The CES this year had about 110-120K attendees, and 2700+ exhibitors, both about the same as last year. Before the show there was talk that attendance would be higher this year, but it wasn’t. Ballmer and Mulally (Ford CEO) gave good keynotes. Stringer (Sony CEO) didn’t keynote this year but instead gave a press conference. Several vendors like Lenovo, HP, and Dell didn’t have booths though they had strong presence at the conference. Everybody I spoke to was admitting that 2009 was a brutal year for consumer electronics sales, but the buyers of large electronics retailers, e.g., Best Buy, were optimistic about 2010. The store buyers I spoke to indicated that the Christmas season went well for consumer electronics. This was another show demonstrating CE evolution rather than revolution.
Themes
1. 3D televisions and monitors for gaming. Every manufacturer (Sony, Samsung, LG,
Toshiba, Panasonic, etc.) introduced 3D television monitors of different sizes. Most will be available starting 2Q10; prices
were not discussed. Manufacturers’ interest in 3D TV makes sense since over the
past year 3D movies did well in the box office and are providing one of the few
bright spots for the movie industry. Content availability will be an issue. I
got tired watching segments from Avatar.
ESPN and Discovery announced that they will create new channels with 3D
content. Panasonic said that they will
also create a new channel with 3D content in order to stimulate demand for
their TVs. The TV manufacturers are also
working on up-converters to enable 2D content to be presented in 3D. All the 3D TV sets require special glasses
(LG showed a model that doesn’t require glasses but the 3D effect disappears
once you move more than 15 degrees off center).
Will consumers be interested in wearing such glasses while watching TV
in their living rooms for extended periods of time? Will consumers be ready to purchase 3D TV
sets since most have just purchased their first HD sets. 3D gaming monitors
(NVIDIA’s was impressive but I also saw one from Dell) may make more sense
since there is more content available and hard core gamers are already used to
using and wearing different gear in order to play. 
2.
A variety of form factors for PCs (laptops, netbooks,
smartbooks, tablets) running Windows 7, Android or other proprietary operating
systems. It is interesting to see the adoption of Android by more device types (see below the notes on tablet computers and on mobility) which I believe will also facilitate the adoption of Google's applications like Gmail and Google Docs. Many of these devices can now
support Natural User Interfaces (even netbooks can now have multi-touch
interfaces). It will be interesting to see how the broader public accepts these interfaces in their computing devices.
There were several introductions of tablet computers in the show. The Microsoft/HP tablet (the Slate) received positive comments, and so did Lenovo’s (pictured below). Motorola and Dell also announced tablet computers. None of these were available on the floor for direct interaction. Interestingly Dell’s, Motorola’s and another tablet from HP will use the Android operating system. If Dell's tablet computer succeeds in the market, then it has the potential of further accelerating the adoption of Android and of Google Apps (including Gmail) in the enterprise and could have the same impact that Dell computers had on Windows when Dell first adopted Windows 10 years ago or so.
It may take a couple of years, most likely by the time the current generation of netbooks will be replaced, before consumers determine what are the type of devices (netbooks, smartbooks, tablets) they prefer. And of course everybody is anticipating Apple’s announcement later this month for its own tablet computer. It will also be interesting to see whether tablets evolve as full-fledged computers (very much like laptops are today) or become more specialized devices for media consumption and web surfing. I think that Apple's tablet is more likely to be a more specialized device rather than a full-fledged computer. In any case I think that tablets will compete with e-readers, the next big theme of this year’s CES.
3. E-readers. Several e-readers were introduced in the show by small and large companies. There are relatively minor differences among these readers, including the fact that they are all pretty pricey. The lack of clear feature differentiation (Hearst’s Skiff device, for example, is aimed at magazines and newspaper reading) and high price will make it hard for consumers to select a device so adoption may not be as strong as analysts predict. It is also not clear whether any of them will offer strong enough competition to Amazon’s Kindle. Finally, depending on the functionality of tablet computers, the price difference between tablets and e-readers may not be enough to justify getting both devices and may ultimately help tablets.
4. Natural user interfaces for non-computing devices. Touch-based and gesture-based interfaces were demonstrated for a variety of devices (TV sets, white boards, interactive media walls, etc.). Here again one can see the influence of Apple's UIs. These interfaces and the interaction paradigms they support will definitely mark a big shift on how consumers interact with devices in their homes and at work.
Toshiba’s
gesture-based TV control
Intel’s
interactive world map
5. Personalization continues as a theme. Several companies like Vudu, Vizio, Microsoft, Samsung and others demonstrated video content and Internet application marketplaces that are accessible through TV sets. The user interfaces for accessing such content are much better this time around and borrow heavily from Apple-style UIs around the iTunes store and the iPhone App Store. They make much easier for users to personalize their digital home-entertainment experience by integrating and accessing Internet and video content into their TVs.
Ford announced that it will be publishing the APIs around Sync so that new applications can be integrated into the platform. They announced Pandora’s integration into Sync which will be good as it will lead to further personalization of audio content in the car. But the announced integration with Twitter will be bad; who needs additional distractions.
6.
Mobility.
In addition to mobile computers like netbooks and tablets, and continuing the trend from last year’s CES, this year mobile phone manufacturers presented another stream of smartphones that are iPhone wanabies. Several
of these smartphones will also be using Android. I didn’t see anything noteworthy from Nokia, Motorola,
Blackberry, Palm, or Microsoft (though rumor has it that Microsoft will make
significant announcements at next month’s Mobile World Congress in Barcelona
7. Energy-related technologies. Manufacturers continued to tout their products’ energy efficiency. There were several relevant product introductions particularly around home and office energy usage monitoring. Too many technologies are trying to establish themselves as a standard.
Investment ramifications
I, like many of the other attendees I spoke to, would characterize this as an “evolutionary” CES rather than a “revolutionary” one in terms of the importance of the introduced products. From an investment perspective I left the show with three takeaways:
1. The evolving user interface practices. Over the past couple of years we have been
talking about the consumerization of enterprise software. The interactions supported by and the user
interfaces of newer enterprise software applications, e.g., salesforce.com’s, are
being influenced by consumer-oriented social media applications such as
Facebook. The emerging Natural User Interfaces will start finding their way to enterprise software applications as
well so it will be important that we start paying close attention to how they
evolve in consumer products.
2. Smartphone platforms. We need to continue monitoring how particularly
iPhone and Android will evolve and how they will be tiered with the other such
platforms, e.g, Blackberry, Symbian, and Windows Mobile. Which platforms will be able to successfully challenge
Apple and create rich application ecosystems?
Will mobile application companies find it easier and cost-effective to
develop new applications for these platforms, or will porting among platforms
will be as hard as porting across devices been?
It also seems to be that even after the acquisition of AdMob and Quattro
there may still investment opportunities for mobile advertising and mobile payment
application companies.
3. IP-based video will be a big deal so infrastructure to support it will be important, though it’s not clear that this will be a space favoring small companies.
Comments