RetailVision Fall '04 Round Up
By ChannelMedia Staff

SAN DIEGO - There was another RetailVision and another great turnout once again confirming that RetailVision is the only event for the retail industry to get together, move business and relationships forward in a meaningful environment. Among the top 100 Retail Organizations represented were all of the major players, including strong representation from CompUSA, Best Buy, J&R, Zones, PC Mall, WalMart, Amazon and eBay. This show had veteran Vendors like Seagate and Altec Lansing to start up ventures like Sling Media, Haansoft and Syntax who all drew a lot of attention at the show. The Fall show also introduced RetailVision Latin America, which had Retailers from many of those countries including Brazil, Chile, Argentina and Mexico. All of that and a few animals from the San Diego Zoo (at the Welcome Reception) and a private night aboard the USS Midway for the "Best of RetailVision Awards" , hosted by the very funny John Heffron, winner of the hit TV show "Last Comic Standing, and followed by the famous Ingram Micro sponsored "Top Gun Party" made this another great event.

"We had one of the most diverse RetailVision's ever and from Vendor to Retailer to distributor to service provider the response was the same - this was an invaluable event for moving our business forward," said Pete Prentice, Senior Event Director.

Show Highlights
By Keith Newman and Bob Straight

Seagate not only had its strong line of USB-2 portable drives and 1-inch pocket drives to promote, but the Company also rolled out its industry leading "5 year warranty program" along with a new sales rep training program. For more details see www.seagate.com.

Haansoft presented the "affordable alternative" to Microsoft Office, and without Microsoft in attendance, the relative newcomer got a lot of attention. The program, which includes a write, spreadsheet, and presentation program works on Mac, Windows and Linux machines and sells for only $49.

Another innovative company at the show was Sling Media, which presented The SlingBox Personal Broadcaster, a product that extends a user's LIVE Cable TV, Satellite TV or personal video recorder (PVR) experience to any of his or her connected personal devices. SlingBox also claims to deliver a complete personal TV experience to networked PCs, WiFi-enabled laptops and PDAs, and even video-enabled mobile phones. Any device. Any network. Anywhere in the world. It drew a lot of attention from the attending retail audience.

Mobile Edge created quite a stir with its fashionable yet practical line of computer cases, messenger and tote bags (see www.mobileedge.com). The company has expanded its lineup to a very broad and rich assortment of products for the mobile professional and consumer.

Mobile Edge also recently announced the hiring of retail veteran Chuck Gangi as Director of Sales. The addition of Gangi, formerly of Targus, to the Mobile Edge team signifies the company's commitment to building its retail business by establishing long-term relationships with the key consumer electronics Retailers. "I am thrilled with the opportunities and vision that Mobile Edge offers as a company," said Gangi. "The fresh approach and emphasis on style with innovation is so appealing in today's 'me-too' world. I have personally seen many companies come and go in this industry, but Mobile Edge's vision, their industry experience and their timing is what this market segment needs right now!"

Buslink Media announced a major expansion of its line of storage peripherals. In addition to USB 2.0, Fire wire and Serial ATA combination external hard drives, Buslink now adds stand alone Serial ATA hard drives with and without a serial ATA card. Buslink Serial ATA drives when connected directly to the Serial ATA port may be configured to be "Bootable" should the internal hard drive fail. New PCs shipping with a Serial ATA bus, for the past year, will run three times faster than an IDE bus. The new SATA hard drives are available in 120, 160, 200, 250 and 400 GB capacities. Buslink has also introduced its unique USB Hi-Speed Cipher Shield External drives with Cipher Shield^TM security key. This series of drives incorporates an encrypted chip on the motherboard that matches the encryption on the security key. The anti-theft design is in response to the growing concern by corporations and government institutions for greater security. Also, new government regulations (DOD) disallows back up data on disks. Also introduced is Buslink's high speed, Network Attached Storage (NAS) products available in 160, 200 and 250 GB capacities. The NAS units combine network access and data storage in one simple to install unit. The full function file server can be installed in less than 15 minutes. The Web based operation system is pre-installed and pre-configured. The NAS units feature Ethernet connections, allowing it to freely switch roles as a network and local storage device. No need for additional hardware or software or user license purchases. A built-in FTP server can be configured via web browser.

ALOM Technologies CEO Hannah Kain was in the Solution Provider area sharing its latest contract packaging and fulfillment programs. The Company, which supports leading brands across multiple industries (HP, Sun, Lexar Media), has been in operation since 1997. "Our customers want to reach different distribution channels so we must have flexible systems to integrate with all types of ordering systems, small and large systems, all channels, and IT systems that can tie into real time info systems and manage assembly and distribution. We tell our customers to do marketing and sales….we do all the nitty gritty, we sweat the details."

The pocket-sized LaCie Silverscreen is a new kind of hard drive. It plugs directly into TVs for instant playback of stored movies, music or photos. With HDTV-quality video and Dolby® Digital or DTS quality audio, there's no compromise on performance. Use the included remote to easily navigate through the menus to select your video and audio settings and watch your movies. Transfer your movies, music and photos from your PC to the LaCie Silverscreen and then sit back in comfort as you enjoy the show. The LaCie Silverscreen allows you to choose from MPEG-1, MPEG-2 (AVI, VOB, ISO) and MPEG-4 (AVI, DivX®, XviD) video formats for easy playback. And the LaCie Silverscreen offers several different connectivity options: NTSC/PAL composite and S-Video, SCART, component video (yPbPr) and VGA A/V.

SYNNEX had its eye out for unique products that would allow the major distributor to leverage its distribution strengths and help Vendors bring products into the retail channel. Among VP Mike Del Vecchio's focus is Internet and innovative input devices. At the show, they were presenting Mobile NoteTaker and Trend Micro products.

Antec has launched Phantom, its first completely fanless PC power supply. Intended for noise-sensitive PC users and specialty applications, the powerful 350-Watt unit has been completely designed from the ground up with silent, fanless operation in mind. It features ultra-high efficiency circuitry (85% efficient) that reduces power consumption and excess heat, and an aluminum casing that acts as a heatsink and eliminates the need for noisy moving parts. In addition, Phantom's compliance to the latest ATX12V v2.0 standards ensures compatibility with the newest motherboard releases from all leading Vendors. For improved system stability, Phantom includes professional grade features such as dedicated voltage outputs, advanced voltage-feedback circuitry and dual +12V output circuits to provide server-quality power. Phantom also comes equipped with two SATA connectors to power Serial ATA drives, and a special six-pin PCI Express graphics card connector for high-end graphics cards. Integrated server-grade protection features such as over-temperature, over-voltage and over-current protection guarantee system reliability. "In the home and office, PC users are fed up with irritating PC noise. They want to play games, enjoy entertainment or concentrate on work - not be constantly distracted by the whine of a noisy computer," said Scott Richards, Antec worldwide vice president of sales and marketing. "Phantom achieves a level of silent performance that could not be achieved by a simple modification of a standard power supply design, and ensures that PC users can experience the total silence they crave without sacrificing the power and stability required for their ever-growing PC needs."

Tentoe introduced SKU Launcher, which breaks down the difficult and expensive process of updating and distributing current product literature to an array of channel partners in real time.

Another company in the world of advanced digital displays is Nikada, a relatively new company looking for retail partners to promote its impressive line of "Tier 1 quality" TV products, said president Albert Wu. The company launched two lines of products - 1 in all - of flat screen LCD and plasma in a variety of sizes.

Altec Lansing announced the release of its AHP712 Active Noise Reduction headphone, a new, premium addition to the company's line of high-performance personal audio products. Designed for on-the-go music or multimedia lovers who demand the best in quality, the AHP712 measures ambient noise across an unusually wide range of frequencies, then creates counteractive sound waves that reduce outside distractions to deliver the best audio experience possible. "Altec Lansing's new AHP712 is ideal for frequent travelers who love movies, music or games, but who often deal with outside distractions like jet engines or subway noise. It can be used anytime, anywhere, even without entertainment output, for those who simply crave quiet," said Bob Garthwaite, Senior Vice-President of Sales & Marketing for Altec Lansing Technologies. "The AHP712's outstanding comfort and exceptional active noise reduction capabilities make it the perfect audio companion for people on the move." Unlike passive noise reduction systems that only muffle ambient sounds, ANR systems use special earcup microphones to sense offending noise. The systems then produce diametrically out-of-phase sound to virtually eliminate the distraction. Altec Lansing's new AHP712 headphone with Active Noise Reduction technology is priced at $149.95 (MSRP) and will be available in October at leading consumer electronics and computer Retailers. The company also sells the AHP712 direct from its corporate website.

Digital River signed an online retail agreement with PC Universe, a specialty Retailer of hardware and software products that allow PC Universe to market and resell Digital River's extensive downloadable software catalog via its new online store located at www.pcuniverse.com. Digital River's catalog features brand-name software titles from leading software publishers. In addition to building and hosting PC Universe's online store, Digital River is handling payment processing, fraud prevention, e-marketing, reporting, customer service and digital fulfillment. "The shift from physical to digital software delivery continues to build momentum among software publishers and online Retailers," said Joel Ronning, Digital River's CEO. "By helping them expand into e-commerce channels, we can help them reduce costs associated with product merchandising, inventory and delivery while increasing sales opportunities. We believe our downloadable software catalog is one of the largest in the world. As channel partners, Retailers can leverage it to quickly build a considerable software offering and publishers can utilize it to maximize their product exposure." Shoppers on www.pcuniverse.com will find the new downloadable software catalog located via a link from the home page. The catalog features thousands of titles, including industry-leading software products for virus protection, Internet security, digital imaging, DVD/CD authoring and networking. "We are always looking for new ways to differentiate ourselves from the competition and increase the value of our content for our customers," said Tom Livia, PC Universe's COO.

V Communications announced that Final Bid^TM, a new on-line auction bid manager, is now shipping. Designed for eBay® users, Final Bid manages auctions and places bids for items at the last possible moment, increasing the chance of users winning at a lower price. "Final Bid is very unique and will greatly improve the online auction experience," comments Travis Sehestedt, VP of Sales and Marketing for V Communications. In a typical online auction, users compete against each other, upping the price long before the auction closes. With Final Bid doing the work, bids remain hidden until the last minute, where Final Bid can often outbid anyone at the last second, using small increments up to a user's pre-set maximum price. Professional bidders have been using this technique manually for years, but now anyone can do it with Final Bid - and outbid the professionals! Installation is quick and works easily with eBay auctions with a minimal amount of setup. Once installed, Final Bid is ready to go to work placing bids just before the auction closes, bidding for items much faster than bids placed manually. Users can win more auctions due to the speed of the final bidding process. Final Bid includes a powerful group-bidding feature. As is often the case, there may be multiple auctions for identical items, and this feature lets the user bid on all of them and win only one.

Syntax Chief Executive Officer James Li was at RetailVision previewing the company's 32 and 37-inch LCD TVs that will be introduced in October. The Company has been shipping 20, 27 and 30-inch units into several major retail chains. When asked about the quick ascent into a very crowded field, Li said, "We offer a high quality unit at a significant price advantage than the rest of the field." Li added that the Company's manufacturing and design abilities along with several unique partnerships allow the Company to hit unique consumer price points.

PriceGrabber has blossomed into a leading source directing buyers to web sites in the computer and consumer electronics marketplace and they were at RetailVision presenting new tools and technology to help Vendor and Retailer partners better leverage their service.

mUrgent VP, Business Development Tom Reese was promoting the Company's industry leading e-marketing productivity software solutions, called Empact.

AskNet is a budding electronic software distributor who has emerged as leading player behind Digital River. AskNet handles credit card transactions, hosting, processing, digital rights management and a slew of other features. The company had built a high level of customer interest for its services at RetailVision.

Current Analysis (formerly known as ARS) has introduced several new information and research services to Vendors and Retailers alike.

AVerMedia has accepted an invitation from Microsoft to join the Microsoft Consumer Experience Partner Program, one of the company's most visible consumer initiatives. The Microsoft Consumer Experience Center, open to select Microsoft industry partners worldwide, gives consumers the opportunity to see how leading technologies combine with Microsoft products and services to create a complete digital experience, combining PC multimedia and home theater applications for end-users worldwide. AVerMedia digital convergence products are bridging home entertainment platforms of the future--personal computers, televisions, and home theaters--with software- and hardware-based consumer products that support a wide range of user interests. AVerMedia solutions allow people to watch TV on their PC, turn their PC into a PVR, use an LCD monitor at a TV or with any video game console/DVD player/VCR, transfer VHS video onto DVD, share digital photos on a TV, and perform other desirable home and business tasks. AVerMedia was chosen for the Microsoft Consumer Experience Partner Program based on its unique product set and innovative convergent media technologies. Inclusion in the program will mean exclusive exposure for AVerMedia at major international trade shows and other public events; the company will also be featured on web broadcast video segments and at the MCX Center, a permanent exhibit at Microsoft's Redmond, WA, headquarters. "AVerMedia views its membership in the Microsoft Consumer Experience Partner Program as a singular opportunity to extend its visibility to consumers," said Arthur Pait, President of AVerMedia Technologies/USA. "The MCX Partner Program is a wonderful affirmation of the value of AVerMedia products in the next generation of consumer digital technologies. This is an exciting opportunity to work with Microsoft, combining cutting-edge multimedia technology with user-friendly and comprehensive solutions." "To fulfill the goals of the MCX Partner Program, Microsoft has searched for those technology leaders that exhibit quality, innovation and vision in responding to consumer technology needs. AVerMedia is meeting those criteria with its range of multimedia convergence products," said Kate Carcelen, Director of the MCX Partner Program at Microsoft Corp.

In a perfect example of `less is more,' Altec Lansing unveiled its MX5020 music and gaming stereo speaker system--a breakthrough two-piece product that, by eliminating a subwoofer and adding MaxxBass technology, gives listeners more dynamic sound than they ever thought they'd hear from a 2.0 speaker set. Smart, sophisticated, yet simple, the MX5020 packs incredible audio output within two stylish cabinets just 5.2"W X 2.5"D X 10.2"H. Each speaker contains a 3" full range driver and 1" horn loaded tweeter to deliver rich, expressive sound capable of capturing the most delicate flute solo as well as the wildest gaming sound effects. "The MX5020 system offers 2.1 system performance in a 2.0 package," said Bob Garthwaite, Senior Vice President of Sales and Marketing for Altec Lansing Technologies. "Its sleek, minimalist design is ideal for offices, dens or other rooms with space issues. Yet its output will surprise and please even the most discriminating audio lover." Altec Lansing's MX5020 powered stereo speakers, suitable for either wall mounting or bookshelf use, are enveloped in a jet black, high gloss piano finish.

DigiPower a leader and innovator in universal power supplies for digital cameras and cam recorders announced several new products. Maurice Mizrahi, President demonstrated the DigiPower ACD-100 universal AC Adaptor. It is the first adaptor that allows the user to set the exact power requirement for their device. The digital camera travel charger works in over 50 countries and is compatible with 17 different batteries. The new universal auto power adaptor provides power for most devices including cell phones, cameras and MP3 players.

8x8 Inc. was the talk of the show with the success of their new videophones. The question we posed was ‘Why will videophones now be successful?” Regina Wedemann, VP Retail Sales states that the quality and reach of broadband and affordable hardware combined with a service model is the difference. The service element enables customers to receive the level of customer support they are accustomed to and demand. Retailers also benefit from a residual income based on subscriptions. According to the number of new subscribers it is apparently working.

Also this holiday season 8x8 is working with the Star Bright Foundation to give kids in children homes a chance to see and talk with Santa.

American Anko announced a new licensing deal with Universal Studios to manufacturer CD cases and game controllers with Universal characters

Advueu Displays announced new lines in LCD TV’s, portable DVD players and LCD Monitors. Adveue is unique in that they are the factory and retailers have the ability to be apart of the planning and development process. Advueu offers retailers pricing and service advantages. Perry Scheer, VP Sales and Marketing states, “We are reaching great price points with great quality with lower return rates.

eBay presented a new series of programs featuring a trade in program. Manufacturers can sell inventory on eBay through Deal Tree. Deal Tree with take the product, sell it and provide a credit to the manufacturer. It is currently live at Zones and doing extremely well.

RetailVision Award Winners

The leading Retailers of North America and Latin America recognized the Vendors of consumer technology for their product innovation and channel strategies at the "Best of RetailVision Awards" held during the RetailVision Fall 2004 Event, September 7-10 at the Manchester Grand Hyatt in San Diego, California. For the past 14 years, the awards at RetailVision have been acknowledged as one of the computer retailing industry's leading honors.

Over 200 top 100-level Retailers from North America and Latin America voted on the "Best of RetailVision Awards" at the Fall 2004 Event. The first-ever Latin America awards were voted on by nearly 40 premier Retailers from Argentina, Brazil, Chile, Mexico, Peru, and Venezuela - part of RetailVision Latin America, a separate Event co-located with RetailVision.

"The RetailVision Awards have always reflected the best of the consumer technology marketplace because they are voted on by the top Retailers in North America," said Pete Prentice, Senior Event Director for RetailVision. "This year, the awards take on a truly international dimension because of the new Latin American program at RetailVision. For Vendor winners and nominees, the awards recognize outstanding market leadership, and further point out the exciting global partnerships being built in all corners of the consumer channel."

RetailVision Fall had more than 200 Vendor companies showcasing new products. The winners and nominees of the latest "Best of RetailVision Awards" are as follows:

Best Vendor: AMD Belkin LaCie Logitech Seagate Technology Winner: Belkin
Best Hardware: Axentra Belkin LaCie Sling Media Wacom Winner: Sling Media
Best Software: ALK Technologies Corel Executive Software Final Draft You Software Winner: Corel Corporation
Best Accessory: Avenues in Leather Belkin Easy Products Jasco Logitech Winner: Easy Products
Best Digital Home: AMD Axentra Sling Media Syntax Groups TomTom Winner: TomTom
Best Peripheral: Archos Technology Belkin Logitech ParkerVision Sling Media Winner: ParkerVision
Best Merchandising: Belkin Jasco Logitech Wacom WILIFE Winner: Logitech
Best Retail Strategy: Adobe Systems Belkin Corel IOGEAR ZyXEL Winner: Belkin
Best Presentation: AMD InFocus Lexar Media Seagate Technology Synapse Micro Winner: Lexar Media
Best New Technology: ALK Technologies Archos Technology Belkin ParkerVision Sling Media Winner: Sling Media
Best Vendor - Latin America: Avenues in Leather LaCie Logitech Winner: LaCie
Best Retail Strategy - Latin America: LaCie Logitech Teledex Winner: Logitech

Congratulations to the winners and all the nominees.

For further information, please contact John Hurley at 603-471-4228, or Eda Fantasia-Campo at 603-471-4207, or visit the Web site at www.retailvision.com.

The next RetailVision in North America will take place April 5-8, 2005 at the Hyatt Regency Grand Cypress in Orlando, Florida. For information on all worldwide RetailVision Events, visit www.retailvision.com.

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RESEARCH

Product Briefs

Nearly half of video game players watched less television last year or plan to cut their viewing time this year, according to a report issued on Thursday that lends credence to industry fears that young men are switching off the tube. The Ziff Davis Digital Gaming in America survey found that 26% of gamers had cut their TV watching over the last year, and a further 20% expect to do so this year. Television ratings provider Nielsen Media ignited a storm of controversy among network executives last fall when it reported a 7.7% decline in prime time viewing by men aged 18 to 34. Nielsen cited growing competition from video games and DVDs. Studies have shown that the average game player is 29 years old. The Ziff study, a random poll of 1,000 people nationwide, was conducted in May and June by the Strategy Group. It is published annually. The research also found that game players are not just sitting in their living rooms. Half said they play games on their cell phones, for an average of 4.4 hours a week. They also spent an average of $19 in the last 60 days on phone games, the study found. Some networks had suggested that Nielsen's sampling was flawed, and Nielsen said about half the decline could be explained by changes in the composition of its ratings sample and in the way it measured data. Earlier this month, Nielsen said viewership in the first eight weeks of the summer season by men aged 18 to 34 was down only 3% for the four major networks.

Organizations are embracing converged voice and data applications to reduce the cost of their internal and external communications systems; streamline management of voice and data networks; and improve productivity throughout their operations, according to new research released today by CompTIA, the Computing Technology Industry Association. More than one-half (52.1%) of organizations participating in the study said they currently use one or more converged applications. In organizations of over 1,000 users, that figure rises to 73%. Fax servers and web conferencing solutions are the most frequently deployed converged applications in use today, followed by unified messaging, internet protocol (IP) phones, call center applications, soft phones, and voice-over-IP application servers. In addition to the organizations using converged applications today, 7.6% of responding companies said they are currently in the process of deploying one or more converged applications; 9.7% are budgeting for and evaluating converged applications; and 30.6% are planning to evaluate converged applications in the next 12 months. "Efficiency, cost-containment and network integration are the key buying triggers for converged applications and services," said Edward Migut, Director, CompTIA Convergence Group. "Organizations believe that converged applications will provide them with enormous flexibility to manage and administer voice and data networks together through familiar interfaces; and add features and functionality at the server and desktop level." By a wide margin (81.5%), reducing cost is the most important buying factor for organizations that currently use or are evaluating the purchase of converged applications, the CompTIA study found. Return on investment is another key driver for many organizations (77.5%), followed by easier administration (75.5%). "This clearly indicates that corporate buyers are no longer content simply to spend money on a product that's better than last year's model," said Alan Borck, President of ARC Communications Ltd. of Piscataway, NJ, a member of the CompTIA Board of Directors and Chairman of the Association's Convergence Group. "Buyers must be able to demonstrate to executive management that a purchase will either lead to cost savings, or deliver productivity gains with a short-term - often six months or less- payback on the investment." Organizations believe that the deployment of converged applications will deliver benefits throughout their operations, with the most significant productivity gains occurring in sales and marketing (46%), internal communications (40%), call center/customer service operations (39%), and external communications (36%).

CONSUMERS SPENDING TURNS CONSERVATIVE
Even though consumers are satisfied with the performance of brand name products, they are more cautious about spending their hard earned money on the newest hot item on the market. Consumer spending increased by only 1% in the second quarter, as climbing interest rates, higher prices, and a weak job market caused shoppers to consider purchases more carefully. These results, from a recent survey by the American Society for Quality and the CFI Group, indicate that manufacturers and Retailers may have to lure customers to open their wallets with more competitive pricing and sales. Several brands were particularly popular with consumers. Online search engine Google earned a satisfaction rating of 82 on a scale of 100, while Apple Computer posted the highest rating ever for a PC manufacturer with an 81. Apple gained 5.2% over last year's rating, boosted by the success of the company's iPod portable music player. Overall, satisfaction with consumer electronics fell by 2.4%, while the automobile industry dropped 3%.

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HP Inks New Standards in Consumer Photo Printing
By: Amber Shore Imaging Industry Analyst

On Friday, August 27, HP launched an impressive digital entertainment product line that is expected to dominate sales this holiday season. The company's new lineup includes TVs, an entertainment hub, and the HP iPod for Apple, to name a few. The new product offerings signify trends of the times: all tech-savvy and sophisticated products geared toward the formative 12-34 year old demographic. However, to printer analysts everywhere, one aspect of the launch clearly overshadowed the ability to print tattooed casings for the new iPod and that was the announcement of Vivera, HP's first generation of branded inks. With Vivera, HP has not only hit the $0.29 per print sweet spot for printing borderless 4"x6" photos, but the company has set a new standard in terms of cost per print (CPP) and longevity that competing manufacturers including Canon, Dell, Epson, and Lexmark must immediately respond to in order to remain competitive.

Vivera: Cost, Control, Convenience
Analysts patiently (and some not so patiently) waited for HP to launch a CPP as competitive as Epson. The Japanese manufacturer surprised the industry with its February 2004 announcement of the PictureMate and its coveted $0.29 prints. Once details of HP's new DeskJet and PhotoSmart series printers began to leak in June and July, it seemed as though the company was focusing on faster print speeds, optional Bluetooth functionality with select models, and an expanded eight-color photo printer line as the upgrades to its crown jewels. Before Friday's launch, Vivera wasn't a household name like Epson's DURABrite or Canon's Think Tank, and it certainly wasn't something that could be found on a European Web site or in a Google search. As though to ensure HP would be the first to premiere its newest sensation, only cartridge numbers were available prior to Carly and VJ's unveiling.

Vivera inks allow consumers to print photos up to 40% faster than before, translating to speeds as fast as 60 seconds per print for the new dedicated 4"x6" inkjet photo PhotoSmart 325/375 models and 27 seconds for the eight-color PhotoSmart 8450. The ink system also touts up to 82 years of longevity with its three-color system, and upwards of 115 years when printing in eight-color. But most impressive to the targeted consumer demographic, beyond speed and lasting photos, is the convenience of printing on-the-spot photos anytime, anywhere, for just $0.29.

HP now forces its competitors, including Dell, to address a new breed of consumers demanding immediate gratification for retail quality prints whether on the go or at a housewarming party. However, even though Vivera answers consumer requirements for at-home printing, the question remains if consumers will trust the ease of use of at-home printing, or continue to push into retail and online photo sharing sites.

The Photo Marketing Association recently announced that home photo printing today comprises a healthy 67% of all digital photos printed, but this marks a 13% decrease from one year ago. Furthermore, there is a staggering 82 billion images expected to be printed and shared by 2008. Such consumer acceptance has created a boom in retail digital photo printing locations and constant price cutting of retail CPP. Wal-Mart was recently spotted offering $0.17 prints, and Retailers everywhere have launched online photo processing with in-store pick up. HP and its competitors must focus marketing efforts on those consumers controlling the digital revolution: the under-30 crowd.

In order for HP to tackle its evolving customer base and the exploding retail photo printing market, the company has refocused its marketing efforts from simply addressing ease of connectivity between HP products to the entertainment value provided by digital imaging. HP's target demographic cares about ease of use, cost, portability, and longevity, and HP has addressed these issues through its Vivera inks. While positive that the new PhotoSmart 300 series will enjoy shelf presence at all major consumer electronics Retailers, it is also imperative for the company to shelf its new models at discount Retailers such as Wal-Mart and Target, where younger and more frugal shoppers can be introduced to the printers in a mainstream retail environment.

But what can competing manufacturers such as Canon and Epson do to offset the publicity HP will enjoy with its new branded ink? Epson, recently extending its PictureMate offering beyond Best Buy, must help to mainstream scrap booking by sponsoring more end-caps dedicated to this and other memory-saving hobbies. Canon, with more inkjet photo printers expected to launch in early September, must deliver $0.29 prints and continue to offer printer/camera bundles. And finally, Canon, Epson, and even Dell and Lexmark must each focus on competitive feature sets including speed, CPP, and longevity to appeal to those consumers revolutionizing the imaging space.

With retail digital photo pricing at an all-time low, digital camera sales at a high, and Epson's PictureMate being the lone inkjet printer daring to breach the price barrier, Friday's announcement came at just the right time for the consumer photo printing industry. Through Vivera, life returns to at-home photo printing, and key partnerships with Apple and MTV will help fuel the target demographics acceptance by making digital imaging as cool and sophisticated as the photos they print.

For more information about Current Analysis, our services or our analysts, please contact our marketing department who will assist you in your request.

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COMMUNITY

SOFTWARE ... ALWAYS ALMOST READY FOR PRIME TIME
By G. A. "Andy" Marken, President, Marken Communications, Inc.

Apple took it on the chin when they had a "minor" heat problem with their Powerbook system. Compaq bit the bullet when they had an input device problem. After weeks of denial, Intel admitted to 486 problems and finally offered to replace millions of chips in the field. We won't compromise when it comes to hardware quality. However, install a new software program, from almost anyone, and you know you will be looking at weeks and months of work disruption.

Today's software firms are almost proud of the fact that their products never finished and are always new. Translation - you're running your business on partially complete products. That's akin to an auto manufacturer selling cars based on a rough design and customer complaints. Each one that is shipped is improved based on the input and experiences of people who purchased the car last week. As your new car proceeds down the assembly line, they make "minor" enhancements like brakes, engine, electrical, etc., based on customer beta testing and feedback.

While we won't tolerate problems with others products we buy for the home or office, we've come to expect problems with each new software release. We don't even call them problems anymore. They aren't bugs. They're "undocumented features." Many people relish the fact that they are the first in their group to purchase these untested, unproved and problem-riddled products.

For more than three years as Microsoft struggled to develop "Win '95, the next-generation operating system," people around the globe clamored to be the first to use the evolving beta software. Microsoft handed out millions of copies of the software. IS and network managers as well as technically sophisticated individuals provided Microsoft testing and trouble-shooting services at no cost. They used the software, documented the problems and forwarded them to Seattle. As soon as Win 95 was "relatively stable" Microsoft released it to the world.

When Win '95 was released, people stood in lines in front of stores so they could rush in and be one of the first to purchase the new operating system - despite the fact that the press had been documenting the problems for more than six months. Rather than find and fix all of the problems themselves, Microsoft sold millions of copies of the software.

They were so successful that the software industry followed. They realized they were wasting time, money and effort trying to deliver a finished package. They saw that people were actually willing to purchase something that wasn't quite ready to use. In fact, people actually relished the idea of getting software that was buggy, flaky and constantly hanging up or crashing. Rather than pay for expensive test programmers and engineers, they realized it would be much more cost-effective to let users determine what needs to be fixed.

Few of us would actually put down hard cash for a car for business that is "pretty close to right." However, for applications that we use to run our companies on a daily basis ... it's a great decision.

At shows like NetWorld+Interop, people stand in line and vie for the honor to take home beta software so they can become no-cost guinea pigs for software companies. While the volunteer test engineers usually get the products for nothing, it is becoming so "acceptable" that developers have even begun charging for the partially complete product.

Putting a new spin on the problem software publishers now proclaim that their products are never finished and always new. Users are expected to have problems with each new product release. Publishers send out products knowing that over the next weeks and months, they will have to send out patches and "fixes."

The exception has become the rule. If the trend is going to continue, it is a strong case for returning to the mainframe era or, as we now call it, thin clients or NC systems. Then, users won't have to purchase and install new software. Instead, it can reside on centralized corporate computer systems. Then, firms will be able to do a better job of coordinating their "upgrades and enhancements" and simply pay per usage.

It's a unique, revolutionary concept that we haven't seen for nearly 25 years. A problem may arise. IS and network management may be slightly less willing to license the beta software. They may insist that software publishers actually finish a product before they begin working on the next version.

If people stop buying work-in-progress software packages, perhaps we'll be able to produce the workflow improvements we were promised with computers. We'll have the time needed to master the software packages we have before the next rev is released. And when we receive the software, we won't have to be test engineers for software publishers and can focus on getting work completed.

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Top-Selling Software Week of August 2004
All Categories
Rank This Month	Rank Last Month	Title	Publisher	ASP
1	2442	Doom 3	Activision	$53
2	1	Norton Antivirus 2004	Symantec	$42
3	2	Norton Internet Security 2004	Symantec	$67
4	3	MS Office 2003 Student/Teacher Ed	Microsoft	$135
5	4	Norton Internet Security 2004 Upgr	Symantec	$67
6	5	MS Windows XP Home Ed Upgr	Microsoft	$98
7	6	Spy Sweeper	Webroot	$29
8	7	Norton System Works 2004	Symantec	$67
9	9	Norton Antivirus 2004 Upgr	Symantec	$30
10	8	VirusScan 8.0	McAfee Inc.	$48
11		Spy Sweeper JC	Webroot	$11
12	1614	Quicken 2005 Deluxe	Intuit	$58
13	12	Norton Antivirus 2004 Pro	Symantec	$69
14	15	MS Windows XP Pro Upgr	Microsoft	$188
15	16	The Sims Deluxe	Electronic Arts	$20
16	35	Mcafee Anti-Spyware 1.0	McAfee Inc.	$28
17	37	Norton Internet Security 2004 Pro	Symantec	$95
18	18	McAfee Internet Security 6.0	McAfee Inc.	$66
19	21	MS Age Of Mythology	Microsoft	$29
20	28	Norton System Works 2004/Personal Firewall 2004 Bundle	Symantec	$86
Games
Rank This Month	Rank Last Month	Title	Publisher	ASP
1	806	Doom 3	Activision	$53
2	3	The Sims Deluxe	Electronic Arts	$20
3	7	MS Age Of Mythology	Microsoft	$29
4	2	Rise Of Nations	Microsoft	$35
5	6	The Sims Mega Deluxe	Electronic Arts	$
6	12	MS Zoo Tycoon: Complete Collection	Microsoft	$30
7	18	The Sims: Makin' Magic Expansion Pack	Electronic Arts	$27
8	10	Halo: Combat Evolved	Microsoft	$32
9	5	The Sims: Superstar Expansion Pack	Electronic Arts	$21
10	22	Star Wars: Knights Of The Old Republic	LucasArts	$26
11	1	City Of Heroes	NCsoft	$47
12	8	Battlefield Vietnam	Electronic Arts	$38
13	15	Warcraft III Battle Chest	Vivendi Universal	$40
14	17	Counter Strike: Condition Zero	Vivendi Universal	$37
15	11	Call Of Duty	Activision	$39
16	24	The Sims: Unleashed Expansion Pack	Electronic Arts	$25
17	9	MS Flight Simulator 2004: Century Of Flight	Microsoft	$34
18	4	Far Cry	Ubisoft	$38
19	16	Unreal Tournament 2004	Atari	$38
20	21	The Sims: Vacation Expansion Pack	Electronic Arts	$20
Business
Rank This Month	Rank Last Month	Title	Publisher	ASP
1	1	MS Office 2003 Student/Teacher Ed	Microsoft	$135
2	2	QuickBooks 2004 Pro	Intuit	$271
3	3	QuickBooks 2004	Intuit	$199
4		AD Guard	Valusoft (THQ)	$18
5	5	MS Office 2003 Pro Upgr	Microsoft	$305
6	4	Norton AntiSpam 2004	Symantec	$39
7	6	MS Office 2003	Microsoft	$386
8	10	MS Office 2004 Student/Teacher Ed	Microsoft	$143
9	9	MS Office 2003 Pro	Microsoft	$467
10		1000 Best Fonts JC	Cosmi	$8
11	7	Defender Pro 5 in 1	Global Star Software (Take 2)	$20
12	11	Act! 6.0	Interact Commerce	$199
13	17	MS Office 2003 Upgr	Microsoft	$231
14	12	pcAnywhere 11.0 Host & Remote	Symantec	$199
15	13		McAfee Inc.	$30
16	8	Pop-up Stopper Companion 3.0	Panicware	$30
17	15	Logo Creator	Summitsoft	$24
18	20	Pop-up Stopper Pro	Panicware	$30
19	16	Pop Up Washer & Spam Shredder 1.0	Webroot	$30
20	19	MS Office 2003 SBE Upgr	Microsoft	$269
Home Education
Rank This Month	Rank Last Month	Title	Publisher	ASP
1		Instant Immersion Spanish JC	Topics Entertainment	$11
2	1	Instant Immersion Spanish	Topics Entertainment	$18
3	18	MS Encarta Reference Library Premium 2005	Microsoft	$65
4	2	Dora The Explorer Animal Adventures	Atari	$20
5	8	Mavis Beacon Teaches Typing 16.0	Riverdeep Interactive	$20
6	3	Finding Nemo: Nemo's Underwater World Of Fun	THQ	$17
7	6	Math Advantage 2005	Encore	$32
8		Jumpstart Toddlers JC	Vivendi Universal	$10
9		Jumpstart Preschool Classic JC	Vivendi Universal	$10
10	42	Playzone 2004 1st-3rd Grade	Vivendi Universal	$15
* Title not on last month's top-selling list. List is based on units sold by more than 70 channel partners, representing 90% of the U.S. retail consumer market. For more information, please contact NPDTechworld at (703) 376-6200.

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