Digital Cables Are Now The Profit Connection
By Jeff Malester -- TWICE, 8/9/2004

In this dawn of the age of consumer electronics convergence and home theater, the relatively low-profile cable is playing a major role, both in enhancing the quality level of television viewing and listening, and swelling the pocketbooks of retailers looking to increase slimming hardware margins.

No longer a connection designed just to carry a minimal-quality picture, cables have become a sophisticated part of the video team ?taking the newest in television hardware and video components to sensory levels not imagined by the general public some scant 10 years ago.

No home theater system is complete without the cabling that connects everything, and retailers can assume users will spend between 5 percent and 10 percent of the cost of a home system to purchase products that can make a critical difference in what they see and how they hear...........

For HDMI Cable, The Future Is Here
High definition multimedia interface, or HDMI - the latest, and potentially digital video's best-selling cable type down the road - is the connectivity standard making fast headway among digital TVs, set-top boxes, DVD players and A/V receivers.

This specification - called the cable that ultimately will be the most critical to DTV and home theater by a number of industry experts - was developed by a group of CE manufacturers, who combined audio and video into a single, compact user-friendly interface. This supports standard, enhanced or HD video, including 720p and 1080i, and also standard to multichannel surround sound audio with an overall bandwidth of up to 4.95 gigabits per second.

"We believe the next wave of growth in our industry will be with HDMI cables and associated products," said Henry Milan, president of Auburn Hills, Mich.-base JDI Technologies.  "These devices are now just showing up in mass retail - Best Buy and similar [chains] -which is where purchasers will drive volume in this segment. The enhanced entertainment experience should be so superior that we expect to ramp up production to meet demand later this year."

In supplying the needs of digital TV to consumers, JDI, maker of the GoldX line of cables, foresees three avenues for increased retail revenues. These include supplying cables to meet the demand of new video displays just beginning to make meaningful use of HDMI cables and meeting existing demand for DVI and component video cables. Another avenue is supplying cables to consumers who will want to make use of the unique cross-platform capabilities offered by IEEE 1394 capabilities of the new and existing devices.

"The remaining two segments reflect an installed base," continued Milan.  "Currently, DVI and component video make up the lion's share of this market by far. We expect that over time this segment's percentage of sales will decline as HDMI increases in popularity. We expect that few consumers will completely discard their current equipment, and continued cable revenue will derive from that installed base. The IEEE 1394 segment should provide revenue through connection of computer and video peripherals to displays using an IEEE 1394 connection."

Coming To Terms With Cables
Coaxial (F-Pin) -In the beginning, it was the only signal cable available, with a modulated audio and video electronic message combined on a single wire. It is still used to input cable TV information from wall to older televisions, or on aging hardware to distribute A/V signals between a television and VCR.

Composite Video -Video-only connection, primarily for convenience when newer S-Video or component video formats are unavailable. All three video signals are sent together on a single cable. This step-up cable has the advantage of not having to modulate the signal, which can cause even more disturbance. Format uses the same cables as component and RGB (red, green, blue) video and is terminated with RCA connectors.

S-Video -Considered the best video-only connection if component is not available. Video quality is improved because video information is broken into two component parts. Cable connection is designed for premium TVs and DVDs, allowing less interference, and is a huge improvement over composite video.

Component Video -With the video signal separated into three primary parts and sent by three connectors to a video monitor, this step-up in quality from S-Video connection-only set-up improves clarity and sharpness, becoming the best format for video transfer commonly offered today. To use component, a DVD source and TV monitor must be equipped with the format. This format uses the same cables as composite and RGB video and is terminated with RCA connectors.

IEEE 1394 -The Institute of Electrical and Electronics Engineers' standard for high-speed and high-capacity digital connections of audio/video components.

DVI (Digital Visual Interface) -Maintains a pure digital format from the source, such as a satellite, to a TV monitor. It appears on select premium high-definition (HDTV) sets and HDTV cable boxes, and should be used for premium video component connection, if available, including LCD and plasma screens.

HDMI (High-Definition Multimedia Interface) -Called the future of the cable business, and already starting to replace the DVI connection, this single-cable format includes multi-channel audio and extreme high-definition video connection. It offers full 1080i resolution and a single cable running to each component. The newest HDTV models are starting to use this cable format as input, but very few DVD or satellite sources have this output. Should become the standard as more hardware models appear in the marketplace.