Top U.S. cable operator Comcast Corp. (NasdaqNM:CMCSA - News) said Thursday that starting next year it will buy set top boxes from Samsung Electronic Co. (KSE:005930.KS - News) that let users hook up portable music players and cameras.

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Reuters

Portable media, connected devices dominate CES

Thursday January 5, 8:18 pm ET

By Sinead Carew and Philipp Gollner

LAS VEGAS (Reuters) - Portable digital media and myriad devices connected to the Internet dominated the biggest U.S. technology trade show on Thursday, underscoring how entertainment has broken free of the living room.

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Among the gadgets introduced was a digital music player from computer memory company Sandisk Corp. (NasdaqNM:SNDK - News) that it hopes can nab sales from the iPod nano.

Asian electronics makers, auto makers, computer and phone companies are out in force at the Consumer Electronics Show, also known as CES, in Las Vegas, aiming to define their roles as new technologies blur the lines between industries and allow for media on the go.

Many insisted in years past that the PC might overtake television as the prime way consumers would enjoy digital entertainment, but with the proliferation of flat-panel TVs and portable viewing devices, the contest is now more multifaceted. No one device will likely dominate.

Verizon Communications Inc. (NYSE:VZ - News) said on Thursday it`s expanding its television service to more states and has signed up 20 percent of the market in the Texas community where it first offered the service.

And Maxtor Corp. (NYSE:MXO - News) announced a new collection of Maxtor OneTouch III external storage and back-up disk drives aimed a home users, creative professionals and business users. Larger rival Seagate Technology (NYSE:STX - News) has announced plans to buy Maxtor for nearly $1.9 billion.

The Sandisk player, called the Sansa e270, with 6 gigabytes of storage, is expected to cost about $300 and looks similar in design to Apple Computer Inc.`s (NasdaqNM:AAPL - News) iPod nano. Like the nano, the Sansa uses flash memory chips.

Sony Corp. (Tokyo:6758.T - News) Chief Executive Howard Stringer, in his keynote at CES, said consumers now more than ever control how, when and where they want to view video or listen to music, which, increasingly, is carried about on portable devices such as MP3 players.

``Content is no longer pushed at consumers, it`s pulled when they want it and how they want it,`` Stringer said, who added that the transition to high-definition television would shake the industry.

``The scale of the transition from analog to HD (high definition) will make the shift from black-and-white to color small by comparison,`` Stringer said.

Stitching everything together will require elegant software that makes devices -- from media centers to hand held gizmos to PCs to cell phones -- easy to use and intuitive, executives say.

``The software is where the magic is. If you`re going to have all this power be simple enough, appealing enough and cool enough, it`s going to be because the software is right,`` Microsoft Corp. (NasdaqNM:MSFT - News) Chairman and Chief Software Architect Bill Gates said in an interview with Reuters before his Wednesday evening keynote speech at CES.

Top U.S. cable operator Comcast Corp. (NasdaqNM:CMCSA - News) said Thursday that starting next year it will buy set top boxes from Samsung Electronic Co. (KSE:005930.KS - News) that let users hook up portable music players and cameras.

Verizon Wireless announced a music download service for its subscribers with a catalog of 1 million songs, going head to head with its biggest rival, Sprint Nextel Corp. (NYSE:S - News), which launched a similar service last year.

Verizon Wireless is a joint venture of Verizon Communications (NYSE:VZ - News) and Vodafone Group Plc (London:VOD.L - News; NYSE:VOD - News) .

Earlier, Microsoft`s Gates downplayed the threat from Web search giant Google Inc., noting that the company has long faced a host of rivals ranging from IBM to Apple Computer Inc. to Sony and Nokia in its bid to control the next generation of software.

Later on Thursday, Paul Otellini, the chief executive of Intel Corp. (NasdaqNM:INTC - News), the world`s largest chip maker, will discuss the company`s plans to overhaul its brand and hasten its diversification from depending mostly on microprocessors for its sales growth and profits amid a maturing PC market.

(Additional reporting by Franklin Paul and Daisuke Wakabayashi)