Do It Yourself Predictions!

This is Hot Topic is like life; you get the test first and the lesson later! We have structured a couple questions to help our readers stumble thru the mire of the latest technology and newest products, with an attempt to guess where all this stuff might lead. At the end, we will give you our spin on where it’s all heading.

Question 1. Arrange the following terms in chronologically development/general application order: Desktop, Mainframe, Laptop, Smartphone, Netbook, and Minicomputer. C’mon, this is easy.

Good, now it gets harder. Throw in these terms to make it interesting, and make no mistake, they may also be show-stoppers and game changers: Cloud Computing, Convergence, Wi-Fi & Wi Max, Bluetooth, Pico Cells & Micro Cells & Nano Cells, Apps, and 30 nanometer technology.

Next, lets look at the old ICE concept: Entertainment, Information, and Communication. Here are only a few of the broader implications of the above technology advancements on ICE. You have probably heard all this or have gone thru this process before but hang on and note:

1. Entertainment has gotten more portable and wirelessly available by going from analog-to-digital…thank technology for cheap mass storage.
2. Information (data) has gone from analog-to-digital…thank Intel, IBM, Samsung and many others for greater computing-on-a-chip technology in the form of smaller micro-circuits and new software algorithms.
3. Communication has gone from analog-to-digital, both wired and wirelessly. Frequency, and consequently Bandwidth, is increasing to accommodate both 1 and 3 above.

Finally we have to factor in the following: A. The future of personal entertainment is getting smaller, more powerful, cheaper, and uses less power…but you already knew that too. B. Frequency bands are getting congested as more high bandwidth data is sent to portable devices; however, higher density, physically smaller, more powerful storage and software compression is aiding the portability of content. C. Data (Information) is (becoming) Entertainment…at least so far as our lives are concerned, i.e., the Internet. D. What “portable devices” are road warriors and power users carrying today? E. What paradigms are shifting on airplanes? Ancillary revenue, space, comfort, connectivity, entertainment/headsets, food, baggage, check-in, etc. Question 2. What are the implications for all the above for IFEC?

After we went thru this exercise, we came up with a number of summary observations – see what you think.

1. This past year and into 2010, we may see a downturn of IFE revenues, more related to aircraft orders and airline profits – on the flip side, things are looking up somewhat for the latter part of 2010 with companies like Boeing ramping up production rates.
2. Connectivity is on the uptick and at some levels, is basic on many aircraft in the US and worldwide. Be in this business or in some way connected to it.
3. Voice and data connectivity are battling it out on the aircraft but currently data is winning. However remember, in the digital world, voice is data! European, Asian and Middle Eastern carriers might actually see more digital voice at least for now.
4. If trends to portable data are to be believed, passengers will bring aboard more content-related stuff. Case in point, check out this new phone from T-Mobile with content onboard and a built-in Go-Go App. Interestingly, this trend may help the portable IFE folks! How, airlines may hold off IFE selection and cover their assets with portables, older aircraft can compete with SOTA new planes by adding portable IFE. Portable IFE seems to have broken the “free” IFE barrier – travelers seem to understand that new, small, cooler devices are perceived to be worth more than a fixture (see Editor’s Note below). And hey, don’t rule out airline or kiosk delivered portable content! Also, watch out for more flying functionality from iPhone type apps like check-in, flight location and arrival/departure info and the like.
5. If one can’t talk to the ground on a 3-hour flight or more, connectivity anxiety is becoming a common disorder for some. The remedy is data, and if space and carry-on limitations keep declining, pricing will increase for both. So watch out for an increasing amount of Smartphone usage.
6. As first-run movie “windows” shrink, the demand-pull of installed IFE or that type of content will lessen. And speaking of content, when is someone going to really push books on tape, inflight learning, pay-for-downloads, onboard movie rental/purchase on a card, humane pet transportation, food-to-go-outside-the-airport, instant booze (just add water), etc…there we vented that one.
7. Seats are getting thinner while some companies like Panasonic are designing thinner IFE for these applications. Perhaps a seat standard containing all the conceivable seat functions and human interfaces is in the future…all powered by some hybrid network.
8. Bandwidth increases will no doubt demand more fiber optics – wireless has limits…the question is where in the plane will it make the most sense? Without a doubt, in the future, the FAA and FCC are going to rethink the noise floors on plastic planes with all this wireless stuff radiating away. We know the issues because we have talked to the HIRF people. This will hit the wall sometime in the future. Further, connectivity is probably heading for Ku Band too to take advantage of that higher bandwidth. Ka interest is increasing too.
9. We continue to say that inseat power is becoming a “must add” amenity for passenger devices…and wouldn’t it be interesting if someone invented an integrated, in-seat credit card payment system that reduced crew workload and allowed an avenue for passengers to pay for all this stuff airlines used to give out free. In the future, airlines could be like printer companies – give away the seat at rock bottom prices and make it up on the ancillary revenue like printer companies do with printer cartridges!
10. While the inflight connectivity folks seem to always be pushing out the hardware and network break-even points, something has to happen to drive some of the network providers into profitability. Here are a couple of ways they might: Replace or replicate ACARS, security profits from onboard cameras, special purchased data offerings (Hey, our Internet provider charges more for more speed), airline data and onboard trend monitoring deals, and with the right payment system…pay for play might succeed. And finally, where is that gambling windfall?

We have not even mentioned handheld gaming, GPS, portable cameras (and cameras features of phones), noise canceling earphones, PMP devices, social networks, apps for everything, iPads, YouTube, 3D, solar power, wireless power, etc. We will let you work those out for yourselves.

Have a nice day!

(Editor’s Note: We ran our thoughts by other sources of IFE knowledge and one response, in particular, is worth a review by our readers: “During 2009, all of the distributors of portable media players in IFE hit a wall, built partially by a down economy, and partially by a focus on connectivity and how it might impact the demand for entertainment apart from communications. Coming out of 2009, we see a strong impetus toward investment in Premium Economy to capture lost revenues attributable to the fact that premium cabin ticket sales are not rebounding in the same way as economy cabin ticket sales. The impact of this on portables, I believe, is the bifurcation of the portables market into a highly commoditized lower end, and a more innovative higher end where the product is more than simply an add-on but is an integrated product. This might be semi-embedded, or it could cross the DO-160 line and into embedded territory. I believe this favors suppliers with a more holistic view. – LightStream Communications, IFEC Consultancy”)