At the 2008 International Consumer Electronics Show (CES), the great drama of the Blu-ray winning over the HD-DVD standard brought great excitement. By contrast, the 2009 CES has appeared to be a somewhat dull affair. Although there were a comparable number of exhibitors and visitors crowding Las Vegas hotels and streets, this year’s exhibition could be best summed up as the digestion of technological developments, aligning thinking over industry trends and a user experience survey on application level.

Although this year’s CES left little in an unforgettable spotlight, these still waters run deep, and it is increasingly clear that a great evolution is coming.

Those in attendance at the exhibition got the impression that the number of digital displays in use at the venue was the largest compared with previous CES events, especially the number of LCD screens. With the omnipresent LCD screens ranging from two to 108 inches and the wide variety of high-definition (HD) videos streaming on them, one would almost have been mistaking the event for the World Expo of flat panels.

Although digital TV monitors accounted for just 15% of the actual sales revenue of the entire consumer electronics industry in 2006, the sector has almost become a byword for digital display at the CES. As a result, you may have needed to carry out an extensive search to locate other products which were overshadowed by the presence of flat panels. The booths displaying other products were also covered with LCD screens, which were not only used for demonstration but more often served as display terminals for other products.

The US government has mandated the halt of analog TV broadcasting to allow the progress of digital television. This potentially huge market has saturated the entire consumer electronics industry with ‘ideas’. In an era when the terminal is king, can digital display devices kick away PCs and empower TVs to start the ‘3C Convergence’ (Computer, Communication, and Consumer Electronics) blockbuster which has been the source of conjecture for over a decade?

At this year’s CES show, Japanese electronics giant Sony Corporation led the fight for the protagonist role. While more people focused on Sony CEO Howard Stringer, who took out the world’s lightest 8-inch full-featured notebook from his suit pocket, which could beat the ‘letter’ from Apple CEO Steve Jobs, Sony’s efforts in starting to integrate network applications into televisions are most noteworthy.

Sony announced the first networked Bravia LCD HDTV model-‘Bravia Widget’-with Internet applications, which delivers real-time information with an existing broadband connection or via utilizing the Internet link capacities. The service offers one of the largest selections of free and premium movies, TV shows, sports, music and more from an array of partners like Amazon Video on Demand, YouTube, Yahoo! and Slacker. Bravia Internet Widgets, powered by the Yahoo! Widget Engine, expand and personalize the TV experience by adding on-screen applications that provide such real-time information as weather reports, stock ticker updates, financial news, Yahoo! Video and Flickr images.

Sony’s victory in the format war over high-definition optical discs in 2008 actually paved the way for it to conquer the HD eco-system. This time, Sony has further pushed HDTV from an ‘audio-visual entertainment terminal’ to the broader boundaries of ‘infotainment terminal’. In fact, a most evident trend at this year’s show was that a large number of consumer electronics companies are moving closer to the Internet, whether through the TV connections or a device to connect the Internet with TVs as display terminals.

These products may not necessarily sell well, as they lack unique innovations in the network applications. However, these kinds of network applications designed to gauge potential market demand reflect that an increasing number of enterprises have started to realize that their products can become more powerful, more dynamic and more scalable digital terminals once connected to the Internet.

Sony’s Internet TV looks very simple, and even leaves the impression of low technical content. On the contrary, it should actually be carefully studied by those companies who are desperately pouring their capital and R&D resources into developing thinner LCD TVs. As the thickness of LCD TV has already been squeezed to just a few centimeters, its market demand has already shrunk.

Although a razor-thin TV is a laudable piece of art, the mass market has never been sensitive to art, which is amply displayed in the sales of Apple’s Mac Air notebook. The innovation of developing a soy sauce bottle as expensive and sexy as a perfume bottle is bound to be a costly endeavor.

At this point, thinking about the competition factors in the TV industry from the perspective of the Internet may be more enlightening. For example, for a 52-inch TV screen, what kind of web-based services could be introduced, which a 17-inch display can’t provide? Whether a TV’s computing and memory modules should be enabled with adaptable upgrade capability? Whether its operating system and applications should be based on an open architecture? What kind of external devices can increase the frequency of TV usage and the user experience given sophisticated applications?

Gary Shapiro, president and CEO of the Consumer Electronics Association, believes the combination with Internet technologies is the key to fuelling the industry’s future growth. Although the economic recession is slowing down the development of the consumer electronics industry, Shapiro noted that new technologies and applications in the sector actually blossomed during the serious 2-year recessions in the 1930s, 1980s and 1990s respectively. Radio and color imaging technologies in the 1930s, home video equipments and CD players in the 80s, and the explosive growth of digital terminals during the 1990s are examples. Evidently, now it is the turn for convergence with Internet technologies.

Judging from this year’s show, the consumer electronics world belongs to TV, and the incoming tide of digital TV development is set to be the main driving force behind the consumer electronics industry in the years ahead. It is fair to say that the next leap in this industry will be hinged on Internet-based applications. Those who can find the path leaping towards the Internet Age earliest will lead the industry’s future.