Philips Predicts Industry-Wide Growth For Digital Video Products

Philips Consumer Electronics predicted that the industry-wide net value of digital video products will nearly double to
$22 billion by the year 2000.

The prediction was made at a briefing for
reporters in New York as Philips executives demonstrated several new
digital products.

“Digital television will drive the growth of the digital category,” said Cees Jan Koomen, president, Philips Digital Video. “Already we see (in the USA) a strong demand for HDTV among home theatre enthusiasts.
In general, the digital evolution will bring us closer to consumers than
ever before by allowing us to target specific needs and interests.”

“The mass market of yesterday, the one-size-fits-all approach, will give way
to a more customised approach. For consumers, the entertainment
experience in the home will be far more personal than it is today.”

Philips estimated that digital products currently account for 10 per cent
of the total net value of the consumer electronics industry. By the turn of
the century the company expects the figure to grow to 20 per cent,
rising to 30 per cent by 2002.

The sharp rise will not necessarily be at the expense of analog products–demand for which is expected to remain strong, with analog still accounting for half the total in 2002.

Digital broadcasts will shortly start in the United States, and this week
the BBC in the UK already began broadcasting test programmes,
with the full service starting next week. Philips said it is committed to a
full family of DTV products, including Digital TV-ready receivers and
rear projection television.

With the launch of digital TV on both sides of the Atlantic, the
convergence of television and the Internet can begin in earnest.

According to a newly published report from INTECO Corp., of Norwalk, Connecticut, at least eight million adults in the United States use the Internet and watch TV simultaneously at least once a week. Describing them as “tele-webbers,” INTECO mentioned that 40 per cent of them also click on a Web banner at least once a week–which is
four times the normal level.

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