CES 2013 Preview: What Happens in Vegas, STAYS in Vegas

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Guest post by Levi Shapiro*

This week marks the annual orgy of PR excess known as the Consumer Electronics Show. More than 150,000 (mostly male) visitors, many sporting T-shirts with mysterious acronyms like “4K in HD3D”, will alternate between 2 million square feet of exhibition space and the craps tables. Unfortunately for the 3,200 exhibitors, their marketing dollars will be squandered. Although I will predict a few likely trends, when it comes to CES, what happens in Vegas really does STAY in Vegas.

Two years ago, the blockbuster product from CES was supposed to be 3DTV. These were a hit with everyone except the American consumer, who didn’t understand the logic of parting with a month’s salary for a multitude of 3DTV standards and a paltry amount of 3D content. Two years later, at any one time the entire number of US households watching any 3D channel is only around 110,000. Compare that to the 30.2 million who tuned into Sunday Night Football last week. In fact, the audience is so small that Nielsen cannot even measure audience viewing preferences…there simply aren’t enough viewers.

Last year, the blockbuster CES announcement was supposed to be Ultrabooks, Intel’s answer to tablets and Smartphones. At $1000 per unit, consumers made it clear they were quite happy with their tablets and Smartphones. Research firm IHS counted only 11 million Ultrabooks sold last year, less than half of an already reduced estimate.
In fact, although more than 20,000 products will be launched this week, the only blockbuster announcement to occur during CES in the last decade was back in 2006. Apple, which does not even attend CES, rained on everyone’s parade by pre-announcing the iPhone, a full six months before its actual release. Nicely played, Mr. Jobs.

Despite the noise, CES 2013 will chrystallize a few trends already gaining momentum in 2012:

1) Software trumps gadgets: Last year, Samsung and LG each announced 55” OLED TVs. This unleashed the Freudian urges of their competitors. This week, Sony will announce an 84” model while Samsung and Westinghouse are planning to show 110” UHD sets. Panasonic, which expects to lose nearly $10 billion this fiscal year, will make the keynote address and show off its nifty 156” UHD set. All of this ignores one important constituent- the consumer. In the App economy, it is the software and the experience which can be grafted on top of the platform. Make-my-life easier software, such as efficient home energy use, v2v (vehicle to vehicle) communications and other experiences will trump any gadget.

2) Apps Learn to Shake Hands: The average US Smartphone owner has 44 downloaded apps (Nielsen). Virtually none of these are able to integrate with one another. The next wave of Smartphones and tablets, including both Android and iOS, will come equipped with NFC chips. Expect to see lots of gee-whiz demos by the handset and tablet OEMs that will allow different devices to wirelessly share content experiences. However, we may see few real-world cases because of Trend #3

3) Consumers Continue to Get Hosed by Vertical Integration: Stubbornly high gas prices mean that consumers really do want to use their Smart devices for a more eco-friendly lifestyle. Theoretically, sensors should be able to provide an Internet of Things (IoT) today. That means your Apple phone communicates with your Toyota vehicle, GE oven, Mitsubishi refrigerator and LG air conditioner. However, the emphasis on vertical integration means a glaring lack of industry standards for cross-network communications. The good news: whenever consumers get repeatedly hosed, disruption awaits.

4) 3D Printing is Improving and Almost Mainstream: Home 3D printing is done in a variety of ways. This includes using UV light to cut polymer resin, thermal fusing of plastic filaments, cutting and laminating paper, depositing glue to bind resin powder or using lasers to fuse metal particles. While there will be some incredible demos at CES, and some amazing industrial examples such as prototyping at Ford, 3D printing cost and quality is still not quite mainstream. However, the gap is closing quickly.

Ford Prototyping

Ford Engineers using Makerbot 3D printers for prototyping

5) The Most Exciting Category This Year Will Be Automotive: Historically, US consumers purchase around 16 million vehicles per year. That number plummeted to as low as 10 million during the last recession. Acutely aware of the need to innovate while the market is strong, expect to see carmakers embrace the open API model within the vehicle. Israeli start-up Powermat and other wireless charging products will become more than a novelty. Finally Nissan has already demonstrated an LTE-ready vehicle in Tokyo. Expect to see other automakers announce their own 4G-enabled vehicles.

If your interest is connecting the dots to predict emerging technologies, you can skip the trip to Vegas altogether and focus on what Dan Yachin, Research Director of Emerging Technologies at IDC, calls “the supply side”. “We look into start-up companies, at very early stage or even in stealth mode, as these are the fastest to respond to an emerging need. We also look into R&D of established companies as well as academic research, which all appear to be linked to a certain problem or different aspects of it. Identifying and defining these clusters at their initial stage of development requires us to maintain ongoing relationships with the entire innovation ecosystem. The insights gathered from these players enable us to connect dots that sometimes seem unrelated. Using a follow-the-money method where we keep track of funding and M&A, we see how different trends gradually gain momentum. This methodology has enabled us to successfully predict emerging technology trends”.

Whether you are attending CES or simply trying to connect the dots, be wary of all the hype from CES. Because usually, what happens in Vegas STAYS in Vegas.

* Levi Shapiro  is a Professor in the Media Innovation Lab at IDC and Partner at TMT Strategic Advisors He works with media and technology companies from Tokyo to Tel Aviv and is a regular columnist at the Jerusalem Post.

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Levi Shapiro

Managing Partner at JIMMI Fund
Levi Shapiro is the Managing Partner at the JIMMI Fund, a corporate venture investment fund, and concurrently Partner at TMT Strategic Advisors. He is also the organizer of Marketing & Ad:Tech Israel (www.adtechsummit.com), Israel's largest conference for digital advertising.

During a 20 year career inmedia and technology, including 7 years in Asia, Levi launched new business units(IBM), new products (Toyota) and new startups (TwoMinute Television, Snack Mobile, etc).

He teaches Entrepreneurship and Mobile Marketing as an Adjunct Professor at IDC Herzliya, serves as Mentor in Residence for The Hive accelerator and writes a bi-weekly column about digital media and technology in the Jerusalem Post called "Unleavened Media ".

Mr. Shapiro is a graduate of Tulane (BA), Cornell (Asian Studies) and MIT (MBA)
Follow Levi

Levi Shapiro

Levi Shapiro is the Managing Partner at the JIMMI Fund, a corporate venture investment fund, and concurrently Partner at TMT Strategic Advisors. He is also the organizer of Marketing & Ad:Tech Israel (www.adtechsummit.com), Israel's largest conference for digital advertising. During a 20 year career in media and technology, including 7 years in Asia, Levi launched new business units(IBM), new products (Toyota) and new startups (TwoMinute Television, Snack Mobile, etc). He teaches Entrepreneurship and Mobile Marketing as an Adjunct Professor at IDC Herzliya, serves as Mentor in Residence for The Hive accelerator and writes a bi-weekly column about digital media and technology in the Jerusalem Post called "Unleavened Media ". Mr. Shapiro is a graduate of Tulane (BA), Cornell (Asian Studies) and MIT (MBA)

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