By David Rocks and Kenji Hall
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Each January, the world's gizmo freaks, gadget heads, and general arbiters of cool descend on Las Vegas for CES -- the Consumer Electronics Show -- a four-day look at what the world's electronics makers are planning to wow consumers and fatten corporate wallets with. But those really in the know make a point of dropping in at a similar -- if smaller -- show in Japan called CEATEC, or the Combined Exhibition of Advanced Technologies, each October. A visit to CEATEC, at the Makuhari Messe near Tokyo, shows what kind of snazzy stuff might be on display in Vegas three months from now.
As always, CEATEC offered glimpses of technology that isn't quite ready for prime time -- but reeks of cool. Mitsubishi hit a home run with a prototype phone that may be among the most pleasing new devices to come along since the original iPod. The clamshell handset looks pretty standard: It has a smooth white or silver surface. But underneath its skin, the phone glows red, blue, or green to display the time, a message-waiting icon, or groovy graphics.
COOL RABBIT. Open it up, and you'll see two big, bright screens. The bottom one is touch-sensitive and pops up with a keypad for dialing or other contextual menus for instant messaging, taking pictures, and more. Best of all, each time you touch the screen, the phone vibrates ever so slightly to give you the sensation that you have actually pushed a physical button. The phone's weakest point is its software, which isn't as intuitive as it should be. But overall, a great effort.
In the same vein is a voice-activated remote control from Hitachi (HIT) -- one of the goofiest concept products at the show. The device looks like a foot-high rabbit's head that you place atop your TV set. When you start talking to it, the bunny quickly figures out what direction your voice is coming from and then turns toward you.
It flops its ears around and blinks at you like a Hello Kitty doll might, but it also recognizes your face and tailors the programming to your preferences. It's hard to imagine why anyone would ever need such a thing, but it's mighty cool and may well lead to some products down the line that are actually useful.
TV AS SCULPTURE. Somewhat more practical is a Sharp (SHCAY) TV screen that can show two entirely different images when viewed from different angles. It works sort of like those old postcards that show a dinosaur's skin when tilted in one direction and the bones when tilted the other way.
This may never be a big seller for living-room use, but Sharp is pitching it as a solution for car-navigation systems. Place the set in the middle of the front console, and the driver can see a map and directions, while the passenger can watch a TV show or movie. Toyota (TM) has already started offering the screen in some models in Japan.
TVs more or less dominated the show, and that's an area where manufacturers really flex their muscles. Sharp this year upped its biggest production LCD TV to 65 inches -- up from 45 inches last year -- which it's selling for about $14,000. Panasonic, a unit of Japanese electronics giant Matsushita (MC), meanwhile, has sharpened the picture on its 65-inch plasma model and expects to price it at about $8,700.
One Taiwanese company, meanwhile, has gone way beyond chrome and black to design flat-screen TVs that are as much fun to watch when they're turned off as when they're turned on. Hannspree offers a set shaped like a basketball, another like an apple (it opens to reveal the screen), and yet another like Cinderella's carriage. The company has licensing deals with the National Basketball Assn. and Disney (DIS). It expects to sell the 50 or so models for $500 to $700 through its own retail outlets in the U.S. as well as Macy's, Target (TGT), and Neiman-Marcus.
HEARING CONSUMERS. CEATEC marks Sony's (SNE) first splashy public event for its new flat-panel TVs, with a spanking-new brand name, Bravia. The lineup is an attempt by new CEO Howard Stringer and his team to distinguish the company's flat TVs from its old flagship Trinitron cathode-ray-tube models that are looking a bit long in the tooth. Though the TVs -- ranging from $1,500 for a 26-inch model to $3,500 for a 40-inch one -- look great, the picture isn't quite as crisp as Panasonic's.
Sony also showed its new Walkman digital music players, which resemble smooth river stones and come in eye-catching hues of cobalt blue, pink, and gold. At 182 grams, the heftier 20-gigabyte size stores 10,000 or more songs and is expected to sell in Japan for $310, starting on Nov. 19. There's also a slightly smaller 6-gigabyte version and a perfume-bottle-shaped player with 2 gigabytes of flash memory for less than $200.
One sign that Sony has learned from past mistakes is its focus on the players' software, which should make it easier to download and manage tunes from the company's online music store. Sony officials have also said the new Walkmans will be able to play standard MP3 files in addition to songs stored in Sony's proprietary technology. There was also a docking station with speakers, much like Apple's (AAPL) iPod has, and a bigger prototype stereo that can play songs directly from a Walkman.
EARTH-FRIENDLY HANDSETS. Handsets are the other big category, and just about everyone was showing models that morph into MP3 players and cameras. Most of these triple-play devices look less like traditional handsets than they do cameras or music players.
And TV is continuing its march into the cell-phone zone, with Japanese carrier NTT DoCoMo (DCM) marketing new models that can pick up broadcasts. Sharp, meanwhile, came up with the nifty idea of including a low-power FM transmitter in its MP3 players, so you can broadcast your tunes to your car radio while driving. DoCoMo displayed loads of nifty models. One series sported a white leatherette cover. Another was a shiny Ferrari-red, while still others were pink, green, and orange.
Much more innovative was a prototype Bluetooth wireless headset that's a ring you wear on your index finger. When you want to answer a call, you tap your finger and thumb together, then stick your finger in your ear. The ring uses a bone-conduction technology that effectively makes your finger the speaker. It really works -- though it's unclear how many people will want to walk around with a digit in their ear.
Also in the gimmick department, DoCoMo showed off some prototype "eco-phones." Since so many handsets get thrown out after just a year or two of use -- especially in trend-conscious Japan -- the company wants to make phones that are more easily recycled. To that end, it created a handset made of plastic derived largely from corn oil, which is supposed to break down more readily than common plastics. Not to be outdone, DoCoMo's arch-rival, KDDI, was showing its own recyclable phone across the aisle.
METHANOL POWER. Toshiba and Hitachi had prototype devices powered by fuel cells. Hitachi says its fuel cell can run an MP3 player for 60 hours on just 10 milliliters (0.338 fl. oz.) of methanol. And Toshiba says its phone will run 2.5 times as long as a standard battery-charged model on 7 ml (0.237 fl. oz.) of methanol.
But these aren't quite ready for prime time: Both are about twice the size and weight of non-fuel-cell models. Another obstacle is international regulations forbidding passengers from carrying methanol on airplanes -- even though the kind used in the devices isn't flammable. Many countries are scheduled to do away with such rules by 2007, and both companies say they aim to have products ready for sale by then.
A bit less sexy, but always important, is home networking. Consumer-electronics companies have long sought to make it easier to shuttle music, videos, photos, and other data from PCs to the living room, bedroom, kitchen, or patio.
OLD WIRING'S NEW LIFE. The effort is poised to make a leap forward. A group of 21 electronics and software makers have formed a group called the Digital Living Network Alliance, which aims to create a service mark that guarantees consumers that electronic gear will hook up to a network and recognize other gadgets with a minimum of fuss. It means a Sony Vaio living-room server could order a Samsung DVD player to beam video to a Toshiba digital TV -- and so on. Still, none of the consortium's products are on the market, so check back next year for another progress report.
Another home-networking technology seems to be gaining more traction. Panasonic, Sony, Mitsubishi, and others have developed a new standard allowing existing electrical wiring to be used to create a data network in the home. This idea has been around for a while, but it hasn't really taken hold. New systems demonstrated by Panasonic and Mitsubishi using the standard promise to make it much easier to set up such networks.
Panasonic says you need only plug two paperback-book-sized boxes into electrical outlets, simultaneously push buttons on each, and the network will be up and running. After that, simply plug a computer, TV, phone, or other device into the box. The boxes offer data throughput of 90 mbps, plenty fast for several HDTV feeds at once.
JUST A PHONE. And encryption software ensures that your data won't leak into your neighbor's apartment. Neither company announced pricing -- Panasonic says it will do so at CES, while Mitsubishi will wait until a bit later in the spring. But both said they aim to sell the boxes below $100.
And finally, in the department of really great ideas, Mitsubishi showed off another fantastic device: A simple cell phone that resembles nothing more than, well, a phone. It has big keys and a screen that shows only the time and the number that you've dialed or that is calling you. It's simple, elegant, and totally practical. Not something you're likely to see at CES.
Rocks is BusinessWeek's senior international news editor, and Hall is a BusinessWeek correspondent in Tokyo