Are Web services replacing some consumer hardware?

Will Web services fulfill the same functions found on today's CE devices? Some panelists answered "yes" and others "no," during a panel presentation at a pre-CES briefing in New York today.

NEW YORK CITY (BetaNews) - On the first day of the new "Digital Downtown" show,
Adam Guy, general manager for telecommunications for Web analytics service Compete Inc., argued that consumers tend to look at new software and services simply as new alternatives, or "adds," rather than as replacements for devices.

New Internet-based GPS services from Verizon Wireless, for instance, fulfill different needs than dedicated high-end navigation devices, illustrated Guy, in answer to a question posed by Steve Koenig, director of industry analysis for the Consumer Electronics Association.

But Jim Bottoms, another panelist, contended that consumers are more interested in the services themselves than in how the services are delivered.

"In the end, people don't want a device. They want access to a service or access to communications," according to Bottoms, who is co-managing director of Understanding & Solutions.

To another question raised by Koenig - whether downloadable content is Blu-ray's biggest competitor -- Bottoms suggested that big changes are happening in content distribution, too.

In the music industry, for instance, the artist Prince earned $50 million for his most recent album, by giving it away to consumers for free as part of a promotional deal with a large UK newspaper, Bottoms said. In contrast, Prince has earned merely $2 million for his most recent album before that, achieving that much smaller sum through conventional CD sales.