GPU computing and theyre putting a lotof resources into trying to kick-start the technology. Like Gerzberg, Huang is also very interested in 3D and hes look-ing at tablets. As this is being written, the tablet is on everyones mind as people expect to see Apples take on it earlyin 2010. Meanwhile, over at AMD where the company has quite a bit to be optimistic about, Dirk Meyer believes thenew PC operating systems Microsofts Windows 7 and Apples Snow Leopard are going to have a big impact on theindustry. Meyer sees them as the gateway for his Fusion product. Luxologys Brad Peebler has wide ranging interests.Hes expecting to see advances in Augmented Reality, 3D cameras, and photos. Hossein Yassaie from ImaginationTechnologies is another challenger in the semiconductor market. He has big ambitions for Imagination and thinksmultimedia will be everywhere enabled by a new class of embedded connected processors.

The JPR crew piped in to, and Andy thinks 2010 will be the year of Always-on Content and never out of touchsmart phones. Interestingly, Jake and Andy take different sides on a couple of issues. Andy sees Blu-ray becoming asimportant for storage and archiving as it is for content. Jake thinks social networks and the cloud will help kill off

physical media, while Ted is cautiously optimistic about on-line games, likes consoles and thinks social networks areover hyped. Jons wrap up is, dont go for the easy forecast and pay attention to intimacy.s

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Visions and predictions ................................................................................................................ 2Ping Fu, Chairman, President and Chief Executive Officer, GeoMagic ............................................ 3Dr. Levy Gerzberg, President and CEO, Zoran Corporation. .......................................................... 6Jen-Hsun Huang, Co-Founder, President, and Chief Executive Officer, Nvidia................................. 6Dirk Meyer, President and CEO, AMD .......................................................................................... 8Brad Peebler, co-founder, President, Luxology .............................................................................. 9Hossein Yassaie, Chief Executive Officer, Imagination Technologies ............................................. 10Andy Marken, President, Marken Communications ..................................................................... 10Jake Richter, President, Patent Logistics, LLC ............................................................................... 12Ted Pollak, President, EE Fund Management LLC ......................................................................... 14Easy predictions, Jon Peddie ...................................................................................................... 15

TABLE OF CONTENTS


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VISIONS AND PREDICTIONS


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Ping Fu,Chairman, President and

Chief Executive Officer,GeoMagic

Why is it that many of usget our best ideas duringthe worst times? Duringthe last economic down-

turn, my company, Geomagic, grew into the leader of thedigital shape sampling and processing (DSSP) market whenmost observers were writing our obituary. We sufferedthrough the effects of a dot-com crash, 9/11, SARS, twowars, and a recession. What makes us perform better com-paring to the peers, competitions and the general marketswe are in?

Some of you may be familiar with Viktor Frankls leg-

endary book, Mans Search for Meaning, the real life storyof his experience living in a concentration camp as an Aus-trian Jewish psychologist in World War II. Frankl foundthat those who died quickly had lost hope and a sense ofmeaning and they tended to focus their attention on theirsuffering, while those who survived tried to find the mean-ing or learning in this awful situation. If you were to distillthis great book down to what I call an emotional equa-tion, it would be Despair = SufferingMeaning. Just as inalgebra, life is full of constants and variables with sufferingbeing the constant in a concentration camp and meaningbeing the variable. Life, and business, is all about whereyou place your attention. Focusing on the meaning can re-duce your despair. Thankfully, the prison we experience isin our minds as theres no barbed wire around our offices,

and many company leaders have been freed from their si-lent suffering by remembering this emotional equation.As we approach the end of the year, it is a good time to

reflect upon the meaningof our lives and work, as well asfocus on the things and people who really matter the mostto us. Of course, there are many folks who just want to put2009 behind them with a sigh of relief. The economic cli-mate proved to be more of a perfect storm. Like a tsunami,it generated monstrous waves that were intent on destroy-ing anything in their path. And economic concerns were notthe only source of turbulence, fear, and insecurity duringthe year. In this regard, Im sure that the mass medias end-of-the-year reviews will provide many other examples ofwhy 2009 is a year that deserves to be forgotten.

No matter how bad the year may have been there is al-ways opportunity to view it through a meaning-centeredlens. And by so doing, the year gone-by offers us a platformfor seeing what an interesting couple of years it has beenand planning a cautiously optimistic future. What better atime for such reflection then when we experience the end ofone year and beginning of another?

Joseph Pines latest work, together with James Gilmore,concerns the Experience Economy, a stage of economicoffering beyond goods and services. If you think there isplenty of challenges with SIM then just wait until you readabout the Experience Economyand it doesnt just applyto Walt Disney; it can also apply to financial services.

The Experience Economy is a new stage of economic of-fering. The agriculture based economy dealt mostly in raw

materials: wheat to bake ones own bread, wool to knit thefamily garments. During the industrial revolution, millionsof people moved from countryside to town, from field tofactory floor. Free time was short and so not only did thefactories produce steel and iron, engines and ships, they

also produced tinned food and knitted clothes and the cor-ner bakery produced the daily bread. The era of mass man-ufactured goods had arrived.

Further economic prosperity and increased automationhas increased wages and decreased the hours worked. Butrather than use the increased non working time to return tomaking our own bread and knitting our own clothes, we,in the advanced industrial economies, have chosen to spendour time purchasing services. Restaurants now cook andserve our meal and clear the dishes; personal shoppers ad-vise on suitable fashion garments and then they spend timemaking the purchase.

This services stage has become so rooted and so preva-lent that in many instances it is becoming commoditizedin the same was that raw materials such as wheat and oil

certainly have, and goods such as PCs and family cars al-most have. Within financial services, home and car insur-ance, and savings accounts are seen by most consumers tobe identical services, with selection based solely on price orinterest rates.

In order to differentiate, many companies are movingbeyond services into experiences. Experiences are a distinctoffering from services. Experiences must provide a personaland memorable offering that will remain with one for along time, but in order to achieve this, the guests (lets notcall them customers), must be drawn into the offering suchthat they feel a personal connection and intimate trust. Andto feel the intimacy, the guest must actively participate.This requires products and services are personalized ac-cording to the needs, the response, and the behavioral traits


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of the guests. Personalization has always been availablefor the rich, making it available for the masses is the mainstreet in the Experience Economy.

What do Experience Economy and Cloud Computing

have in common? The former is the result we desire andthe latter is the technology to bring personalized experi-ence into reality.

Beyond cloud computingA lot has been written about cloud computingwork-

ing with data and applications over the Internetbut anequally influential movement might be the one centered onanother cloud: the point cloud.

For more than a decade, engineers have been able toscan physical objects and create a 3D point cloud. A pointcloud is exactly what the name suggests: a digital collectionof points that represents a physical object. In the past, thepath from point cloud to an accurate 3D model residing ina CAD program has been one that requires a fair amount

of expertise to traverse. But steady progress over the last10 years, aided by two recent breakthroughs, has createda much wider and accessible data freeway emanating fromthe point cloud.

In industries spanning automotive, aerospace, consumerproducts, and medical devices, product development andanalysis starts at the point cloud. From there, it branchesinto a wide range of potential applications, including me-chanical and freeform design, mass customization, comput-er-aided engineering analysis, inspection and quality con-trol, and rapid prototyping.

Point-cloud processing, sometimes called digital shapesampling and processing (DSSP), closes the loop betweenthe physical and digital worlds, providing the physical-digital match that cannot be obtained with an idealizedCAD model. What Adobe offers to the 2D document world,

DSSP provides to the much broader 3D product world.Until recently, the most tenuous part of the physical-

digital loop was making the connection between 3D scandata and 3D CAD parametric models. Over the past twoyears, that connection has been simplified and streamlinedby two major developments. One is the ability to captureand reproduce design intent for a physical object; the otheris Parametric Exchange, which enables automatic nativereconstruction of geometry, speeding product developmenttime and increasing the quality of the final model.

Although there have been major hardware develop-ments that have contributed to the rise of DSSPincludinghigher-resolution scanners at lower prices, more powerful

graphics processing, and a wealth of rapid prototyping op-tionsthe most important innovations have come from thesoftware side. Below is a timetable of key software develop-ments that have led to the ascendency of the point cloud asthe genesis of product development.

2000: Integration of software with 3D color scanners;templates that enable surface patch layouts to be re-used as templates; automatic reconstruction of sharpedges lost during scanning.

2001: Automatic processing and registering of multiplescans; automatic color, texture and bump mapping;boolean polygon editing; new macros that simplify se-quential tasks; multi-threaded operations.

2002: Ability to handle large scanned data in either or-dered or unordered formats; new algorithms that speeddata processing by 10 fold; wider scanner support.

2003: More automated polygon wrapping; one-stepconversion of polygon to NURBS models.

2004: Fitting algorithm that automatically determineswhen convergence to a final alignment has occurred;memory mapping and disk caching to handle modelsof 100 million points or more.

2005: Major surfacing improvements such as featuredetection and segmentation; patch optimization; adap-tive surface fitting.

2006: Feature detection and extraction, the first stepin determining design intent; user-defined patch layout;color texture mapping.

2007: First program to automatically extract designintent from a physical object; support for 3D scannersand hard probes under the same interface.

2008: Constrained surface fitting for easier surfacealignment; automatic surface extension and trimming.

2009: Parametric Exchange, an intelligent connectionwith CAD that enables automatic native reconstructionof geometry.

Two years ago, a major step was made in closing thephysical-digital loop. Its called design-intent modelingthe ability to automatically extract design intent from aphysical object.

Design-intent modeling expands DSSP beyond reverseengineeringthe process of simply producing an accuratedigital copy. DSSP software can now extract the originaldesign intent from a scan of a physical model, kick-startingthe process of modeling and adapting that design in CAD.

Users can start with physical models and prototypes of anew design (such as a car body sculpted in clay) and quick-ly get to a digital, CAD-ready representation.

The technology involved in design-intent modeling isfundamentally different from CAD. CAD focuses on cre-ating and combining various geometric features. It is aprescriptive process, where everything is explicitly drivenby the user and built by the system. Design-intent model-ing searches for unknown information by structuring thescanned data from physical objects and extracting engi-neering features. It is the first intelligent process for repro-ducing design intent, drastically shortening lead time invarious industrial applications.

The technology involved in design-intent

modeling is fundamentally different

from CAD. CAD focuses on creating and

combining various geometric features.

Design-intent modeling searches for

unknown information by structuring

the scanned data from physical objects

and extracting engineering features.


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This new technology complements CAD, but is unique inthat all operations are driven by scan data, including meshprocessing, segmentation, curve extraction, surface fitting,constrained fitting and perfecting models. The art of thisprocess is to extract a valid structure from partial data sets,

and compensate measurement errors in order to get perfectsurface geometries.

Whereas reverse engineering relies primarily on manualoperations, the new technology for extracting design intenttakes a global approach, segmenting the mesh into a com-plete and consistent structure. Functionally decomposed re-gions generated in software correspond to the structure andconstruction logic of the CAD models to be created.

The ability to generate CAD-ready surfaces from scansof physical objects laid the groundwork for the latest majorDSSP refinementParametric Exchange.

Parametric Exchange is a major section of the softwarebridge between point clouds and CAD. It provides an intel-ligent connection with CAD to enable automatic native re-construction of geometry. With Parametric Exchange, para-

metric surfaces, datums and curves can be transferred fromDSSP software to CAD without the need for intermediateneutral files such as IGES or STEP.

Instead of duplicating CAD functionality, Parametric Ex-change sends the parts of an assemblyin sketch, surfaceor solid formto the CAD program in its native format,where it can then be edited, assembled and modified ac-cording to the users specifications and downstream needs.There is no longer the need to fill in missing data lost in thetransfer to a neutral format, or to reconstruct features andpieces of geometry from scratch.

The Parametric Exchange process leverages the specificstrengths of DSSP and CAD softwareDSSP to capture andprocess point-cloud data into CAD-ready models, and CADto make modifications and prepare for downstream CAE,CAM, PLM and rapid prototyping operations.

Freedom to explore and customizeThe closed loop between scan data and CAD gives in-

dustrial designers the freedom to explore new and endlessvariations of products. Think of thousands of permutationsof classic Nike shoes, individualized Mattel toys, or person-alized gas tanks for Harley-Davidson motorcycles.

It also has the potential to save manufacturers millionsin tooling costs. Instead of recreating an expensive moldfrom scratch, for example, companies can scan an existingone, analyze the wear and tear, design an improved model,and manufacture new molds in days instead of weeks ormonths.

The ability to capture an existing design and quicklyadapt it to new styles and purposes is critical to the evolu-tion from mass manufacturing to mass customization. Thecombination of design-intent modeling with ParametricModeling provides many of the essential tools that will de-liver on the promise of individualized design on an afford-able, mass scale.

Better quality, realistic analysisThe ability of DSSP to process point clouds into accu-

rate digital models is also opening up new applications in3D inspection, computer-aided analysis, and quality con-trol. Companies now have the ability to almost instantlyscan a product coming off an assembly line and compareit to the idealized CAD model to determine deviations and

changes caused by tooling or molds. Car companies canconduct finite-element analysis (FEA) and computationalfluid dynamics (CFD) simulations based on the actual digi-tal model of an as-built part or assembly, rather than theless-accurate CAD model. Maintenance, repair and over-haul (MRO) organizations can quickly assess damage to

parts and fulfill the dual goals of better repairs and gettingplanes back in the air faster.In organizations such as Schneider-Electric and ITT/

Goulds Pumps, DSSP starting at the point cloud is drivingmajor engineering changes.

Schneider-Electric has progressed from dimensionalanalysis of singular parts to being able to analyze function-ality as a major element of an entire assemblys analysis,saving countless hours and material across the companys90,000-employee, 130-country operations.

At ITT/Goulds, DSSP has generated quality controlbreakthroughs, including new processes to improve impel-ler balance and determine foundry process variation. Thetime it takes to analyze impeller balance has been reducedfrom hours to 10 minutes, and the ability to accuratelymeasure wall thickness for molds is delivering greater qual-ity in much less time.

New medical insightAnother major area that is benefiting from increased au-

tomation and accuracy in point processing is the medicalfield. DSSP is having a major impact in areas such as den-tal implants, orthodontics, prosthetics, hearing instruments,breast reconstruction, and cleft lip and palate treatment.

Industrial processes based on DSSP have crossed thechasm into medical, where the ability to scan a body partor a dental mold enables doctors and dentists to tailortreatments to the exact physiological needs of their pa-tients. The results include better fit and functionality of

The closed loop between scan data

and CAD gives industrial designers the

freedom to explore new and endless

variations of products. Think of thousands

of permutations of classic Nike shoes,

individualized Mattel toys, or personalized

gas tanks for Harley-Davidson motorcycles.


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prosthetic, dental and hearing devices; less invasive andmore personalized treatment; greater ability to analyze suc-cess of treatment and make adjustments; and better com-munication with patients through 3D imaging.

From points to endless possibilitiesThe beauty of applications spawned from the point

cloud is their seemingly infinite variety. A confluence ofideas and new applications are coming out of dialogueamong industrial, medical and artistic communities.

At Convergence 2009, the Geomagic user conference,presentations covered everything from refining 119-year-old foundry processes to exposing a fraudulent Picassopainting; from the quest to set a world land speed recordto innovations in dental implants; from new applicationsin pediatric orthopedics to major reductions in industrialtime-to-market and return-to-market cycles.

Within automotive and aerospace companies, hospitals,consumer product manufacturers, design boutiques, elec-trical component makers, medical device providers and a

host of traditional and newly minted entities popping upthroughout the world, a quiet revolution is taking place.And, it all starts with the humble point cloud. s

Jen-Hsun Huang,Co-Founder, President, and

Chief Executive Officer, Nvidia

Iam more enthusiastic and ex-cited about the impact of com-puting than ever before. Thegoals our industry has been

working towards are all coming to-gether right before our eyes.

Its fun predicting things that willbe possible somedayIron Man glasses with augmentedreality (and obviously he is using cloud computing over4G and a GPU supercomputer at his home). Non-super-hero uses could be to recognize a persons face at a party,

do facial recognition over the cloud, and display the per-sons name on your glasses. Another application mightlook something like Star Treks universal translator (dur-ing video conference our voice is digitized and translated inreal-time using a GPU). To make these experiences possible,

we need a massive breakthrough in computing performance(i.e., GPU computing), cloud/4G, advances in computer vi-sion, image search, linguistic translation, mobile comput-ing, and translucent displays. It might be fun to do a tech-nologies behind Star Trek or Iron Man someday.

The harder thing to predict is whether something isgoing to be big and also become a category or trend. i.e.,predicting netbooks. Only Asus predicted it. Everyone elsegot dragged into it. Netbooks are a fascinating topic andworth a quick look. First, is the netbook a trend or a fad?A bigger question isis the usage behavior of netbook atrend or fad? We wont really know why people buy anduse a netbook for a while longer, but it is probably a com-bination of cheaper, smaller, or good enough computing forweb browsing. Or, in fact, all three are necessary. Because

it is cheap, and small, and good enough for browsing, con-sumers can take it around with them without concern oflosing or breaking it. If it were our primary PC, we wouldhave a hard time treating it like a phone. I think netbookshave tapped into a sensibility that web and basic computingis all we need most of the time. The PC becomes a work-station and the netbook becomes our data connected de-vice (whereas a phone is a voice connected device). Imnot trying to create new silly terms for the industry, butits important to understand the differences between thesedevices and how they will be used. Then the question iswhether the netbook is the best long-term data connecteddevice. I think the answer here is clearly not. But until theindustry finds an easier-to-use device for web browsing, Ibelieve netbooks will continue explosive growth. This leadsme to things that will be exciting and disruptive.

Dr. Levy Gerzberg,President and CEO,Zoran Corporation.

While much of the focus at CES2010 will be on 3D televi-sions, I predict that a signi-cant percentage of future 3D

content will be generated by consumersthemselves using 3D digital cameras.

Watching your own children or videos of family trips on yourown 3D television may be a compelling reason, in addition tocommercial 3D movies, for consumers to buy 3D televisionsand cameras. Also, a desire to share and store user-generatedvideo content will drive consumers to buy and use more In-ternet-connected devices such as Blu-ray and Media Players, anew generation of Set-Top Boxes, connected Digital Cameras,and even the next generation of the popular Flip MinoHDcamcorder.s


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The three big things Im excited about are: Tablets,3D, and GPU computing.

Tablets, the iPod of web browsingTablets will combine touch display plus android plus

3G/4G plus mobile internet processors and the combina-tion will make possible lots of amazing devices. Tabletscan allow us to do things we love to do already, more con-

veniently; and over time, in more engaging ways. Millionsenjoy Facebook, YouTube, and Hulu. All of us enjoy maga-zines and newspapers, and games and movies. The tabletmay perfectly strike the balance between whats needed toenjoy all the content and apps on the web and yet be easycarry, making it far more convenient than a PC. The tabletmay disrupt both smartphones (i.e., set higher expectationsfor it) as well as netbooks (i.e., make it obsolete).

The tablet will likely be a game-changer for many in-dustries. Old media companies can reinvent themselves intoa new media company. Instead of a search-centric way offinding information on a PC, an e-reader tablet experi-ence can and will likely start with the content. You anxious-ly open the latest issue ofWired, or Business Week, or theEconomist, or JPRs Tech Watch. The content is paginated

to fit the resolution. Ads are integrated into magazines onthe tablet just as they are in print, but theyll go further.Theyll come alive because of video and flash graphics. Youcan circle something interesting to share with a friend. If anad is funny and well done, you can forward it to a friend,making ads viral. Ad revenues can be captured by compa-nies creating entertaining and attractive content, enablingmagazines and newspapers to continue to create high qual-ity content that educates and amuses us all.

On the tablet, will Facebook be the killer app? Will Fa-cebook become the most important game platform? FromFacebook, you can learn about a new game, download it,make micro-payments, and link up with friends to play to-gether. IfFarmvilles amazing growth is any indicator, Face-book on a Tablet will be interesting to watch. Casual-social

gaming on a Facebook Tablet maybe just be the most im-portant gaming platform of this decade.

3D (the next level)Today, using teraflops of processing, we simulate the

world in 3D, create amazing effects, and just at the lastmicrosecond, do a 3D-to-2D projection so that you canenjoy it in 2D. There is a lunacy about this. The technol-ogy has taken some time to develop. There have been lotsof challenges. To bring a better than 2D experience to theworld, we need double the refresh rate, much more process-ing, glasses that allow us to enjoy 3D without losing reso-lution or refresh rate, and software that synchronizes theapplication to the GPU to display to glasses. Theres lots of

technology to invent along the entire electronic pathway toyour retinas. And then theres the matter of content to makethis piece of science into something of use to consumers.After working on 3D Vision for five years, I believe we aregoing to pull it all together this year: fast GPUs to display

to both eyes, 120 Hz HD LCDs with stereoscopic technol-ogy built in, fast polarized glasses, software to make it allwork, and content. There will be games, movies with 3DBlu-ray, Youtube in 3D, and cameras to take 3D photos. 3Dwill become a must-have feature for gaming PCs this year.

GPU computingIt is now a commonly held idea in the industry that se-

quential computation is best done on CPU and parallelcomputing is best done using GPGPU. It is common sensethat the installed base of GPUs is significant and rivalsquad-core CPUs. Everyone can benefit from GPU accelera-tion. And it is now common sense that applications can seehuge speed-ups. Things that take hours can take minutes,and things that stutter can now be fluid and enjoyable. The

common sense is basically that if there are two processorsin your PC, use the right processor for the right task. Allof this is excellent progress for an industry that has beenimmersed in a central processing world for the past twodecades. So, it is frankly amazing that this radical hetero-geneous computing model has now become common sensewithin the industry. That was the big achievement of 2009.But what are the killer apps that make GPGPU necessary?My predictions are:

Forgamers: amazement by the beauty of the world thatwe create using physics simulation in games. (Look forPhysX games.)

For video/photo enthusiasts: delight and joy as theymanipulate silky smooth HD video with ease. (Look

for Adobe CS5). For product designers (cars, tennis shoes, buildings):

marvel as their creation is brought to life in seconds(vs hours) with interactive ray tracing. (Look for Optixand iRay applications).

Forfilmcreators: catching up with Avatar without the$500M investment.

Greatbenefitsforconsumers: Disruptive to industries.See the amazing change from several perspectives.

FromtheperspectiveofthePCindustry: Parallel com-puting will revolutionize the PC architecture startingfrom workstations and high-performance segments.Tablets and smartphones will disrupt.

And the most important element of all is the consumer.The things we already do are now more convenient (likewhat iPod did for music, what Gameboy did for consolegames). Experience beyond. New capability. s

Everyone can benefit from GPU

acceleration and it is now common

sense that applications can see huge

speed-ups. Things that take hours can

take minutes, and things that stutter

can now be fluid and enjoyable.


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Dirk Meyer,President and CEO, AMD

A 2010 Resolution for the TechIndustry: Focus on the UserExperience

The end of the year offers a time for reflection, oftenleading to a resolution to make things better in theyear ahead. In terms of reflection, many in this in-dustry would like to forget 2009 and move on. But,

I think challenging times also offer the opportunity to ac-celerate positive change. I know we at AMD have seen alot of change in the past year with the creation of a newmanufacturing company, Global Foundries, and the historic

settlement with Intel bringing with it the hope of a fair andopen competitive environment.Perhaps it is a good time for reflection and change

across the industry, too. A refreshed spirit of innovationand a fair competitive environment could bring us closerthan ever to giving customers what theyve always wantedfrom computingpowerful, flexible, and satisfying ways toenhance their lives. We can shift away from whats insidecomputers and focus more on the experiences they enable.Because computing isnt really about computers, its aboutwhat people can accomplish with them.

For example, I think we can learn a lot from this pastyear from the introduction of what others call netbooks.Against the backdrop of a year in which consumers werelooking to get the most for their money, low-priced net-books seemed widely appealing. But consumers quickly

learned that lower prices more often than not didnt trans-late to a positive customer experience. Because, while net-books may have actually delivered lower prices, what camewith that was a compromised experience that ran counterto the notion of value. Consumers are smarter than that,and we in this industry should know better.

The introduction of Windows 7 and Snow Leopard op-erating systems represent a solid leap forward in enablingthe kinds of experiences consumers clearly want. They arethe first OSs capable of dynamically harnessing the power-ful fusion of CPUs and GPUs to deliver a richer visual ex-perience in desktops and notebooks.

For the industry, it can mean better days for manufac-turers and retailers, who can return to competing more oninnovation than price. For consumers, it can translate into

much more exciting, immersive, and natural interface. Thequality of visual displays is poised to improve by ordersof magnitude, promising the vibrant photorealistic and 3Dexperiences customers increasingly demand. We are just be-ginning to explore entirely new ways for people to interactwith their machines.

Imagine the possibilities for games and multimedia whenheterogeneous computing delivers a personal cloud in awireless network to give homes horsepower comparable tothat found in todays corporate data centers.

All signs indicate that it may not be long before roadwarriors routinely carry lightweight notebooks with super-computer power. You dont have to be a geological engi-neer to need that. Even today, popular sites are loaded with

multiple video streams and Flash features that stagger thestrongest PCs. Our next generation of accelerated process-ing units (or APUs) is designed to bulldoze that demand,challenging developers and game designers to bring on evenmore engaging, entertaining, and productive applications.

As developers turn their attention to office applications,the newly-available combination of 3-D, motion capture,interactivity, and high-definition video and audio standsready to enable brilliantly visual productivity and collabo-ration apps that are now inconceivable.

Consumers tell us they want a persistent, ubiquitous,flexible computing ecosystem to accomplish whatever wherever whenever. Good enough computing is clearlynot good enough to meet this demand. Anything less thanmaximum innovation, performance, quality, and value is alosing proposition.

The industry is preparing to deliver this ecosystemacross notebooks, desktops, netbooks, handheld devices,and forms no one has thought of yet. We are working togive consumers what they want in thin clients, fat clients,

servers, and the cloud. Were focusing on providing unprec-edented capabilities and experiences at work, at home, onthe go, gaming, playing, and connecting. We want to linkpeople to people, machines to machines, and machines topeople. And we want to make all of this look and feel morelike real and virtual life than ever before.

What are the technical specs on the fact tag? Consumersdont care. Just make my life better, more productive, moreexciting, and more fun, they say. As we focus on givingpeople more of what they asking for, we all stand to be re-warded. No wonder Jon Peddie recently told one of my ex-ecutives, The industry is jumping up and down with joyas it looks at the years ahead.

Heres to being optimistic. As an industry, we may be fi-nally getting it. s

Brad Peebler, Co-founder,President, Luxology

Augmented reality:Gimmick or new reality?

M

ix one part real-time motion tracking, one partweb-cam and one part real-time 3D content andyouve got yourself a hot new trend. By real-timecompositing 3D elements over the video coming

in via the webcam, companies are pimping the term aug-mented reality.

You may have seen the recent marketing stunts includinginteractive gift cards from Home Depot that, when held toa web cam, displays possible projects or products displayedin a 3D crate. The movie Coraline was promoted with But-ton your eyes mirrorswhen people on the street lookedinto these mirrors they saw themselves with buttons in theireyes. So far, the use of augmented reality has been focusedon the marketing domain and has the real feel of some-thing gimmicky. It feels like a technology looking for anapplication, which is usually a recipe for failure. However,I believe augmented reality is not merely going to stick butcould change our day-to-day lives in very profound ways.


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You may have seen the somewhat hacked together TEDdemo from the team at MIT which leveraged a wearablecomputer and mini-projector to create a projected aug-mented reality allowing newspapers to come to life alaHarry Potter or for a book jacket to don its Amazon star

rating right before your very eyes. I cant imagine manypeople will be excited about the fashion statement onemakes when they dangle a projector from a lanyard aroundtheir neck; I do believe there is an immediate and more ac-ceptable alternative. Who needs to drag a computer aroundon their back when we already carry them in our pockets?Yes, todays phones have significant compute power andthere are already examples of augmented reality apps onthe iPhone and other mobile devices. I suspect well see alot more very useful tools that leverage the ability to cap-ture and display live video of your surroundings while le-veraging the very interesting conglomeration of informa-tion from the global knowledge base of the internet, GPSdata, compass information and an accelerometer, all thewhile compositing the results from all these sources over

the very same images that were analyzed for the search.Point your phones camera and get immediate consumerreports information about a product, find out what sortof odd-looking flower is on the side of the trail, or findout how much your neighbors new car cost all in real-timewithout typing a letter.

Of course, the data flow is not one-way so you maybe contributing to an ever-expanding pool of data, usefulor not. Found an odd insect? Your web-connected cameraidentifies it for you almost immediately but also notes thatbased on your GPS data that insect is alien to the region.The states agricultural department may find this very use-ful information. With all technologies there is a dark side.These new-found benefits of augmented reality will encour-age us to have our cameras pointing at our surroundingsand the people therein. While this could be a very usefultool in and of itself, imagine users in a SETI screen blankerstyle network who allow video streams of their camera tobe analyzed and searched for missing or wanted persons(neat!) at the same time we are crossing into so very diceyterritory for personal privacy. Rats.

While it may be impossible to predict precisely wherethis will end up, from my point of view it is safe to say it isgoing to happen and it is going to be big.

Megapixels schmegapixelsIn 2008 I purchased a Canon 5D MarkII. Im a bit of

a photo-wonk. This camera has a full frame 21 megapixelsensor. Shazaaam! But I didnt buy the camera for mega-pixels, camera companies surpassed my megapixel require-ments a couple of years ago. I was interested in somethingvery new to the digital SLR world. Video. While there areobvious reasons why this is interesting to people, I am in-terested in something a little more subtle about the moveto incorporate video recording in a still frame camera. Itindicates an open mind to using the increased capacity ofprocessors, sensors and memory cards to do more than justtake larger and larger images. For now they have identifieda use for these capacities that will appeal to a large base ofpeople. But once people have come to expect video on allSLRs I think there is another way camera companies can(and will) leverage this expanding bandwidth. It is time tomake the images deeper and not just larger.

Prior to adding video, camera companies expanded thedata captured to disk by adding support for camera RAWfiles. Essentially this is a data dump direct from the sensorand generally provides 2-stops worth of wiggle room inpost. Did you shoot a little under exposed? No worries, edit

in RAW and you can fix it. But even RAW files are a littleshallow and, in fact, photographers have recently joinedthe high-end VFX world in a lust for high dynamic rangeimages (HDRI) and many people are going to great lengthsto hack HDR images together by shooting bracketed expo-sures and compositing them together in post. In the worldof 3D we do this so we can extract real-world lighting fromsaid images. For photographers it presents a wide arrayof advantages from the very pragmatic to the wildly cre-ative. Some photographers simply enjoy the ability to sub-tly change exposures to different portions of the image soyou can see details inside a sunlit room as well as the treesoutside. In standard dynamic range images you see one orthe other. Some photographers go to extremes creating fan-tastical compositions from HDR images that often look

more painted that photographed. As with all new enablingtechnologies, it is often abused and that abuse causes somepeople to recoil at the thought of widespread use but it isthe subtle and practical uses of HDR that will ultimatelyconvince mainstream camera makers to allow new modeson our cameras where we can sacrifice megapixels for bitdepth. Let there be light!

Photography and 3D.

Environment capture.

Post bust doom and gloom or entrepreneurial hot spot?

Oh doom and gloom, booo hooo were in an economicdownturn. Guess what, this is a great time for innovatorsand entrepreneurs particularly now that there are signs of

that investment funds are loosening up. So what turns adownturn into an opportunity? Prior to a downturn thereis typically a significant amount of consolidation. Largecompanies get larger by gobbling up smaller (often moreinnovative) companies and their talent. When the econo-my turns, the common reaction of the large company is toslough off people, often really good people. Like saplingsthat rise up after a forest fire devastates the old growththese unfortunate souls are presented an opportunity touse their angst-powered energy to innovate and start anew.(Full disclosure: Luxology was founded just after the Webbubble burst in the early 2000s so we may know a littlebit about this.)

It is very hard for a new company to get potential clientsto turn away from a tried-and-true brand leader when the

markets are strong and the money is flowing. But when thebelts are tightening these same clients will suddenly have anintense interest in alternative products that focus not onlyon innovation and quality but most importantly providinga value proposition. Now more than ever there are oppor-tunities for small companies, even one-person shops, to im-pact a market. The internet provides an immediate globalsales channel, we all have super-compute power on ourdesks (and laps!) and there are amazing new devices such asDroid and the iPhone that provide a market for clever appsthat dont take a team of engineers to create. Stop feelingsorry for yourself and go change the world! s


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january 2010

Hossein Yassaie,Chief Executive Officer,

Imagination Technologies

After the very difficult in-dustryand worldwideconditions at the turn ofthe year, things have moved

significantly in a positive direction over the last two quar-ters. Indeed, while at the beginning of 2009 a semiconduc-tor market reduction of 25% or more was forecast, manyanalysts are now projecting the downturn impact as a 10%or less reduction in the overall semiconductor market for2009.

Most significantly, some analysts are now forecasting20% or more sequential growth in 2010.

That is very encouraging, as it indicates continued andsustained recovery.

From my point of view the key trends this year havebeen, and will continue to be:

Thecontinued spreadofmultimediaeverywhere: Theuse of graphics acceleration has now expanded far be-yond the PC market and into mobile; soon it will en-compass the TV and STB markets, and more. The salesof non-PC devices in which graphics play a major roleshow that users are clearly drawn to products thathave strong visual acumen. This will be reinforced bythe next wave of even more graphically capable, highlyinteractive devices.

Highperformance,lowpowermulti-streamHDvideodecode and encode are also becoming strong driversfor the future in the wake of ever growing richness

and diversity of online provision of commercial con-tent and the popular uptake of Web 2.0 user generatedvideo content.

Connectivity is becoming an essential feature, not justan option, in many forms of consumer devices. This isbeing driven by the internet everywhere trend whichwe think will mean that within five years, more than70% of all mainstream consumer electronics products,including TVs, radios, cameras, printers and more willconnect directly to the internet, not via a PC. With sev-eral major CE manufacturers already committed to in-tegrate internet connectivity across their entire productlines we believe that the era of connected devices hasbegun.

Reflecting this trend, we expect a new class of embeddedconnected processor solutions will arise.

The ability to enjoy the same content and comparableservices on the move as users do at home is a key driverin the uptake of mobile products. Mobility and low powerwill continue to be a major trend as users want everything,everywhere applications such as advanced user interfaces,cloud-based services, uncompromised internet browsing,navigation and games.

Elsewhere in the semiconductor industry Make vs.Buy decisions are tending more towards the buying ofmajor SoC functional blocks, in the form of IP, across manykey areas including CPU, GPU, video and communications.

This is driven by time to market because it allows for theavailable investment to target what really matters to semi-conductor companies: creating domain-specific applicationplatforms; maximizing total solution delivery to their cus-tomers; developing broader product portfolios; and target-ing a wider range of markets.

The trend toward delivering more complete solutions tohelp and support their customers and target markets rather

than just technology means successful semisand OEMstoowill have to increasingly focus on the key problemsthey are solving and go beyond enabling technologies. Suc-cessful identification, development, and delivery of relevantdomain knowledge will be a key factor in determiningwhich new businesses are successfully created next year,and which companies will thrive in the future. s

Andy Marken,President, Marken Communications

2010 ... the year of al-

ways-on content begins

After a 12-month reallysucky storm, its nice tosee rays of improvement,rays of potential. Depend-

ing on your market area, it couldbe a good, a really good time topack it in.

3D (stereo) beyond HDIt seems like only yesterday that wenetworks, stations,

cable guys, viewersmoved from standard to high def.Oh yeah it was.Hollywood needed something new and different to drag

you the theater, so voilalets try 3D (stereo) again. Thistime it will be differenttrust me!Panasonic and Sony are hyping a number of breathtak-

ing, end-to-end solutions. They proclaim that next year,well produce and consume content in a whole new way.Professional and consumer projections will exceed theirwildest expectations Ill have what theyre having!! Itsa lot better than the stuff in the 50s, seriously.

Were quickly moving beyond the re-animated 3D (ste-reo) stuff and the 3D (stereo) in games some have been en-joying. Were talking about real stereoscopic 3D (stereo),the stuff that beautifully messes with your mind and bringsthe flat screen to life.

Avatar was the real testthe money shot for 3D (stereo).

The ability to enjoy the same content and

comparable services on the move as users

do at home is a key driver in the uptake of

mobile products. Mobility and low power

will continue to be a major trend as users

want everything, everywhere applications.


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january 2010

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Costly ($230 M), but the movie set the stage for what toexpect. The investments in moving from SD to DTV/HDTVwont be wasted. Tellywood will leverage this investmentto begin delivering better 3D (stereo) content more quicklybecause ... theres money to be made!

Theyre already lining up for new cameras, some newproduction mixing boards, new software, new talent. Theonly things slowing them down are standards (almost there)and tons of 3D (stereo) content worth watching. There willbe about a dozen 3D (stereo) TV tests this year.

More, better stuff next yearBy 2013, youll wonder what you ever saw in plain old

HighDef. Right now, youre saying OK, crap, gotta buyanother new set! But that 1080p projection, plasma orflat screen is probably 3D (stereo)-capable. Sure, youllneed a reasonably priced add-on box (or two) for the datastream; but no need to re-plumb the house. For the 2011New Years football battle, youll be able to watch thewide receiver leap into your lap and the cheerleaders jump

higher!And dont forget those great movies youll bring home.

Itll all be good in HD and stereoscopic 3D (stereo)!!!

Never outta touchSmartphones are going to be indispensable in 2010 with

the growing number of serious and what the *** appsyoull have at your fingertips. Youll never be out of touchagain. All it took to spark the mobile industry was therapid outflow of apps (OK, Apples app store). If you donthave a smartphone, you will!

The biggest struggle will be in getting providers to opentheir networks and the pesky proprietary OS issues. Youvegot Symbian (Nokia), Android (Google), Apple, Blackberry,Microsoft and who did we miss? Oh yeah, Palm. Pre did

OK but Pixi???By this time next year, Palm will be swallowed up by

someone.Itll be a cheap way for someone to jump into the middle

of the high-end everything handset market and Palm is run-

ning out of runway. Best bet? HP. Second best? Dell.Our son is constantly playing games, web surfing, tex-

ting, emailing, watching videos, everything. A growingnumber of companies are implementing solid business-oriented apps that improve communications, keep projectsmoving forward more smoothly, enable better decisions,assist management and customers, and oh yeah, put the24x7 world squarely in your hands.

All this data is putting a helluva strain on the wirelessproviders.

You wont like it, but by this time next year, data-uselimits, tiered data plans and really creative billing will bea way of life.

Socially adeptSocial media will become a money laden, robust net-

work of networks. You probably think of the Internet ashardware, software. Wrong!!!! Its people.

Every companySun, HP, IBM, Dell, Oraclehas inter-nal and external social media networks of people. Then,we have the more public social media nets:

Professional like LinkedIn.

Social networks (and sub-networks) like Facebook,MySpace.

Photo/video sharing networks like Flickr.

Entertainment nets like YouTube.

Creeping along in the background are Google-enabledtools that they and their marketing partners will use toimprove the way they track your business and personalactions/activitiesonline and on phonemaking moneyalong the way.

Visit a web site and BAM!! you get offered a tailored ad,a coupon or recommendation. Bite and you give them theinformation they all need to complete circle. Youre on thegrid live with it!

Sunny cloud forecastsIn 2010, well finally begin to use the cloud for darned

near everything. All of the big playersIBM, HP, Google,Oracle, Amazon, Microsoft , AT&T, otherswill be fightingto be the public and private cloud provider of choice.

Netbooks will be squeezed out by more powerful, small-er and less expensive notebooks and more expensive, morefull-featured smartbooks. The open APIs (Application Pro-gramming Interface) standard will be forced onto all of theplayers, like it or not.

Businesses will insist that their software has to workacross any platform, any application, any service. It will beone of those no brainer checkmarks you make in choosinghardware, software, a provider. If it isnt checked adios!!!

With all the new content, all the new

ways to grab it, all the new ways to use

it and all the new ways to monetize it,

the industryPC, CE, communications

will be on the road to recovery.


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january 2010

Tsunami of stuffWith all the new content, all the new ways to grab it, all

the new ways to use it and all the new ways to monetizeit, the industryPC, CE, communicationswill be on the

road to recovery.UC San Diego recently published a report that peoplehave increased their consumption of data to 34 GB a day.While the volume of print data exposure is past its prime,digital content is growing exponentially. In five years, thatdata wave will double in size. Whether its in the cloud, inyour office, on your home server, in your portable what-ever device, it smells like storagehard drives, flash, opti-cal. Whats that you say? Optical is dead because youll justdownload the stuff.

Check your sanity:

The bandwidth at home is 2.5Mb/s and thats goodenough for SD content but HD? 3D (stereo)? Sorry,thats hours and hours of being online. (Providers aregoing to start charging you big $$$ for that time.)

You didnt snap up Blu discs because DVD was good-enuff, players/discs were too high, the content wasjust okay.

Players, recorders, discs are finally at the price pointwhere theyre more than just interesting and saleshave taken the uptick.

3D (stereo) could be a tipping point interest that makesmore people want to own really good stuff and theonly way youre going to get it is on a disc.

Not that you really care (admit it), but of all of thestorage options (HD, flash, tape, optical), optical is theonly one that provides provable long-term archivingperformance and honest-to-gawd green storagequal-

ity media, 100 years; once written to the disc just sitstheir patiently waiting for you to use it.

As for the other options, youre saying, heck, I dontneed more places to store my stuff. Ill just use the cloud.

Problem All of that cloud stuffsocial media, mobile access,

downloads, business transactions, entertainmentis onehuge bullseye for cybercriminals. These folks are skippingright over individual systems (chump change). Theyre tap-ping into the big clouds and cloudettes to grab hundreds,thousands, millions of valuable bits of data.

All the money, very little riskThe in demand talent in any/every organization is

going to be cyber security expertise. Sure, providers aregoing to reassure you that theyve got your back 24x7. Theproblem is, they cant figure out exactly where or how thereally creative bad guy is going strike until after he/she hasdone it and by then, your stuff is gone.

So?Youll be buying up personal/home/office storage thin-

gies. You know, portable hard drives, home NAS (networkattached storage), flash media and yes optical.

One happy guyMicrosoft has their worldwide team struggling to figure

out what tools and solutions they need to remain relevant,competitive. When it comes to business needs, they are still

the clear leader. In addition, over the past few years, theyhave become more flexible and more responsive. On theconsumer front, they still struggle to figure out how indi-viduals and Googles DNA work.

The in-between land? Thats up for grabs!

And Steve is glad he didnt cause all of your problems.He didnt invent the Internet. He didnt invent the web. Hedidnt invent Google. Hes just trying to compete, make abuck. If bad things happen to you and your stuff hollerat Eric!!!! s

Jake Richter,President,Patent Logistics, LLC

The future is the same asit was

Perhaps I am becoming more of a curmudgeon, butas I get older I get more selective about who I wantto spend time withwhether on-line or in person.

My 12-year old son and his real-life physicalfriends are diametrically opposite in their perspectivetheyaccept anyone who friends them (and when did friendbecome a verb anyhow?) on Xbox Live, World of Warcraft,or whatever other on-line social network they are part of.

I also find that I fight a constant battle against infor-mation overloadwhether from news services, blogs, Fa-cebook updates, Tweets, or e-mailto the point that Ivegotten selective about how much new information I exposemyself to, and when. I therefore miss a lot of stuff my fami-

ly considers highly important, such as a video of an octopuscarrying a coconut shell or the trailer for James CameronsAvatar. And dont even get me started on e-mailalthoughI will say that by installing filters on my mail server I limitmy daily intake to what I deem to be high priority e-mail(like from my wife ... and Jon Peddie, of course) and therest of it collects virtual dust until I decide I have nothingbetter to dotwo weeks of low priority e-mail amounts toabout eight thousand messages, most of which I file or de-lete without reading.

However, on-line communications are an addiction too,and I find that for all of my curmudgeonliness, I need to beable to have regular access to Google and my high prioritye-mail, regardless of where I am.

With my world travels over the last few years, connec-

tivity has generally not been an issue, and I have even beenable to get online from places as remote as Machu Picchu,the Galapagos Islands (while on a boat, no less), Morocco,and Fiji. I expect to put that world connectivity conceptto the test in February when I will be aboard a boat in theAntarctic for a few weeks. A satellite tracker I wanted tobuy was not guaranteed to work that far south, so I guessIll be following in the proverbial footsteps of Scott andShackleton in possibly not having Internet access at theSouth Pole.

But I digress. I have been told that this column is sup-posed to consist of my predictions for 2010, so here goes:

Personal, in-the-home, 3D (stereo) displays will con-tinue to be a source of great interest to technology pundits,


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13

and will continue to lack any real penetration into thehome in 2010. Why? Because common folks are just nowgetting themselves into 1080p flat panels (and 2D) and 3D(stereo) content will continue to be a slow dribble. 2009hasnt really even made it as the year of high definition yet,

although cheap Blu-ray players this Christmas are helping.I predict 3D (stereo) home displays will remain a noveltyuntil at least 2012, when the Mayans allegedly predict theworld will end, in which case it just wont matter.

Everyone will continue to be all atwitter about spend-ing face time in their on-line social spaces, linked intoeveryone else, and countless hours of productivity willcontinue to be wasted in business and personal lives. Thebig development in this arena in 2010 will be the slow butincreasing proliferation of information filtering technol-ogy to feed people only the information they think theywant from all the various social networks and news sitesout there. Right now the filtering technology, for the mostpart, has to be manually set-up (e.g. Google Alerts), buttheres a huge future for intelligent agents, which can use

AI methods to learn more about likes and dislikes. A hint ofthis already exists in application sites like Pandora, whereintelligent heuristics use your likes and dislikes to tailormusic stations to your desires. And Facebook has a likeindicator you can apply to senseless drivel you may enjoy,and theres a large outcry asking for a dislike option too.Once that becomes implemented, can preference-based in-telligent filtering be far behind?

The English language will continue to devolve on-line.I used to think it was just a transitory phase for teens, butwhen I recently received an e-mail from a founding part-ner of a mid-size law firm in New York written in short-lish (shorthand English), I knew the English language aswe knew it was doomed. And apparently giving folks key-boardsphysical or virtualdoesnt prevent them frombeing too lazy to spell out words and use proper punctua-tion. No surprise there, I suppose.

Physical media sales will continue to drop. Microsofthas it right. There is no need to put to put a Blu-ray discdrive in the Xbox 360. Just download what you needorstream it if your connection permits, and even Sony is head-ing that way. For myself, I know that compared to prioryears, where I would purchase dozens of new DVDs andhigh definition movie discs, in 2009 I purchased a merefraction of the discs of prior years. Instead, I have madesizable donations to Apples iTunes and Amazons DigitalDownloads in exchange for TV shows and movies in bothstandard and high definition because of the convenienceand portability of downloaded content (I cant stream wellenough where I live to make that viable). And more peopleI speak with say they are doing the same. And with compa-

nies like Redbox making physical media rentals as cheap asa dollar, it makes even less sense for someone to shell outbig bucks to own a physical copy of a movie (other thancompanies like Redbox, for example).

Content will still remain King. Witness the big threegame console makers, all of whom continue to transitiontheir now ancient (in Moore-years) hardware platforms tofinally becoming centerpieces in the average living room,all thanks to ever more pervasive content aggregationranging from games and movies to YouTube, music, socialmedia feeds. I will add that I am also a big fan of the AppleTV and SlingCatcher, both of which thrive (and depend)on content. And Im not sure what I would do without the

immediacy of content available on my Kindle DX. But ofcourse, with more content bring produced by more peo-ple, theres also more crap, er, noise out there too, whichgets back to the whole intelligent filtering technologyprediction.

Let me close with an observation on mankinds self-delu-sion. The climate talks in Copenhagen ended recently, withlittle in the way of what anyone considers success. But thereality is that in order to solve a problem you need to un-derstand both its genesis and ramifications. Without suchknowledge, and consensus that such knowledge is accurate,all you can do is guess at options, and hope something youimplement works, assuming you can get it implemented.

However, worse yet is when people who are not nearlyas smart as the scientists studying the issue try to condensethings into sound bites and chunks which are perceived tobe more manageable. Which is why politicians, among oth-ers, are issuing a loud cry for reduced carbon emissions.All the while ignoring the fact that the average, ordinaryhuman being is an excellent carbon emitter, whether in

lifebreathing, belching, and breaking windor in death(by, for example, decomposing). Lets hope politicians andthe governments they implement dont start taxing us forexhaling, burping, or farting as part of the whole cap andtrade approach.

And while everyone continues to bicker about prop-er ways to reduce greenhouse gas emissions, the worldsoceans creep ever higher, slowly displacing ever-greaternumbers of people. Perhaps more attention should be paidto those who are losing their homes, or even their nations,to rising waters and help them adapt to the new reality ofless land and more water? Thats probably something thatwont be happening in 2010, I bet. s


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january 2010

Ted Pollak,President, EE Fund

Management LLC2009 Video Game Industry

Review and Visions for the Future

Im going to go against the grain here and say 2009was a pretty good year for the game industry, but we just dont know it yet. NPD will not make an an-nouncement that they undercounted sales by billions

and the game publisher CFOs will probably not suddenlyre-state financials, goosing up earnings per share as a sur-prise holiday treat. (Though that would be a sight to see be-cause re-stated financials are almost always negative).

The reason that 2009 was a pretty good year for the

game industry is that it experienced growth across all plat-forms (mobile, handhelds, consoles, and PC) in global mindshare. This mind share is the awareness of and desire touse these magical pieces of hardware and artistic softwareproducts to have fun. The growth in mind share will even-tually translate into sales. So whether its 2010 or laterthat the industry meets and exceeds its historical financialgrowth, when that time comes, 2009 had something to dowith it. Simply put; there is a buildup in demand going on.

Mobile and handheld2009 saw JPRs prediction of Apple dominance in mo-

bile games manifest. Some lay credit to the hardware, withthe iPhone/iPods great screen and accelerometers enablinga new paradigm in mobile phone gaming. Some point to

the software with thousands of fun and innovative gamesavailable. For me it was mostly a function of the softwarepricing model that won Apple dominance in this space.Id like to clarify how I am defining dominance in this in-stance. Dominance is simply being the highest quality andmost adopted mobile gaming experience in relation to thecompetition. It does not necessarily mean a lot of money;though that is relative depending where you sit on the valuechain.

This brings us to an observation about business modelsin the mobile game industry (and handhelds /consoles aswell). The traditional Razor and Blades model (sellinginitially subsidized hardware to profit from software) hasbeen done. The second gen consoles did this. The Bladesand Razors model (creating such desirable software thatpeople buy the hardware) has been done. Nintendogs forDS, Wii bowling, and Halo are a testament to this.

Perhaps the new model could best be described as Ra-zors and Blades and Toothpaste and Shaving Cream andMouth Wash and on and on and on. The phenomenon ofconvergence is squarely upon us. So it becomes harder toanalyze the video game impact. If gaming efforts for a de-vice break even but there is profit from a diet and exerciseprogram used on the device, and the devices purchase mo-tivation was swung by the games; holy multi-faceted pur-chase intent Batman! Industry analysts have their work cutout for them.

OK, enough about Apple. At the end of the day thedepth of the gaming experience just doesnt cut it in rela-

tion to Nintendo and Sony handhelds. Mobile gaming forsomething to do on the train and in line at the store yes; adeep and immersive gaming experience: NO. Accelerome-ters and touchscreens just arent enough to make the gamesreally deep. Take MLB The Show for PSP as an example.

This baseball game is so challenging that it makes use ofall the PSP control surfaces (at least 10 buttons and a joy-stick) and often requires a combination of them. Hardcoregamers are not satisfied with an easy button that allowsa perfectly placed split finger fastball with flip of an accel-erometer. They WANT challenge, realism, and immersion.Hardcore gamers are, always have been, and will always bethe cash cows of the industry. Perhaps voice controls, fuelcells, or Bluetooth game controllers are the answer? Add tothis that people generally dont want to drain the battery oftheir precious communication devices messing around withentertainment, and the handheld gaming industry is still onvery solid ground.

Consoles

High Definition television penetration is a key elementhere. It has been slower than many predicted. However, Ibelieve we are facing an anomalous spike in HD penetra-tion because of the pricing environment. Low-end 40 inch1080p panels are now hovering around $500. This repre-sents a tipping point despite the Great Recession. Once thepanels are in peoples homes the next logical step in homeentertainment build out is to buy a HD capable game con-sole. Nintendo has enjoyed not being subject to this formu-la as the Wii was designed for standard definition.

So out of all of the elements, which influenced thegrowing without even knowing theory, I believe the larg-est influence on this is the desire and awareness of gamingon your TV with third generation hardware. The consolesoffer a high quality experience for an affordable price and

I predict that all three platforms (PS3, Xbox 360, and Wii)will flourish in the coming years. Because of Blue-ray, ex-panded services, and quality games, I think 2010 will be agreat year for the PS3.

On the software front, the greatest accomplishmentsin console gaming in 2009 were the big peripheral games.Rock Band Beatles, DJ Hero, Tony Hawk Ride, etc. Thesegames all come with unique peripherals, which represent atrue shift in console gaming. Again, we are separating in-novative and technological success with financial success.Some of these titles didnt move the units hoped for. Mov-ie-esque gaming should also be mentioned with Uncharted2, Assassins Creed 2, and Modern Warfare 2 all paving theway toward the fusion of games and Hollywood.

PC gamingBehold the PC, the most fantastic, powerful, innovative,

supercalifragilisticexpialidocious gaming device on planetEarth. The most pixels, the most flops, the smartest AI; thecutting edge of computing technology and the software andaccessories to make it shine; this is what makes PC muchmore fun for some people than consoles. While the main-stream press often ignores the PC, there were some very im-portant innovations in 2009.

Both AMD and Nvidia are pushing the pixels even fast-er and AMD and Intel continue to allow massive loads ofbackground gaming calculations with their advances inCPUs. LCD panel pricing has brought 1920x1200 resolu-tions down to about two hundred bucks. Alienware contin-


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ues to market and innovate; leading the U.S. system con-figured mass market boutique performance and enthusiastname brand arena. We saw a very strange decision by HP toseemingly eliminate their efforts in this space after consid-erable investment into this area. Cutting back on their gam-

ing division would have been more logical than dissolvingit and I think they will regret letting Dell be the last manstanding. Of course they could reverse this decision, andstill have lingering IP recognition with consumers for theirBlackbird and Firebird brands.

PC gaming hardware grew just over 5% in 2009, whichis respectable given the dreadful economic environmentand JPR expects 2010 to be an incredible year with growtharound 30%.

For peripherals it was a good year. While flight simula-tion is a niche, it is also a high margin niche. Logitech camethough big time this year with a nice flight simulation con-troller called the G940 which eliminates the bane of flightsim enthusiastthe dreaded pots in their flight sticks.These pots are the contact points and eventually wear out

and fail. Logitech, as far as I know, is the first mass mar-ket company on the block to use a magnet based system totrack movement instead of pots, which makes the actioncontactless and the product truly innovative and advanced.Natural Point was in the mix as well with the TrackIR 5head tracking device. Its really a leap to play an FPS withfree head movement, and ARMA 2 supports TrackIR onfoot, and in vehicles.

On the software front a few advances stick out. ARMA2 and Operation Flashpointare both highly complex mili-tary simulations (which also happen to be huge systemhogs). These were bright spots for the war gamers in a yearthat marked the Call of Duty franchise seemingly becomeconsole-ized. The STALKER modders of course were alsohard at work, as were the MMO companies with expan-sions on many products.

I think there is an opportunity for PC game develop-ers to support the mod community and make some moneyin the process. Instead of eliminating user generated con-tent they should embrace it and allow people to give theircreations away for free if they desire. However Publishersshould also offer the option of partnering with moddersand taking a percentage cut of a mod sale. Sound familiar?Yep, thats the Apple App store model. Developers couldreserve a few bells and whistles for their own paid modsas well to give them an edge on the homebrew folks. In theend this approach makes sense for all involved. Publishersneed to remember that free add-ons enhance the brand andtranslate into sales down the road.

Conclusions with a brief look at the

social games phenomenonSomething is seriously fishy with this whole Zynga hype

and social games in general. Having just raised $180 mil-lion from Russian investors, Zynga has an estimated valu-ation of around $1 billion. This all seems strangely famil-iar if you remember all the enthusiasm around the time ofthe JAMDAT acquisition by Electronic Arts. Ridiculousvaluations coupled with ethereal demand for product. Nowbrace yourselves, here comes my conspiracy theory. Zyngamay have a closer relationship to Facebook than has beenmade public. And in fact there is one link. Zyngas Russianinvestors Digital Sky Technologies also invested $200 mil-lion in Facebook. I get bombarded on Facebook every day

with adds for Zynga games even though I click them offand ask Facebook to hide them.

So, for 2009 Apple sits at the top of mobile gaming butthis will dilute in 2010 with Android in the mix. The hand-held companies are both in comfortable enthusiast and

mainstream markets with the Nintendo DSi and Sony PSP.The consoles had a tough year on sales but a good year onmind share expansion and demand build up. 2010 will seeall platforms sell well with special emphasis on the Playsta-tion 3. 2009 was good for PC hardware and a struggle forthe right business model on the software side. 2010 willbe a fantastic year for PC gaming hardware. Social gameswill see the hype bubble burst, if not in 2010, soon after.OnLive, Gaikai, and the other streamers will also be inter-esting to watch though I dont expect anything soon. I ammonitoring bandwidth penetration, speed, and networkconsistency as the levers for these efforts. Based on the factthat my Comcast connection already becomes pixilated andwith connection interrupts occasionally, we (as a nation)have some data infrastructure work to do. s

Easy predictions

Jon Peddie, President and CEO, Jon PeddieResearch

Afriend of mine, avery smart, andsuccessful per-son, told me, do

the hard stuffdont gowhere everyone else is,

go where theyre afraidto go. He was, and con-tinues to be right.

Its true in forecast-ing too.

The easy forecastslook at todays trendsand extend them to log-ical, or even illogicalfutures, a linear regres-sion model. But the future doesnt work that way, neverhas, never will. Heisenberg, Schrdinger, and Robert Brownhave proven that.

So Im forecasting predictions that will not come true.

Cars will replace horses, electricity will eliminate candlesThat never happened, but widely forecasted by all the

smart people.

All physical media will disappearNewspapers, books, DVDs and CDs will go the way of

the Dodo and 8-track. Oh, right, and TV will replace themovies, video will kill radio, and supersonic flight fromNew York to Tokyo will be a common thing.

Easy predictions; too easyyou should see a big flash-ing red signBeware, Danger.

One of the points I try to make to the press and inves-tor community when asked for who will be the winnersand losers in computer graphics is, you cant assess the in-


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s ons and p d c ons

dustry that wayit has too many moving parts. We havetoo many choices, from netbooks to workstations, mobileto desktop to embedded, powerful discrete GPUs to in-tegrated and soon embedded GPUs. Theres a reason, wehave hundreds of millions of consumers of PCs and they

all want a little something different, different functionality,different prices, and even different looks. Will ray-tracingreplace CGI, will the Macbook Air kill netbooks, will Lar-rabee kill gaming GPUs, will laptops kill desktops? Absurdquestions? Maybe, but I make a pretty good living answer-ing them.

Will the Internet kill DVDs, books, and newspapers? Isthat an absurd question? Before you blow out the candleand answer, think about it. Oh, and while youre thinking,will you turn down that rap music that uses a turntable forcuts and mixes?

But its also too easy to say nothing goes away. Eight-track did go away, although cassettes seem to live longerthan anyone thought. And vacuum tube amplifiers, al-though beloved by rock & roll musicians have a question-

able future. Why? Things go away when no one makesthem anymore. I know, yet another brilliant observation,thank you. People/companies stop making things when thecost of manufacturing exceeds the sales value. (Interestingside notesome companies are still having to be taughtthat just because some customers want your widget, youare not obliged to make it if you lose money on every oneyou build.)

Compulsives and the insecure will want 24/7 connectiv-ity and insist on telling you about the new shoes theyvebought, or what a PITA their boss is. But they would havedone that on the phone, in person, or in a letter a fewyears ago. Nothing has changed on that front other thanthe media. Did you get any Christmas cards this year? Youprobably did, and you also got a few email pictorial greet-ings with a meaningless suggestion to have a happy holi-day, love one another, and dont pick your nose in public.Its not the medium or the message, its the sentiment, thecontact, the reminder that someone is, even if superficially,thinking of you (and theyd probably like you to think ofthem, or their company).

IntimacyWill books go away? Doubtful. People like books; they

like the texture, the colors, the prestige, just as they likethe feel and status of horseback riding, and candle lit din-ners. Things that have an intimacy to them, warmth (likevacuum tube amplifiers, and that is not a pun), comfort,will endure. TV will endure, but so do movies, and radio.We become close to the things we live with.

So when trying to predict the future, look for the rela-tionship people have with the item you think is a potential-ly endangered species.

But take care. Just because your granddad preferredhand milking to using a milking machine personal usageis not a safe conclusion about the future success of a newproduct. You have to balance costs, convenience, efficiency,and style. And, you have to figure out where the new thingis on Kathleen Mahers practicality gap curve. Maybe it isreally is a great new thing, but is the technology, the dis-tribution network, the cultural acceptance in place for it tobe successful, and potentially a vehicle of obsolesce for thecurrent thing?

Too many moving partsWhat Heisenberg, Schrdinger, and Robert Brown tried

to point out, and former Secretary of Defense DonaldRumsfeld tangled himself up with is, we dont know what

we dont know so dont be so damn cocksure of yourself asmy grandmother used to say.

ParalysisThe flip side of course is paralysis by analysis. If one

tries to weigh all the probabilities it doesnt take long torealize you dont have enough data, enough, or accurateenough. Thats when intuition is called for. Thats when itsready-fire-aim time.

Its hard predicting the future. But if you want to be suc-cessful, you do the hard stuff. And if you get it right, andyou wont very often because it IS hard, if you get it right,youll be very successful.

So whats my prediction? Pigs will fly. We will be to-tally connected to each other, for as much of the day as we

individually choose. Our connection will be multifaceted,electronic, visual (think signage), physical (think books andnewspapers, and the odd post card or letter), and of courseaudibly either in person, or in a crowded area with yourmobile phone (and your fellow travelers so appreciate hear-ing you describe what Jim was doing at the office).

The cleverness and novel ways of the connection willastound us. Augmented reality in our sun glasses, mobilephones that double as a hearing aid invisibly tucked in orbehind our ears. Cameras woven in our clothes, and trans-lation services in the cloud to tell us what that street signsays in our language. And when we get on the train, bus,subway, ferry, or airplane well still read a newspaper orpaperback book for as long as someone can make a profitbuilding themeven though all those vehicles will havewireless Internet coverage.

Epilogsome small advice. If youre not in the forecastingbusiness and you make a prediction, youre probably wrong.If you are in the forecasting business, spend more time tryingto disprove your prediction then promoting it. s

With special thanks to the work of Frank Stella. We have used

photos of his sculpture displayed on the roof of the Metropolitan

Museum of Art, fall 2009, in New York to illustrate the entangledideas of new technology.

JPR Supplement 2010

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