So I’m waiting for a flight out of Las Vegas. Along with the +170,000 other people who attended the Consumer Electronics Show (CES) this year. It’s crazy. The CEO of Delta Airlines said they added an additional +30 daily flights to Las Vegas for the event. Crazy.
I was here for five days and attended the press conferences and media events. I took a ton of notes on what the big companies said and have posted my notes here.
My 6 main take-aways from CES and on where “consumer electronics meets digital” is going are the following:
#6: CES – and consumer electronics – are mostly about the US and China.
I’ve done quite a few press calls this week and the big question is whether Chinese companies are avoiding CES because of the US-China trade dispute. Note: I mentioned that Chinese companies may be “laying low” but that it was just a guess. My little “laying low” guess has apparently become a fact and that is now the headline of a lot of press accounts. Media can be a strange echo chamber.
Yes, there are fewer Chinese companies this year. But keep it in perspective. There were about 4,400 companies at the conference in total. Of those, 1,300 were Chinese (down from 1,500 last year). But 1,300 is still huge. And there were only 1,700 American companies. So if you add the US and China together, you get 68% of all the companies at CES.
My take-away is that CES – and consumer electronics in general – are overwhelmingly about the US and China. These are the two biggest markets for most of these consumer goods. And most of the companies in attendance (including from the US, Japan and South Korea) manufacture some or all of their products in China.
And walking around the conference, you could also hear Mandarin everywhere. There were thousands and thousands of Chinese in attendance, dwarfing any other foreign demographic. And you can add to that all the Chinese media and quite a few KOLs.
#5: New Retail (i.e., Retail + Tech) is the fastest moving sub-sector right now.
Consumer products are all getting smart and connected. They are going digital – and many are expanding into services and platforms. Virtually every company presenting was talking about this. There was everything from smart toothbrushes and smart underwear (a real thing) to smart cars and smart homes.
However, within this phenomenon, some sub-sectors are definitely moving faster than others. And retail has been moving particularly fast in the past year, especially in China.
At CES, Suning had a particular good exhibit on this subject. They highlighted how they are using technology in retail. This included:
- Customer tracking, mostly with computer vision. The store knows tons about everyone who walks in, where they go, what they look at and so on.
- Inventory tracking, such as measuring where items are, which items are looked at by customers, expiration dates and so on.
- Augmented reality, where what you experience in the store (what you see and hear) becomes a combination of the physical store and online information and tools. This is pretty amazing. You can see what a chair would look like in your home. Or pull information when a particular apple was picked and where.
#4: Smart Homes are the next fast mover.
There was a lot of focus on smart homes at CES. The traditional device and appliance makers (Haier, LG, Panasonic) and the smart device makers (Samsung, Sony) were all pitching their Smart Home products and services. Basically, they are all trying to go from hardware to hardware plus software (plus AI). And they are doing this in a hurry because the tech companies (Google, Amazon, Alibaba) are using Smart Speakers / Virtual Assistants to extend into peoples’ homes. There is a real fight for who is going to dominate the customer’s home. And this is obviously a big transformation for traditional appliance and device makers.
This is also happening quite quickly. After new retail, this is the next fast mover and I think this will be a big story for 2019.
The products and software themselves are all ready working. There are smart refrigerators, washing machines, air conditioners, light, door locks, and so on. And customers are starting to buy smart speakers in significant numbers. So all the major companies had nice exhibits with sections like Smart Entertainment, Smart Kitchens, Smart Washing and Cleaning, Security, Home or Care Bots, and Home Utilities (lights, power).
What we haven’t seen yet is a real break-out product or service. Something that gets tons of adoption by consumers. There has yet to be a killer app in the space. But it is likely coming.
Another interesting question is what device will consumers use to control their smart home? Will it be different than what they use to control their smart car or smart phone? The Smart TV makers (Hisense, Sony) argue that the television will be the point of control for the home. Amazon says it will be a virtual assistant via voice and computer vision. Samsung had a compelling argument that a Smart Refrigerator is where most families meet and talk. And there is a good argument that people will just use their smartphones, like they do for everything else.
I tend to think consumers will use their smartphones plus voice and screen controls (virtual assistants) in the home. And I think a lot of these smart home functions (lights, heating, security) will be passive, where it will happen without much consumer input or awareness. I also think this could be very different in China and the US. But I’m just guessing.
#3: AR and Assisted Driving Are Probably Happening First in Mobility.
Mobility and smart cars is just a huge topic. Electrification, shared mobility, smart cars, access vs. ownership of vehicles, AI, AR. And it also includes the idea of smart cities (which communicate with the cars). It’s just huge.
Of course, most all the automakers were at CES talking about mobility and smart cars. The data tech companies (Amazon, Google, Alibaba) were also there and were talking about extending into smart cars (and smart homes). Even the chip-makers (Intel, Qualcomm and Nvidia) were there talking about smart cars, smart cities and mobility. Interestingly neither Didi nor Uber were there.
But within all this, I think it is Assisted Driving and Augmented Reality that are coming next.
Toyota gave a great press conference about assisted driving. They made the point that fighter pilots fly their planes in a computer-assisted fashion. The pilot moves the controls but only within an envelope allowed by the computer. You can’t pull the stick too far up and stall the plane. You can’t fly too low to the ground. Assisted driving in cars will be the same. You will drive but the AI will keep you within an envelope of safety. Not too fast. Not too sharp in turns. And as the car sees everything in every direction (and beyond line of sight), it will alert you to dangerous situations emerging far ahead or coming up behind you. Assisted driving will both limit you and augment you. Toyota calls this Toyota Guardian.
The other big advance that is likely coming soon is augmented reality for the driver. This just awesome. You won’t just see the road through the windshield. You will see views of every direction. And you will see information overlayed. You can see the road ahead even through the rain and fog. You can see people walking on the sidewalks up ahead, and the AI will tell you which are not paying attention. You can see open parking spaces within buildings. And keep in mind, connected cars operate with a hive mind. Whatever one car sees, all the others will see. Augmented reality brings all this to the driver.
#2: Everything is getting smart and connected. This is resulting in an explosion of use cases and creativity.
As all these consumer products become connected and smart (i.e., data driven), they start to have the ability to do new things. Smart bicycles made bike-sharing possible. Smart toothbrushes can see your teeth and show the images to your dentist. Smart hairdryers can sense the heat of your hair and adjust the heat appropriately. I don’t know what smart underwear does but I think it’s medical.
What we are seeing is an explosion of use cases and creativity. Virtually every company at CES was pitching new use cases that are now possible with smart, connected devices. Most of these ideas will probably turn out to be useless (like most of the original dot.com companies). But many will become very important. And it’s great to see all the creativity unleashed.
#1: AI in everything.
And my number one take-away from CES 2019 is that AI will be the core of consumer electronics. Virtually every company was talking about AI. And not just a little. Everyone was bringing it up about every third sentence. It was everywhere.
Much of the AI hype is just hype. AI currently has huge limitations. But there are pockets of useability where it is almost magical. Perception AI (machine vision and natural language processing) is an example of this.
So if consumer electronics has been merged with digital in the last few years, I think it is merging with AI in the next few.
And that’s my take. My brain is tired after a week of this. I’m going to tune out and watch Gotham on the plane home. Thanks for reading. And cheers from Las Vegas Airport, Jeff
I write and speak about digital China and digital competition.