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Saturday, January 1, 2000

Fast Moving IFE

Like an action/thriller movie, this industry advanced rapidly, both technologically and in industry makeup

James W. Ramsey and Kimberly Shepherd

Matsushita has increased its market lead, Sony is for sale, and live television is making its air transport debut. These and other developments are occurring rapidly in the fast-paced, highly competitive in-flight entertainment (IFE) market as the new century begins.

Matsushita Avionics Systems Corp. (MASC), the Japanese giant that dominates the industry, has further increased its market share from 64% to a whopping 80%, the company claims. But this is not because of any big new orders.

"The IFE market has slowed way down," says Russell Johnson, MASC director of strategic marketing, reflecting production cutbacks by the major airframers a year ago. "Not a lot of big airlines made big purchases last year. Since we own a big portion of the market, our deliveries have pushed up our share. Our competitors have just not had that many sales."

Not Just a Rumor

Sony being for sale is not just a rumor. "We are not bidding, but have looked over the fence to see if there is anything there we could use," says Johnson. He adds, since MASC has comparable products and has already established a substantial market share in those areas, it is not interested.

Rockwell Collins and others have reportedly talked with Sony about a business arrangement, but a Sony spokeswoman says nothing is final and nothing further can be said at this point.

Sextant, on the other hand, has shown an increased commitment to the IFE business. Last September, the French company purchased the remaining 49% of Sextant In-Flight Systems from B/E Aerospace. Following the acquisition, Sextant Chairman and CEO Fran�ois Lureau commented, "Sextant will move rapidly toward future solutions that integrate and enable the management of all cockpit and cabin communications with other systems such as ATC, satcom, Internet and satellite TV."

Live TV

Living room entertainment, or live television, is making headway in cabin IFE. LiveTV, the joint venture of Sextant In-Flight Systems and Harris Corp., emerged in 1998. Sextant provides the video distribution system (see Avionics Magazine, July 1999, page 30), while Harris produces the antenna and receiver.

"This is a market that will take off in the United States first," LiveTV President Andre de Greef told Avionics Magazine during a recent interview. The system has been approved by the U.S. Federal Aviation Administration, and he says it will not interfere with cockpit controls.

LiveTV targets its package at narrowbodies and currently has commitments from three U.S. carriers: JetBlue, Legend Airlines and Alaska Airlines.

JetBlue, a start-up airline based out of New York, is launching LiveTV's system on its new fleet of Airbus A320s. The airline plans to charge $5 per passenger for satellite television viewing capabilities. Each seat will be equipped with a system that offers a choice of news, sports, weather, music, children's programs, education and other specialty programming. DirecTV is the programming supplier.

Other IFE makers watch and wait. "We're waiting in anticipation to see what passengers will do, and all the large airlines are waiting to see if customers will pull out their billfolds to pay for live sporting events and news," says Elizabeth Wilson, special projects manager for Rockwell Collins.

Collins currently sells live television to the business jet market-it is a standard option on the Gulfstream V-with nine systems scheduled to be installed by Jan. 1-and other installations possible on the G-IV, Wilson says. Programming services are purchased from DirecTV.

Matsushita also closely eyes the live TV market and is poised to move. MASC unveiled its product at the October WAEA meeting in Salt Lake City and "caught everybody by surprise," Johnson says.

"Our competitors are using DirecTV-but don't have the right to show content yet on the aircraft...As soon as DirecTV signs the agreements with content providers, our competitors and we will be able to field our products.

"The difference is, we have a specific airline channel available right now for which we own the content-the CNN Airline Channel," Johnson asserts. Matsushita will work on a live sports channel next. However, installation and operation is still six to nine months away.

At this point, Matsushita also sees live television as primarily designed for narrowbody aircraft in the U.S. market. "Overseas broadcast would require use of a different set of satellites. We currently are working on receivers that will do that, but it is 16 to 18 months out," Johnson says.

Matsushita

Matsushita's new narrowbody (or standardbody) offering, its System 400, is "ready to go," but still awaits a launch customer. The system is designed specifically to fit within cost, weight, and power parameters of a narrowbody but is not just a scaled down widebody system, Johnson maintains. It is targeted for Boeing 717, 737 and 757s, and Airbus 319/320s, but also is adaptable for widebodies, such as the 767, for customers "who want an inexpensive, basic 12-channel distributed video system," Johnson says.

MASC's new widebody product, the digital System 3000, which offers video-on-demand (VOD), is expected to be operational in the second quarter of this year, but also needs a launch customer. In the meantime, MASC offers an upgraded version of its flagship 2000E system, with video-on-demand (VOD) capability. About 30 of the updated systems currently are flying.

In addition, Matsushita has partnered with Honeywell to develop a "total aircraft information system" (see Avionics Magazine, October 1999, page 42). Plans call for cabin-based live television and two-way, satcom-based file transfers for the air transport market.

Rockwell Collins

Rockwell Collins' flagship product, its fully-interactive Total Entertainment System (TES) for widebody aircraft, continues to sell. Last fall, Collins announced a five-year agreement with LanChile for installation of TES on seven Airbus 340s and seven additional Boeing 767s, with an option for seven more A340 systems.

Collins also is demonstrating a new intranet capability for TES; it allows passengers to access Web information that has been preloaded on board the aircraft. Current and future customers will be able to add this feature-available for installation by mid-year-through a software change.

In what it calls the "standard body" market, Collins has two offerings: retractable liquid crystal display (LCD) video systems for both Boeing and Airbus aircraft. For the Airbus 319/320, Collins offers a retractable 8.4-inch LCD, video control center, and system control unit.

The Boeing retractable system, designed for 757s and 737 NG (Next Generation) aircraft, features a 10.4-inch display. Production of that system will begin in May.

Sextant

Sextant In-flight Systems recently introduced its next-generation, digital media server for its m Series interactive entertainment system. This new video-on-demand entertainment server (VOD-ES) is designed to eliminate single-point failures and ensure seamless programming, even in the event of a complete server failure.

Japan Airlines was expected to start taking deliveries of the next generation servers for its new Boeing 747s by the end of 1999. The airline also planned to upgrade its current m Series systems with the updated digital media servers.

Sony

Despite reports of an impending buyout or business arrangement, Sony reports that "business is active" with anticipated further airline penetration for its P@ssport VOD system. The company has several active proposals to major carriers, and anticipates possible additional orders from its three original customers-South African Airways, Air Canada and U.S. Airways.

Sony also is pursuing its narrowbody product-P@ves-which is aboard Continental Airlines Boeing 737NGs and on British Airways Airbus 319s and 320s.

Market Outlook

Not all airlines are convinced that IFE is essential to their operations. They wait and watch their competitors, says Lutz Lotter of Airbus in Southern California.

Those airlines opting for IFE systems count on reliable systems to keep their customers happy. Most IFE systems that have been flying for a while are recording 95% to 98% reliability rates," Lotter notes, "and some as high as 99.5%."

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