CES 2013: What Happens in Vegas, STAYS in Vegas

By LEVI SHAPIRO

This week was 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", alternated between1.95 million square feet of exhibition space and the craps tables. Unfortunately for the 3250 exhibitors, their marketing dollars were completely squandered. Although I will share a few trends, when it comes to CES, what happens in Vegas STAYS in Vegas.

Two years ago, the blockbuster product from CES was 3DTV. The press went gaga but consumers didn''t understand the logic of parting with a month''s salary for conflicting 3D standards and a pathetic 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. That does not compare well to the 30.2 million who tuned into Sunday Night Football last week. In fact, the audience is so small that Nielsen can not even measure audience viewing preferences....there simply aren''t enough viewers.
Last year, the blockbuster CES announcement was Ultrabooks, Intel''s answer to tablets and Smartphones. At $1,000 per unit, consumers made it clear they were quite happy with their tablets and Smartphones. In 2012, reserch firm IHS counted only 11 million Ultrabooks sold, less than half of an already reduced estimate. However, Intel found a good way to put some of those unsold Ultrabooks to good use with this color synchronized lightshow spectacle.

 

In fact, although 22,000 products were launched this week, the only blockbuster announcement to occur during CES in the last decade was back in 2006. Apple, which abandoned the conference racket years ago (including MacWorld), 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 chrystallized a few key trends that already gained 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 announced an 84" model while Samsung and Westinghouse showed their 110" UHD sets. Panasonic, which will lose nearly $10 billion this year, made the keynote address and showed 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 are more meaningful than yet another screen.
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. For example, LG added Near Field Communicatons to its appliance line. There were also many gee-whiz demos by the handset and tablet OEMs allowing different devices and platforms to wirelessly share content. However, we may see few real-world cases in 2013 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 OEM''s fixation on vertical integration means a glaring lack of industry standards for cross-network communications. The good news: whenever consumers get repeatedly hosed, disruption awaits. Expect the Year of the Snake to bring some interesting solutions. 
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, deposting glue to bind resin powder or using layers to fuse metal particles. While there were 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.
 
click here to see video of Ford 3D prototyping
 
5) The Most Exciting Category Was Automotive: Historically, US consumers purchase around 16 million vehicles per year. That number plummeted as low as 10 million in the last recession. Acutely aware of the need to innovate while the market is strong, carmakers have embraced the open API model within the vehicle. GM and Ford, which together sold about 15% of the world''s cars last year, both announced their own new app framework to support 3rd party apps- www.developer.gm.com and www.developer.ford.com.  Toyota introduced its wireless re-charging technology, which will have an extremely limited use case. Israeli start-up Powermat announced an expansion of its offering for GM and other vehicles. Finally, Nissan demonstrated an LTE-ready vehicle. 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, Director of Emerging Technologies at IDC, calls the ''supply side'' approach. "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 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".
Whether you are attending trade shows like CES this year or simply trying to connect the dots, be wary of the hype. Beause usually what happens in Vegas, STAYS in Vegas.