Dolby Labs Gets First Tablet Win With Amazon Kindle

By PATRICK SEITZ, INVESTOR'S BUSINESS DAILY

Editor: It's happening finally. I believed that when life get better, people will surely want better sound, no matter from what kinds of devices and Dolby is the number one choice.

While tablet makers emphasize high-definition displays to create a great video look, some say audio quality fell to the back burner.

But with new Kindle tablets unveiled Thursday, Amazon.com (AMZN) hopes to change that. The e-commerce leader became the first company to incorporate Dolby Laboratories' (DLB) Dolby Digital Plus audio technology into a tablet computer.

Dolby sees tablets as a market where it can boost its presence and revenue.

The hand of Amazon CEO Jeff Bezos shows a Kindle Fire HD tablet, equipped with Dolby Digital Plus, at Thursday's product unveiling. View Enlarged Image

The San Francisco-based company has been shopping Dolby Digital Plus to tablet makers. Dolby executives have been demonstrating the software as an application on a Samsung tablet running Google's (GOOG) Android operating system. But Kindle is the first taker. Dolby Digital Plus will be a feature of its new Kindle Fire HD tablets.

Dolby hopes other tablet makers also adopt the audio technology.

Even with the side speakers available with today's tablets, Dolby Digital Plus improves audio for movies, music videos and home videos.

"It's very impressive," said Tim Bajarin, an analyst with Creative Strategies. "It will make sound or audio the next battlefront in tablets. All the tablets on the market now have inferior audio and part of it's because there's only so much you can do in a small space with speakers. What's interesting about what Dolby did is they did all of this with software."

Some tablet makers have focused their audio efforts on headphone use. But tablets are often a shared experience for two or more users to watch videos.

"People are saying, 'I've got great screen resolution, but why is the audio so bad?'" said Mary Anderson, senior director of marketing at Dolby. "We've done the video thing. The other piece of the pie is audio."

Consumers have accepted poor audio on tablets to date, but they're getting more discerning.

"We have seen some other audio technologies from multiple companies," Bajarin said. "But (Dolby technology) is the best we've seen so far."

To boost sound quality, Dolby custom tunes its software for each device. That's why it wouldn't be ideal to offer its software as a downloadable app, Bajarin says.

The first tablet maker to use this technology is "throwing down a gauntlet to the rest of the market," Bajarin said. "This is a new level of differentiation. Users will love it."

Amazon executive Dave Limp called Dolby Digital Plus "a perfect complement to the sound system we designed into the Kindle Fire HD tablets. Customers have told us they want great sound for movies, music and games."

The Seattle-based e-tailer said it aimed to make the audio quality of its new high-def Kindle match the quality of its HD display.

And that's Dolby's pitch.

"We're trying to make a product that can build consumer loyalty," Dolby's Anderson said.

Dolby sees quality audio as a premium experience that can differentiate high-end tablets from rivals.

Mobile is "a serious focus for us," Anderson said. "It's a natural progression for us. It's in our DNA."

Dolby has taken its audio technology from stereos to movie theaters and home theater systems, and now mobile devices are next.

"The pieces are in place to set the new bar for entertainment experiences on mobile devices," she said.

Dolby Digital Plus for tablets includes such technology as volume leveling, a surround virtualizer and a dialog enhancer.

Dolby hopes to ride the growth of tablets. Research firm IDC sees tablet shipments reaching 222 million units by 2016, a five-year compound annual growth rate of 26%.

Dolby's sales could use a shot in the arm. On Aug. 2, Dolby reported disappointing fiscal third-quarter sales and guided to lower Q4 sales.

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