HDMI Technology: The HDMI opportunity

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The Scart lead is dead, long live HDMI! Or is it that simple? HDMI is not just a higher-quality digital version of the Scart lead, it is a multimedia interface format devised to support some of the most robust data-protection technology outside of military applications. The fact that it actually produces a reasonable picture and supports multi-channel audio is almost a side-line.

As Chris Moseley, AV product manager at Yamaha UK, says: “HDMI is far more complex than Scart and the USP of a higher quality AV transfer system is a bit of a smoke screen to hide the real benefits of HDMI from everyday users – which is to assist the movie studios in their on-going battle against unauthorised copying.”

EDID (Extended Display Identification Data) handshaking between ‘authorised’ HDMI hardware and HDCP (High-Bandwidth Digital Content Protection) are cutting edge protection against copying content sent over HDMI. Compare that with HDMI’s ‘flagship’ offering of 1080p video, which was available over component connection five years ago, or bitstream digital audio which has been around since the advent of DVD. Of course, for the average user the single cable connection is convenient and HD quality video with surround sound is big news – but few realise they didn’t actually need HDMI to achieve it.

“The fact remains that HDMI cables are a big opportunity for added value sales on the back of the HD revolution,” says Ralph Allen, MD of Techlink International. “The price points of good quality cables have remained high, largely due to costs incurred in testing and certification, and HDMI business is booming for retailers willing to stock a comprehensive range of cables and accessories.”

The sentiment is echoed, perhaps not surprisingly, throughout the cable manufacturing industry. QED’s category manager Philip Davies comments: “HDMI cables and related products are currently the most rapidly growing area within the home electronics industry. Despite confusion due to the constant updates in the specification, HDMI as a technology simplifies connectivity rather than complicates it. As a solution it is the only way to deliver full 1080p resolution pictures and HD sound together from a source to display in one cable.”

Confusion

Perhaps the biggest problem HDMI has faced so far is its own on-going evolution. Inception to fourth generation (V1.3) all happened in less than three years and the specification is set to change again and again into the future. On one hand this can be seen as indicative of today’s high-tech CE market and this on-going evolution keeps the consumer at the cutting edge of multimedia interface technology. And true enough, today’s V1.3 specification HDMI interface offers enough bandwidth for Full-HD (1080p) video, multichannel LPCM and uncompressed bitstream audio, and advanced two-way control functions. The latest specification also supports deep color for displays capable of showing 30-bit, 36-bit and 48-bit colour, and includes automatic lip-sync adjustment.

Thankfully the average consumer is blissfully unaware that HDMI has changed at all since its inception. If they were, buyers of the first two-million HD-ready TVs in the UK would probably run screaming back to their retailer claiming to have been sold a dud. Those enthusiast consumers that are aware of the changes are faced with a dilemma that has plagued the PC industry for 20-years – do I buy now or wait a little while for the next generation, or perhaps the generation after?

While changes to HDMI specification do bring technical benefits, the buck of this problem gets juggled by manufacturers and eventually stops on the shop floor. There is a clear need for retailers not only to understand the limits and features of each variation of HDMI standard but also be aware of which version the products they sell comes equipped with. And that is true of not just HDMI cables but HDTVs, BD and HD-DVD players, DVD players, DVRs and the growing numbers of games machines and even camcorders.

“The continuing evolution of HDMI standard is only a serious problem if dealers allow the name of the technology to become the selling point, rather than what it will do in a particular customer’s circumstances,” adds Yamaha’s Chris Moseley. “Some AV specialist dealers and mass merchants have become greedy and used HDMI to sell hardware product. But consumers will start to loose faith and feel ripped off when their shiny new AV amplifier with HDMI and all the logos cannot auto-lip sync or process Dolby True HD surround sound audio for example.”

Supra’s MD adds: “I can see HDMI becoming a problem for those who don’t sell specialist AV kit on a regular basis. However, for a properly trained, independent specialist AV dealer it should be ‘standard knowledge’ about the latest version of HDMI and its implications on the equipment the customer wants to purchase or has already.”

Cable-centric

Outside of the variable feast of HDMI specification, the HDMI cable market is a challenging arena in itself. Contrary to popular belief that ‘digital is digital’, the quality of HDMI cabling makes an enormous difference in picture quality and the effect is entirely proportional to both image resolution and length of cable. The higher the resolution of the HD picture and the longer the length of the HDMI cable, the better quality cable will be required to achieve perfect results – or indeed results at all.

Joe Carri, Group MD at Path Group PLC (Ixos brand HDMI cables) comments: “How many retailers are getting product back because the cable or switcher is not handshaking or cannot transmit 1080p over the length of cable? Unfortunately even some of the better HD players have issues transmitting 1080p over 4m so there is requirement for a clear step-up cable range to help consumers and retailers when choosing. With even higher bandwidth HDMI already being worked on, selling better cables now will give consumers peace of mind when products move to the next generation.”

The actual physical construction of HDMI cabling has not changed since inception but there is a greater demand on the construction quality for the latest specification. To realise the bandwidth now required for V1.3 HDMI cables need to have very low-resistance conductors, excellent twisted-pair geometry and robust shielding of both individual pairs and the cable as a whole. While many companies are capable of creating cables up to 10m with V1.3 bandwidths, Techlink offers HDMI cables to 30m at 1080p and 50m at 1080i resolution by using a combination of a very-high quality cable and a passive equaliser at the display end. While not an inexpensive solution, the concept is being widely adopted by the custom install industry and high-end consumers wanting long runs of cable.

Monster is currently heavily marketing the benefits of its cables with regard to the quality and length issue by announcing a range of speed-rated HDMI cables. It is backing the new ranges with an educational campaign attempting to clear up the consumer confusion about qualitative differences of cables over distances based on a cable’s bandwidth – AKA ‘speed’. According to Noel Lee, ‘Head Monster’, much of the consumer confusion about HDMI cables stems from the advent of HDMI 1.3 Category 2 standards with even higher speed capabilities than conventional HDMI. Lee notes that as HDTV displays get larger, people are positioning their flat-screens further and further away from source devices, and screen resolution and colour depth in particular can suffer when using low-quality HDMI cables.

Noel Lee is without doubt one of the best marketers in the CE industry and has endorsed Monster’s premium range of speed-rated HDMI cables with a ‘Cable-for-Life’ replacement offer. If any Monster 1000 series HDMI cable is ever outstrip
ped by the technologies of the displays or sources, Monster will replace the cable at no charge. In a market beset by changing technology a retailer could not wish for a better USP to close a premium cable sale.

Underbelly

While there is very good reason to be part of high-margin, high-value, brand-name HDMI cable sales on the high street, there is a dangerous underbelly to the market on the Internet and indeed with less scrupulous retailers. The material cost of very basic HDMI cables is not particularly high but cost-price is bumped-up significantly with membership of the HDMI Organisation ($15,000pa) and testing and licensing fees that amount to around $10,000 per SKU. All of the big name cable brands play the HDMI Org game, but a cursory search for ‘HDMI cable’ on Ebay reveals a booming market for brand-less cables at a fraction of the price of branded product.

Andrew Stacey, MD of True Colour Industries views the problem in a pragmatic light, feeling that the actual threat is no greater than that of cheap so-called hi-fi’s coming out of the Far East: “There will always be cheap imitations alongside good quality products in our industry and there will always be a need for market diversity. Those consumers who are aware of the benefits of better quality products will buy them, those who aren’t won’t and will ultimately be disappointed.  Once again it comes down to retailers educating their customers.”

This influx of cheaper no-brand HDMI cables is part due to the success of the format and part due to the reliance on Far East manufacturing. Most cables are still hand-made and the average wage for a skilled worker in such a factory is around $30 per month. The harsh reality of global economics means that the $10,000 it costs to test and certify every cable is equivalent to employing a skilled workforce of nearly 30 people for a year. Add to this the lack of any real power to police the market and is it any wonder some Chinese manufacturers do not subscribe to official HDMI Org channels?

Supra’s MD accepts the issue of imported unofficial cables but says that it is no different with any other industry and ‘counterfeit’ products seeping onto the market: “Fortunately, with HDMI cables the proof is in the viewing, especially if it doesn’t perform well. If a cable claims to be certified to V1.3 and 1080p and isn’t, people will soon find out about it. In the end it is down to the due diligence of the retailer to help avoid these problems.”

Perfect connection

No CE market or product category is ever perfect but, at retail at least, HDMI gets pretty close. For consumers it is convenience and HD quality wrapped up in a single cable and the format has eliminated the old confusion of Scart, RGB, S-video, composite and component video connections. For retailers the HDMI connection is at least a fixed standard across all products, there is clear trade-up route to better quality cables with easily demonstrable benefits and retail margins are still in the order of 40-points plus with branded product. With the film and content producers happy that HDMI’s copyright protection measures are cast iron, it is probably only hardware manufacturers that are struggling to implement the latest versions of the format on current products.

The majority of consumers are blissfully unaware of the moving technical specifications of HDMI, so hopefully this won’t put them off buying into HDMI equipped product. Better still, they are ripe to be educated on and sold the benefits of better quality products. As Philip Davis at QED says: “Educate customers about HD technology in order to dispel any confusion, create piece of mind and build confidence in the HDMI format. With this sound advice, consumers will be confident in making purchases with an understanding in the technology they are buying.”

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