CES 2008

LAS VEGAS--The winner in the Blu-ray and HD DVD war is the hard drive, according to Bill Watkins, CEO of Seagate Technology.

"People are saying Blu-ray won the war but who cares? The war is over physical distribution versus electrical distribution, and Blu-ray and HD lost that," he said during a breakfast meeting at the Consumer Electronics Show here this week. "In this, flash memory and hard drives are on the same side. The war is over and the physical guys lost."

Bill Watkins

(Credit: Seagate)

Watkins, naturally, speaks from personal interest, but he's got a point. (A former Army grunt and a decades-long Deadhead, Watkins is also one of the more entertaining CEOs in the technology industry to interview.) Consumers haven't been buying Blu-ray or HD DVD players and by the time they do, technology companies will likely be hawking sophisticated on-demand services and Internet Protocol TV. IPTV, in fact, is the dominant theme of the show. Sharp, Samsung, and Panasonic all unfurled content alliances that will let consumers look at headlines or videos from the Net on their TVs.

That's good news for Seagate, because electronic distribution means more hard drive sales. "If (data) is in the cloud I get more storage sales because you have to back up everything," he said.

"Surveillance is a big deal," he added. "You're being filmed right now (we were in a casino) and they've got to store it somewhere."

Hard drive makers are right now living through good times. In the 1990s, excess manufacturing capacity and price cuts led to stagnant revenues and losses for many companies. Since then, many players have dropped out. New markets such as digital video recorders opened up for drive makers. As a result, both Seagate and rival Western Digital are seeing double-digit growth. Seagate has already upped its revenue guidance twice for the quarter that just ended.

And the future continues to look good. Hollywood, Watkins said, will have no choice but to get into home delivery of content in a big way. People are leaving home less and less. And if the movie studios don't deliver their content to their home, people will watch whatever they can find on the Internet. At CES, XStreamHD is showing off a box that gets on-demand movies from a satellite. Actor Michael Douglas is an investor.

"They will watch lousy content if it is easy to do," he said.

Other notes from Watkins:

•  Seagate doesn't have its solid state drive out yet, but it's coming.

•  Flash memory, he added, will never completely take over the hard drive market. The demand for storage is too big. If a flash maker wanted to provide just 15 percent of the world's market for storage in 2012, it would have to invest $50 billion this year alone.

"And right now, no one has made that investment," he said.

He further argued that flash memory gets too much attention from Wall Street. "I'm making 75 cents a quarter, and I get half the valuation of SanDisk or Micron," he added.

•  Consumers still seem buoyant in Europe and Asia, so a lengthy, full-blown global recession may not occur. Admittedly, he adds, that's his own spin.

•  America has got to reform its immigration laws by letting in more immigrants. Nearly 60 percent of the companies in Silicon Valley were founded by people born outside the U.S. Last year, close to 70 percent of the students getting Ph.D.s in engineering were from other countries.

"And none of them got a green card," he said. "Because of this, U.S. companies will have to put R&D overseas."

•  Speaking of foreign lands, the government-to-university-to-private sector triumvirate (the government provides grants, universities invent stuff, and the private sector sells it) that helped build the tech industry in the U.S. no longer works as well as it once did. However, they have copied it pretty well overseas.

"They are following the made us successful and here it's broken," he said. "We used to say that what is good for GM is good for America. Now, what is good for the stockholders is not necessarily good for America. That drives me crazy."

Netgear's ReadyNAS Duo systems are a new but still expensive attempt to bring networked storage to the home.

(Credit: Netgear)

Innumerable technology companies are trying to grab their share of consumer gadget spending, and storage makers are no exception. On Monday, Seagate, Toshiba, and Netgear all unveiled new products for the market at the Consumer Electronics Show in Las Vegas.

One of the bolder products, in my opinion, is from Netgear, which moved its ReadyNAS line, acquired from start-up InFrant, more in the consumer direction with the introduction of the ReadyNAS Duo 500GB, 750GB, and 1TB network-attached storage (NAS) devices.

These systems attach to computers over a local network rather than a USB, Firewire, or eSATA port, meaning that multiple computers can share access. But connecting over Ethernet is a new challenge for home computer users who already have enough trouble being sysadmins and might not want to advance their network admin skills, too.

The systems support two hard drives, the optional second one mirroring data for greater protection. Like most NAS devices, though, they aren't cheap, though: a model with a single 500GB drive costs $500.

Toshiba has given a new look to its external drives.

(Credit: Toshiba)

The ReadyNAS Duo products will ship late in the first quarter, Netgear said. The products include the NTI Shadow backup software tool.

These aren't just low-end business-oriented devices in a shiny enclosure. For one thing, customers can plug cameras into the included USB port, and the devices will automatically copy photos. For another, they support a number of streaming media protocols, including UPnP AV, iTunes, and Logitech Squeezecenter, for sending video and audio over the network.

Seagate aims for the security-conscious
Seagate had a plethora of announcements. First is the Maxtor BlackArmor external USB drive, which has built-in encryption and will cost $150 for a 160GB drive when it ships in the second quarter.

Seagate's DAVE storage device can connect wirelessly to share data.

(Credit: Seagate)

Next from Seagate is its PipelineHD series of hard drives, which have features such as low noise, low power consumption, and high capacity and are specifically geared for digital video recorders. Initial capacity will be 320GB when the products start shipping in the first half of the year, with later capacities planned to reach 1 terabyte.

Most unconventional is the Digital Audio Video Experience (DAVE) products, a 60GB storage system that connects wirelessly through Bluetooth and 80211.b/g, as well as with a USB connection. The systems can be customized and extended, and partners that will offer DAVE-based devices include Sanyo, PortoMedia, and HarmanBecker, Seagate said.

Seagate's Maxtor BlackArmor drive has built-in encryption.

(Credit: Seagate)

Toshiba's tiny external drive
Toshiba announced that it's built its 1.8-inch hard drives into an external USB-connected storage system with 60GB, 80GB, and 120GB capacities. The company plans to include encryption and backup software with the devices, which will go on sale this spring. Toshiba didn't announce a price.

A larger 2.5-inch drive will be available sooner: Toshiba announced a 320GB, $200 model that will ship in January. It includes NTI Shadow backup software. Toshiba's personal storage products (the 2.5-inch drive line also includes 250GB and 160GB models) also sport a new glossy finish and colors including gray, red, and green.

Sony's new DCR-SR220 standard-definition hard-drive camcorder

(Credit: Sony)

While high-definition camcorders continue to be the most exciting for camcorder enthusiasts, Sony continues to develop its standard-definition hard-drive camcorders. The company's four new models for 2008 include changes to core features, such as sensors and lenses, smaller overall size compared to last year's models, and some technologies from Sony's digital cameras in the top SD HDD model. All of the models also include built-in zoom microphones and a Quick On feature, which basically puts the camcorder in standby mode, so it consumes significantly less power than in regular mode and lets you start recording faster than if you had to power up from scratch.

The most interesting of the bunch is the $850 60GB DCR-SR220, which includes a 2.3MP, 1/5-inch ClearVid CMOS sensor with Sony's new Exmor on-chip noise reduction. That's just a slight bump up in pixels from last year's 2.1MP DCR-SR200, though that sensor was a larger 1.3-inch chip. It'll be fun to see if the new Exmor noise reduction, which works in conjunction with a Bionz processor (another tech borrowed from Sony's still cameras) can yield a better image than last year's model. Face detection finds its way into this line in the SR220, which can find up to eight faces and use them to set color balance, exposure, and focus. In photo mode, face detection also sets the flash output. Speaking of photos, as usual, Sony interpolates the still images captured, so the SR220 outputs 4MP stills from its 2.3MP sensor. The SR220 also sports a 15X (up from 10X) T* optical zoom lens with Sony's Super Steady Shot optical image stabilization, a 2.7-inch widescreen LCD, 5.1 channel surround sound recording, and a dual record mode that lets you capture 3MP stills while recording video. One more note on face detection-- Sony says that it will allocate more bits for the face when capturing footage. This initially gave me visions of sharp faces on top of slightly blurry bodies, but if done subtly, it might add an almost subconsciously pleasing effect. We'll have to wait for the review to see.

Just below the SR220 is the $700 60GB DCR-SR85, which replaces last year's SR82. Other than the smaller body design, the camcorders are essentially the same. Te SR85 has a 1/6-inch 1MP CCD sensor, 25X optical zoom lens with Super SteadyShot optical image stabilization, 2.7-inch widescreen LCD, and like the SR220 can record video or still images to a MemoryStick Duo card as well as the hard drive. Sony says that almost 11 hours of video can be recorded onto a 16GB MemoryStick Duo card, while the 60GB hard drive can store up to 41 hours of footage.

Sony has added a new tier to its HDD line with the $600 40GB DCR-SR65. It also has a 1MP 1/6-inch CCD sensor and 25X optical zoom with Super SteadyShot optical image stabilization, and a 2.7-inch widescreen LCD. Like its more expensive brethren, it includes Sony's Active Interface Shoe, so you can add accessories, such as video lights and long zoom mics. According to Sony, the SR65 can store up to 27 ours of LP-mode footage on its 40GB hard drive.

At the bottom of the HDD line we find the $500 30GB DCR-SR45, which replaces last year's SR42. It can store up to 20 hours of LP-mode footage o its hard drive and sports a newly designed 1/8-inch 680,000-pixel CCD, a 40X optical zoom lens, and 2.7-inc widescreen LCD.

Sony expects the DCR-SR45, DCR-SR65, and DCR-SR85 to be in stores at the end of January (this month), while the DCR-SR220 is expected to start shipping in February.