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What Is tru2way's True Potential?

NEW ORLEANS -- The Cable Show -- Panasonic Corp. (NYSE: PC) says it has some good reasons to jump headlong into the budding tru2way market, but the consumer electronics giant is cautious about the technology, too, according to Paul Liao, the chief technology officer of Panasonic's North American division.

Following up tru2way product plans unveiled at the Consumer Electronics Show, Panasonic came to town with a of family set-tops and digital televisions based on the platform, including an HD-DVR box combo, a "portable" DVR, and a 42-inch TV from its Viera product line. This fall, Panasonic expects to introduce two tru2way-based TVs -– the 42 inch set it's showing here, and a 50-inch set.

Talkin' tru2way

The beauty of tru2way, proponents say, is that it allows consumers to access two-way digital cable programming without the need for a set-top box. Earlier "one-way" Plug & Play TV sets, hampered by installation issues and costly product returns, did not prove to be popular retail products, Liao says. And he says research conducted with Clear Horizons indicates that consumers actually do find appealing these tru2way-powered TVs, which support video-on-demand (VOD) and other applications traditionally linked to set-tops.

Liao says out that 57 percent of analog cable subscribers and about half of the digital cable subs surveyed showed interest in set-top-free digital televisions. The biggest reason? They didn't want to pay the monthly fee for the cable box. Also, consumers liked the simplicity of having digital cable services without having to install a separate box.

Still, there are plenty of challenges ahead for tru2way in the consumer market, including educating consumers. "All they [consumers] know is tru2way is something that's difficult to say three times fast," Liao jokes.

Another hurdle is that TVs with tru2way baked in will cost more than other digital TVs that will require a set-top to run cable's interactive services. "There will be a difference," Liao says of the price between sets with tru2way and those without. He didn't say how much that difference will be during a follow-up conversation with Cable Digital News, but industry insiders believe the retail markup for tru2way will be more than $200. Likewise, it's anticipated that MSOs will help to subsidize those added costs to help fuel the cable industry's retail strategy.

Liao also expects the premium on tru2way to drop as volumes rise and more powerful chips are made to support the interactive cable platform.

With all of the tru2way activity expected at the show, is this the year for tru2way? Probably not, according to Gary Sasaki, president and principal strategic analyst for digdia, a research firm based in Cupertino, Calif.

Tru2way "won't be a major factor for purchase immediately," he says, noting that the brand probably won't have significant meaning among consumers until 2011 or 2012. "That's when it will start to become visible to the average consumer," Sasaki predicts.

— Jeff Baumgartner, Site Editor, Cable Digital News

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