Consumer Electronics Show, the annual lovefest for gizmo geeks is all about broadband. From plasma screen televisions to wireless VoIP phones to digital recorders, every single consumer electronics device is now packed with silicon, is connected and thrives in a broadband environment. It is still early in the game to figure how it will all play out, but my guess is that if you don’t have a pipe to the Internet, you as a gizmo seller don’t have much of a chance. In the past, ABI Research analysts say, that the “consumers bought a piece of equipment such as a radio or a TV that would reproduce network content without additional costs.” Now the model is selling services to better use those device.

Case in point, Akimbo, which announced that it has signed partnerships with The History Channel, A&E and National Geographic to bring content to the buyers of its slow-drip digital playback device. Or TiVo which is selling devices for bargain basement prices, only to make money on services. Clearly, this is a new way of doing things, however, it is still hard to predict which model will stick and turn a profit. Playing it safe, I would say the cable operators are going to be the key winners of this so called “subscription model.” Vamsi Sistla, director of residential entertainment technologies at ABI Research, very succinctly sums it up when he says, “The larger message is that the consumer electronics industry must work more closely with the service provider industry.”