In this sense, iTunes.com could be benefiting from the very same up sell long favored by fast-food restaurants and enjoyed by mass market merchandisers as shoppers pick up impulse items to go along with their planned purchases.

Sri Peruvemba, VP of Marketing at EInk, cited the accuracy of DisplaySearch’s forecasts for e-paper as he told a compelling story about the wide array of e-readers we’ve seen introduced since the debut of the Sony Reader, particularly outside the U.S.

During the Q&A session, one attendee acknowledged the potential for these products to enable “a library in your pocket” as transformative for developing nations. Sri also noted that the arrival of textbooks for e-readers, which are seen by many as the key to driving strong growth beyond leisure readers, is coming sooner rather than later.

On the other hand, he was nonplussed about the iPad, falling back on the superior readability and battery life of e-paper. He also noted that the forthcoming Apple slate would be much heavier than a typical e-reader - a factor that consumers would feel as they tried to hold the device in one hand for extended sessions.

As noted in NPD’s e-Reader’s Snapshot report last year, consumers interested in e-readers want content such as newspapers and magazines. These publications’ need for color, interactive multimedia, and video were cited as opportunities by Brian Gally, senior product director for Qualcomm MEMS Technologies, which has developed the Mirasol display.

While a Mirasol device prototype I saw at the show was certainly impressive, what was even more impressive was the best-in-class battery life improvements the company claims we will see for these devices. These claims will be put to the test soon, as Qualcomm notes that we’ll see products using Mirasol displays launch before the end of the year. For EInk’s part, Sri countered that it would offer color e-paper products before the end of the year, and that it had video working in the labs.

In my questions following the presentations, panelists addressed how cash-strapped publishers would be able to afford investing in reinventing their magazines developing expensive video and multimedia assets, and how the greater content consumption demands would affect the free cellular access that has helped to enable the Kindle’s success.

There were no clear answers, but both men expressed great confidence that a wide array of display opportunities ranging from power-hungry high-volume handsets to large flexible digital signage would provide plenty of room to maneuver around the LCD juggernaut. Indeed, in their worlds, the future is so bright one will need a reflective display.

We have certainly seen large retailers buy into these kinds of services before, such as Best Buy’s nascent acquisition of Napster in 2008. Since then, Roxio snapped up CinemaNow, which also offered a mix of models of obtaining video-on-demand, but Vudu was further along in its ties to consuming content on televisions and thus a more robust competitor to DVDs and Blu-ray discs, particularly with its relatively high video quality. Vudu had also emerged as one of the key alternatives to Netflix for digital viewing, and its lack of a subscription requirement has made it more palatable to studios for digital distribution of movies day-and-date with the DVD/Blu-ray version.

As I blogged before regarding the Barnes & Noble Nook, there are untapped opportunities for retailers to more tightly tie digital distribution with the in-store experience. While Vudu currently doesn’t support mobile devices that consumers could physically bring to Walmart stores, consumers could rent an older catalog title via Vudu and get a discount coupon to pick up the modern remake on Blu-ray in the store.

Certainly, attributes of the iPad held appeal for some e-reader owners. According to NPD’s recent report, e-Reader Owners: Attitudes and Usage, about a quarter of e-reader owners expressed interest in having a touch screen in their next e-reader, and a third of e-reader owners said that they wanted a color screen in such a device. Apple platforms also featured prominently as alternative devices for e-reading, with the iPhone serving that role for nearly a fifth of e-reader owners aged 18 to 34.

However, e-reader owners overall seem to appreciate the fixed purpose and optimization of their device, with about 40 percent of e-reader owners saying they were looking for more battery life in their next e-reader whereas the iPad offers less than e-paper-based devices. Furthermore, the majority of e-reader owners said they had taken advantage of no supplementary functions, such as Internet access or playing back music, on their e-reader. (Yet, part of this could be attributable to these experiences being less engaging than they are on the iPad; Barnes & Noble noted this when explaining its decision to exclude Web browsing functionality from its Nook.) Then there are the pricing differences, not just the $240 premium that the least expensive iPad holds versus the Kindle 2, but in Amazon’s subsidized wireless broadband that can be justified due to the limited and transaction-oriented nature of its 3G access.

The iBooks functionality of the iPad has received disproportionate attention because it is new, because it touches a growing category that attracted many new entrants at CES, because it addresses another device that has wedged itself into that narrow chasm between smartphone and notebook, and because it captures the optimism of a media that generates words.

While the iPad may signify the kind of device that represents much of the future of e-reading, it is something new. Rather than throwing cold water on the Kindle, the iBooks feature will ultimately compete far more for attention with the device’s other content-consumption features for those who see the value in a converged product.

At first I admit, I didn’t take any pictures. I was being careful not to fall down and crush the camera with my fancy helmet (skiing safety has clearly been upgraded since the 80s). Then I realized the kids weren’t going to jump off of the ski lift and I was going to live through the day without cracking a bone, so I relaxed enough to take a few cute shots of them on their rides up the bunny slope lift.

Then I got a text from my friend whose son was with us, asking for some pictures and a video of her son that we could send to her mom who was very ill and in the hospital. Frankly, I hadn’t even thought of the smartphone as a capture device for the day, but for this occasion, my idea of the smartphone image quality as “questionably good enough” turned into a small miracle as I shot the little guy zooming down on his snowboard. I emailed video and pictures right to his grandmother’s hospital room where she was suddenly not isolated and bedridden, but on a sunny mountain watching her grandson flying by.

As the day went on we traded back and forth among the cameras, the flash camcorder, and the phone, depending on who was with the kids, who had taken off their skis, and was taking a rest because their ski boots were killing them. Of course there are other options to the way I captured and shared images that day. I could have been more “prepared” with waterproof, shockproof, freeze proof, and wifi with a different camera and memory card. But, in this one case, none of that mattered. The cameras and camcorder were there to help us remember and celebrate later, in a beautiful glossy photo book or in full HD on a huge flat-screen. But the value of a simple image and a video to transport an experience as it was happening, to someone who wasn’t able to enjoy it in person, was real and unexpected joy.

Photography is not just about great image quality and aspiring to a perfect shot, but what it means to the recipient, how it can change a day, how it changes lives, and connections. That’s what this business has always been about; new technology enabling us to do it better every day. And you don’t even need to wear a helmet.

Furthermore, with its 9.7” screen, the iPad does not fit into most definitions of a MID (Mobile Internet Device) that have typically been between 4” and 7”. That said, the iPad will face some of the challenges that have plagued MIDs as another attempt at a “tweener” device. That challenge is how it competes against less expensive fixed-function devices such as portable game consoles, portable DVD players, digital picture frames, e-readers and portable media players when it is more expensive than many of these.

While the iPad, unlike Apple’s handhelds, hasn’t grown out of an established category, it will address some of these competitors by secondary, contextual functionality. For example, nobody would spend $500 for a digital picture frame, but the iPad can serve that role when it is otherwise idle. The iPad also has a fair shot at doing to the portable DVD player what the iPod did to the Walkman and offers unique gaming and e-reading experiences. And while it has significant promise for use as a multifunction rear-seat video player, its size actually precludes it form competing with a number of devices, such as portable navigation devices, where its smaller siblings compete.

The iPad crystallizes the opportunity for embedded mobile multifunction devices. To win against dedicated devices, they must fill a critical mass of needs well enough to justify the price premium. With the iPad’s app portfolio, developer attention, and Apple’s distribution, it has one of the best chances to date of making that case.

Combined with strong point-of-sale data from NPDs Retail Tracking Service, where IT sales overall were up 14 percent and positive performance from NPD’s Distributor Tracking Service, where December sales were up nearly 16 percent, it does appear that sales are looking up across all the major customer segments heading into 2010. Of course, we do want to temper the improving results we have reported with the recognition that comparisons against the generational meltdown during the fourth quarter of 2008 are likely to be a bit flawed and that we do need to see these trends continue through the first quarter of2010 to be certain that these are not just false positives.

However, inside the reseller data we see a number of positive data trends that leave us with some level of optimism. Unlike consumer sales, reseller improvement was more broad-based and not just the result of the PC land rush we saw post-Windows 7. Sure both desktops and notebooks performed admirably, but unlike the consumer market where those two categories accounted for 50 percent of consumer spending in December the reseller channel is more diverse depending on PC clients for only about 16 percent of total volume in December. More exciting is the up-tick in average prices that are becoming more pronounced through this channel. With unit volume remaining tepid the gradual growth in ASPs we have seen leads one to believe that SMBs are buying core products that are essential to their business growth and are willing to spend on those as opposed to just general spending on IT products. A couple of examples will serve us well here. First is the server market, where we saw ASPs move to over $3000 in the fourth quarter. This is part of a trend that extends back into mid-2008 as we have seen share move into higher-priced servers (over $4000 products accounted for over 20 percent of sales volume) a strong indicator, when combined with the low levels of unit growth, that strategic buying of core hardware continues while less crucial purchases continue to be postponed. In networking devices we see evidence of this trend as well. While the fourth quarter always tends to deliver higher ASPs in 2009 wired network devices saw a 22 percent jump over third quarter selling prices, far ahead of the 2 percent increase we have seen in the fourth quarter of both 2008 and 2007. The net result was a nice revenue increase in December for wired network devices despite anemic unit volume growth, which has been traditionally the engine that drives revenue increases in IT.

All these measures put together while, we want to emphasize again, are at least partly the result of seasonality and the weak comparisons to 2009, ought to at least give the marketplace the confidence to expect better times ahead as we move into 2010.

In conclusion, this should signal the death of the whole slate/pad/tablet concept, and now Apple has put a stake in the heart of that concept. However at $499, with its media directed functionality, it could make a play for the companion computing market the PC world discovered in 2009 with the netbook. And with unit volumes for notebooks and netbooks up 60 percent during the holiday season according to NPD’s Retail Tracking Service, there is a huge unit opportunity for Apple that they have now chosen to attack.

Indeed, one of the few tablets to debut at the show is designed to be shipped as part of a more traditional device. The Lenovo U1 won accolades for its design in which a tablet computer detaches from a netbook form factor and can function independently. It’s a Windows-based netbook in clamshell mode and a Linux-based Web appliance in slate mode. While the device cleverly subsumes the tablet into the netbook purchase, it does so at a price of close to #1,000. That could be at least as expensive as buying two devices anyway.

This year’s CES stalemate reminded one of a CES three years ago when, more than 400 miles west of Las Vegas, Steve Jobs promised to reinvent the telephone with the release of the iPhone. That set off a frenzy in which rivals first tried to match the iPhone’s look and input methods, and later its capabilities and application support. Now, the company that goes first is setting itself up for arrows in his back. But unlike in the folk tale of William Tell, those arrows will be coming from an Apple, not toward it.

Which got me thinking about the teens.

No, not those teens, rather the time between now and 2020. We’ve seen forecasts about 3D TV adoption, content in the clouds, touch, and super high speed broadband. Here are a few musings readers can save for a few years, until the next decade dawns. They’re mostly about music, but a few insights are also relevant for books, games, or movies.

1) Paid is the new free. The trend toward free or “freemium” will come to an unhappy end. Someone a lot smarter than I am will figure out the right platform for delivering content, especially music, to a mass market — and find a way to monetize its distribution. The experiments with unpaid (or “b”ad-supported) distribution will come to an end only when content creators and owners, and the people they support (managers, producers, even caterers) realize there isn’t a future to be found there. It’s unclear whether the solution will involve blanket licenses, subscription models or hardware and service bundles, but pay we will. Except of course for the few incorrigibles who will continue to trade illegally — but that’s another story.

2) Digital rights management (DRM) lives! “Music doesn’t want to be free”? (Whoever wrote that makes a living writing about music and not creating or selling it). Protecting content from massive sharing somehow became passé in recent years. Consumers have a reasonable expectation of fair use for their content, and creators have a reasonable expectation that copyright will be respected. Movies and games are protected;, so why not music? In the coming years new DRM schemes will be created that will allow us the flexibility to use content where we want to, whenever we want to, and on all the devices we own. It will be the content-owner’s option to unlock the DRM and permit massive distribution.

3) The Kings — After the passing of Michael Jackson pundits claimed there will never be another “King.” They are wrong. From Jolson to Sinatra, Elvis to The Beatles, there’s always a king. The savior is out there somewhere. We’re way overdue for something new; a captivating artist and genre that will seize our imaginations with both talent and celebrity.

And if the first two predictions come true, there will be enough of an industry to nurture, promote and compensate “The King”.