CES – New Technologies Coming, but Will People Buy Them

Early sessions at the 2014 International CES show, presented by the Consumer Electronic Association (CEA), gives us a glimpse into the future consumer electronics opportunities and threats. The show officially kicks of today in Las Vegas, NV and runs through Friday. CEA’s Chief Economist, Shawn DuBravac, called out the trends to watch at this year’s show, including:

Mass Customization

As more data is available on consumer habits and preferences, the ability to do more customization of products will grow. What may be lost in this move to “big data” is that while it provides good and rapid information on short-term needs, it may not provide long-term trend analysis for future development.

Multi-Dimensional Screen Expansion

There will be 75 to 100 new wearable displays featured at the show; many of them Smart watches. Worldwide sales of these devices are expected to be over 1.5 million units in 2014, up from 1.0 million units in 2013. U.S. sales were 600,000 units in 2013 and are expected to rise to one million in 2014. By 2017, smart watches will rise to 4.2 million units worldwide; 2.8 million shipments will be in the U.S.

Dubravac noted that the economics behind wearable technology didn’t allow it to be successful five to six years ago when they first entered the market. The cost of creating the devices made them too expensive to be economically viable, even if the technology could be built. This is a common scenario in technology markets where new products take longer to develop than impatient market observers want.

Age of Autonomy Starting to Deploy and Embed Sensors

Sensors are becoming ubiquitous in a number of different devices. There is now hybrid innovation – complex solutions being packaged together. Automobiles are the predominate application in this area, creating autonomous vehicles and self-driving cars. These cars use cameras and get sensor data along with data from the cruise control system, create adaptive driving data, and others.

Sensors are now solving driving problems including crash avoidance and parking control. It is now possible for drivers to take their hands off the wheel while still having auto-parking control. Dubravac predicts we will see more sensor applications as production for these devices goes from scarcity to abundance.

Curation and Context

As more data is collected, service providers are finding more ways to offer detailed content options to customers. As an example, Netflix is using a series of algorithms to provide specific content to users. The algorithms are already rather complex, but if Netflix could gather data from additional end user devices, such as smartphones or environmental conditions and the number of people in a room, could they modify the content offerings to the customer? These seem very intrusive, but perhaps a direction desirable for some consumers.

Our View

Since the consumer electronics market is very mature, vendors must either find improved technology that is significantly better than what consumers already own or they must develop services that give customers more capabilities.  What is clear is that as all vendors are trying to improve their products. There is really little true differentiation in the devices and therefore, the services will be the differentiators.

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