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CES Madness – Now Get Ready for the Consumer Bandwidth Tsunami

The Consumer Electronics Show was held in Las Vegas, January 10–13, 2012. This show clearly marks the transition point of the decline of the PC era and the ushering in of the tablet and Smartphone era. We are now entering the age of Ultrabooks, Super Phones, and Hyperphones—and mega-hype! Just as stars in the universe reach a certain size and then explode, LightCounting analysts have also seen may large trade shows become so large that they merge, split up, or die altogether: NFOEC and OFC became OFC/NFOEC; Supercom died; Comdex died, and others litter the debris trail. At this year’s Consumer Electronics Show, Apple’s products and third-party accessories products composed 35–40% of the show’s products, yet the company did not attend. Although much was made of Microsoft not attending next year, the entire personal computer area consisting of Intel, Microsoft, and various PC booths would have fit into just the area occupied by Samsung’s HDTV line—not counting the rest of their booth. The show has turned into a cellphone and HDTV show.  What happens next is anyone’s guess.

The event had 153,000 attendees and 3,100 vendor booths in 1.9 million square feet with over 20,000 new products and probably 8.3 million iPhone cases on display! Waiting in the airport taxi line at 1:30 a.m., along with 600 of my closest friends, I realized the magnitude of the tsunami coming from the transition of the wired PC era to the mobile wireless smartphone/tablet era. These devices all use both Wi-Fi and cellular wireless interconnects that ultimately feed via optical transceivers and other equipment into the optical telecom network and eventually to datacenter servers, switches, and routers.

The magnitude of the bandwidth tsunami building on the telecom, datacom, transceiver, server, and switch/router infrastructure is staggering, to say the least, and has the potential to dwarf the 2000-era telecom/dot com boom. Only as I attend a single trade show that is 18 times bigger than the town I grew up in did the true scope really hit me. Reading the news on the web just doesn’t have the same impact. Even walking the halls proved hazardous, because half the people walking were looking at their phones instead of walking! This time, real devices are connecting with data, photos, and video content.  The smartphones produce 20 times the traffic as a voice only phone and they are being sold in the tens of millions of units and growing at a staggering rate. According to a report from the China Internet Network Information Center (CNNIC), during 2011, the number of Internet users in China soared to 513 million, up from 298 million in 2008—with 60 percent of China's population still offline. India and Brazil are next!

The key question is how the surge in popularity of mobile broadband devices will impact the network. Either way, it is definitely going to happen. There are at least two scenarios:

Our market forecast published in December 2011 is based on the slower storm surge scenario, but the reality may be more volatile as mobile device unit volumes can suddenly spike with the introduction of a popular product in only a few month. Sharp upturns in the networking industry are likely to coincide with pickups in general economic activity, just like economic downturns are cooling every few years. Many indications suggest that service providers worldwide are getting ready for the surge in mobile data traffic, particularly by increasing investments into the networking infrastructure, funded in part by growing profits from mobile broadband services.

Key Products and Trends Impacting Bandwidth

UltraBooks replace netbooks. Desktops are fading fast. Even Apple is getting out of the desktop PC business, and it started it all! New notebooks and ultrabooks are all supporting 10Gbps HDMI, including some with Thunderbolt for video and data. These links will largely be used in the digital living room as the typical cable Internet service is lucky to reach 10 Mbps in the United States, lagging well behind many other countries, such as Korea at 50 Mbps. UltraBooks are essentially solid state drive (SSD) notebooks with a very thin form factor, which means gone are the arrays of ports for USB, DVI, and VGA on the back of a PC. Now, it’s essentially just one or two USB 3.0 (5 Gbps) ports and either an HDMI or Thunderbolt port (10Gbps). Some newer machines do not even have an Ethernet RJ-45 jack! Although, several new ultrabooks showed Thunderbolt, Thunderbolt is a copper interconnect with a 3-meter reach.  LightCounting found very little mention of optical Thunderbolt (formerly LightPeak) at the entire show and much more mention of optical HDMI and USB.

1.5G WiGig Wi-Fi wave starts. CES had the first showing of the new WiGig chips; these are starting out at about 1.5 Gbps but promising 7 Gbps in the future. WiGig at 60 GHz is ten times faster than 5GHz, 802.11n speeds and can download a full-length HD movie in 45 seconds compared to 45 minutes over Wi-Fi.   Again, these are largely a 20 foot digital living room link to connect PCs and tablets wirelessly to HDTVs. Broadcom announced its family of 802.11ac chips, which allows for less video compression, resulting in significantly lower latency (<50 msec) and higher resolution to be broadcast and finally cutting the wires to the HDTV and sound system. This is likely to be the “wire killer” in the digital living room when the prices come down and curtail sales of copper links but optical links will still have a market due to the very short reach of WiGig.  

Google TV makes an appearance. This year, Google TV made a small showing, but everyone is waiting for Apple TV’s next shoe to drop and start the war sometime later this year. CES 2013 is likely to be an Apple TV vs. Google TV event. This will combine with WiGig-enabled PCs, tablets, and smartphones to connect to HDTVs, along with Google’s YouTube’s new efforts to make a zillion channels for every topic, and emerge into a sudden enormous increase in video downloads and resulting cable bandwidth issues—perhaps triggering the Internet service providers and cable optical networks companies to begin a buying resurgence in order to support the surge in bandwidth required to deliver these services?

Are we seeing the end of school textbooks? The MIPS Inc. and Ingenic Inc. Android tablet announced costs less than $100 and is the tablet version of one-laptop-per-child initiative. It’s an effort to make obsolete the school textbooks and replace them with interactive, Wi-Fi–based tablets and digital textbooks. Apple announced it is  digital text book efforts in New York enabling eBook development tools for the iPad targeting interactive digital textbooks for schools. Expect Google and others to also make announcements. Soon, instead of being told to get off the Internet and do their homework, school kids will be doing all theirhomework online with a resulting impact on the networks.

Internet-enabled HDTVs make a strong showing- Will anyone care?  CES 2011 was all about 3-D TV, which is a give-away today because it essentially flopped.  CES 2012 was about Internet-enabled TVs: Smart TV, Connected TV, and Google TV. How about Stupid TV? LightCounting believes this concept, too, will flop. Consumers are still trying to connect the wires on the back of the TV! TVs are for watching, and tablets are for surfing. And using a tablet is far easier than typing on a TV with a remote control keyboard requires takes two minutes to type a single word, often in the dark. Even the latest 60-inch Samsung HDTVs do not support a simple Bluetooth keyboard. Without a keyboard, how does one surf efficiently? On a tablet, such as  an iPad or Android tablet, or a notebook while on the couch watching TV—that’s how. Second, consumers know they don’t have to watch TV on the couch and can stream video on a smartphone, tablet, or notebook and watch it in bed or on the commuting train or driving while they text! TVs and PCs are fundamentally different, and LightCounting believes that Internet TV is not going to strain the network bandwidth anytime soon. Other than Intel, almost no one sees the PC as the heart of home entertainment. Maybe Apple TV will change things. A definite bandwidth impacting new trend is multi-tasking by watching TV and Internet surfing.

Half-smartphone/half-tablet devices emerge: Competing against the Apple iPad, the Amazon Kindle, and other smartphones, Samsung introduced the Galaxy Note smartphone sporting a 5.3-inch screen. The 5-inch display space once thought to be a dead-zone between phones and tablets now looks interesting. Now, one can look completely ridiculous holding a larger device up to your ear to talk into! But everyone is waiting for the Apple iPad 3, and Google is expected to announce its “iPad killer” shortly thereafter.

Active copper and Active optical consumer cable update. LightCounting found a number of cable suppliers offering active copper and active optical cables for HDMI, USB 3.0, DisplayPort, and Thunderbolt. Intel had a very low-key booth demonstration of a Thunderbolt active optical cablein its booth, and rumors circulated about a broad-scale announcement in mid-summer targeting applications needing more than 3 meters and utilizing the same mini-display port as copper cables. AMD demonstrated its copper version of LightPeak/Thunderbolt called Lightning Bolt, which offers support for USB 3.0, DisplayPort video/audio, and power over a single cable with mini- display port connectors.  By the time all of these cables become established in the marketplace, WiGig is likely to own everything within 7 meters and optical and active copper beyond that. 2012 will be interesting for consumer optical cables.More will be discussed in our upcoming Focus Report titled, “Active Optical Cables: Smartphones to Supercomputers.”

 

By Brad Smith, Sr. Vice President, LightCounting.com, LLC.