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One of the classic problems with digital technology is what is known as the "cliff effect": when digital signals reach their limits, they don't fail gracefully like analog ones do---they go off a cliff and crash hard. Not only has the tendency for digital signals to exhibit their limitations noisily in the audio recording and playback environment been a problem for engineers and listeners, the effect on the digital broadcast industry has been tough to circumvent as well---until now.

This will be a huge year for the electronics industry, insiders are saying in the wake of the just-finished 1999 Consumer Electronics Show. This one "surpassed anything we've seen before," said Gary Shapiro, the president of the <A HREF="http://www.cemacity.org/">Consumer Electronics Manufacturers Association</A>, in a post-Show statement. "Our industry is driving the technologies that will define the digital age."

MP3, the popular and controversial Internet music format, took a big step toward legitimacy last week. Z Company, which operates San Diego-based <A HREF="http://www.mp3.com/">MP3.com</A&gt;, announced that it had attracted $11 million in venture capital from idealab! and Sequoia Capital. Z Company will change its name to MP3.com Inc. to reflect the company's core business interests, said president Michael Robertson.

The most important issue facing the high-end audio crowd at this Show is the looming battle for high-resolution audio formats. DVD-Audio and SACD posturing was everywhere, with SACD probably displayed the most. But it was a relief to see that manufacturers were starting to consider putting both SACD and DVD-Audio processing in a single box, thus making the choice for consumers much easier. This means that the makers of disc players are not forced to choose sides, and are able to please everyone. It allows consumers, as well, to make a single-player choice and be covered for the coming armegeddon. But it will put record labels in a tough spot: which format will they support for their releases---SACD, DVD-Audio, or, somehow, both? We'll keep you informed.

The last day at CES is low-key. Displays at the Las Vegas Convention center are already being broken down by mid-day, and many attendees have already left.

On the occasion of a recent major birthday, my significant other, Bonnie, gave herself a "mid-life crisis" present&mdash;a beautifully restored, bright yellow Porsche 911. She'd spent the previous several weeks wading through reference books to figure out exactly which year and model she wanted, and each night we'd discuss the pros and cons of various models, options, and points in the 911's +30-year evolution. Bonnie explained to me that, throughout its production run, the 911 maintained the same basic design and a consistent set of engineering goals, but was continually updated and refined. In her mind, the 1973 Targa was the one to have, the last and fastest of the lightweight 2.4-liter models.

J<B>anuary 9, 3pm</B><BR>Some fascinating prototypes were on display at the Madrigal breakfast at Bally's this morning---and we can't tell you about them. But when the Cone of Silence is lifted, you can bet we'll spill the beans, particularly in view of Madrigal's confidence that there will be a future market for very-high-quality surround-sound music reproduction. In the meantime, we <I>are</I> able to report that the new Proceed DVD transport has enough upgradeability options to allow for just about any future digital format: DVD-Audio, SACD, CD, DVD-Video, etc. The transport will also allow for easy upgrading to future interface schemes such as IEEE 1394. And, unlike many other DVD-Video transports, the Proceed should be able to play CD-R discs. For two-channel fans, the Mark Levinson No.32 Reference preamplifier is in production and will be available next month. Price of the two-chassis, dual-mono unit, without phono stage, will be in the region of $15,000. Madrigal is already back-ordered.