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November 28, 1988

US “WILL LOSE PERSONAL COMPUTER MARKET IF IT LAGS IN HIGH-DEFINITION TV”

By CBR Staff Writer

The US share of the personal computer market will drop to 35% from 70% by the year 2010 if US firms obtain less than 10% of the high definition television market. This warning was issued in a report from the American Electronics Association, released last week, which also claims that a lackadaisical approach to developing high definition television could have a ripple effect that would doom several other key US high technology industries. The study predicts that the high definition TV market will total $40,000m within 20 years, and that failure earnestly to pursue this market could devastate the US share of the personal computer, semiconductor, and automated manufacturing equipment markets, as well as endangering US development of future technologies. The Japanese have spent $700m on high definition television technology in the last 20 years compared to the very little spent by US companies, according to the report. The result of the research is a television picture with the quality of a 35mm photographic slide which will be marketed for between $3,000 and $5,000 by 1991 at the latest. Consequently, the AEA Advanced TV Task Force, which was set up last June to address US deficiencies in this technology race (CI No 946), has only five to 10 years to catch up with the Japanese market penetration, both because of the high cost of the technology involved, and the fact that it cannot be used on regular TVs. Because the Japanese high definition television uses a different broadcasting standard to the US standard, it is likely to be available initially only on cable, videotape recorders and satellite. The companies represented within the AEA Task Force are IBM, AT&T, Hewlett Packard Co, Apple Computers, Prometrix Corp, Cohu Electronics, VPL Research, Anadigics and BIS MacIntosh, and US Electronics lobby is asking them to put up hefty investment in high definition TV without expecting a return for five to 10 years. Although the start-up costs are high and profits will be low or non-existent for up to 10 years, the US must claim 50% of the new television market in order to maintain its 70% share in the personal computer market. Similarly, the US share of the world’s automated manufacturing equipment market could drop from the current 35% to 28% unless the US holds 30% of the new television market. Consequently, the report, which the Electronics Association has labelled a working document, is urgently demanding co-operation of industry, government and academia in high definition TV.

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