CES 2020: Five Key Trends
CES Is a Trade Show (Literally)
While the press portrays CES as a cross between a world’s fair and an endless buffet of press conferences, CES is actually a trade show. Most attendees are not futurists, they are buyers, vendors, and distributors trying to make deals. That means that while there are press events, an entire hall full of startups, and the occasional surprise, the biggest vendors reserve their most impactful announcements for their own launch events and developer conferences later in the year. CES is where you see the bets placed by thousands of other manufacturers around those key innovations and platforms, making it a great place to spot trends and see which ecosystems are growing. In recent years, wireless and computing have receded in importance at the show – especially with MWC just around the corner a month and a half later. Televisions and entertainment are still a big business at CES. TVs have been joined by a surge in mobility and automotive (an aspect of the show that I did not cover), wellness and wearables, and anything having to do with a connected home or lifestyle.
CES 2020 Five Key Trends
Concept Devices
Chinese Firms Undeterred by Trade Environment
TVs as Gigantic IoT Hubs and Gaming Displays
Wearables Are Becoming Medical Devices
IoT Détente
…and some mini-trends/show notes
Trend: Concept Devices
Concept devices were out in force at the show this year, reflecting various stages of development. Some were pure concepts – Sony showed an electric car, and Samsung showed off an entire concept lifestyle including smart cars, smart buildings, smart kitchens, and home robots. Samsung might bring Ballie, its concept ball robot, to market. Or not. Sony is definitely not going to sell cars. These were clear brand marketing efforts, showing off some of the work Samsung and Sony’s R&D labs are doing. They also raised more questions than they answered about what portion of the concepts are real and how seriously they should be taken.
Intel’s horseshoe bend folding-display laptop is the best kind of concept: a reference design for Intel’s OEM customers. However, we also saw concept designs from OnePlus, TCL, and Dell that are closer to market and are more questionable:
TCL showed off yet another concept foldable device, which looks and feels like an unfinished prototype. If the goal here is to get generate carrier excitement for real folding devices coming from TCL next year, this approach can make sense.
OnePlus is able to make its rear cameras disappear behind electrochromic glass. This seems like a lot of technology for minimal stylistic benefit, but if OnePlus thinks it can be a differentiating feature, why tip off the competition by showing it now?
Finally, Dell’s Alienware debuted the UFO concept handheld gaming PC. This should have skipped the concept stage entirely and moved straight to production.
Trend: Chinese Firms Undeterred by Trade Environment – Smartphones
The political environment may be dicey, but several Chinese companies used CES to enter the U.S. market for the first time, or to push major new brand initiatives. Huawei is not one of them. However, it did have a large booth at the show where it showed off its P30 Pro, the last flagship smartphone it launched before losing access to Google apps and services. Even this phone is not generally available in the U.S.; Huawei seemed to be at CES to promote itself to foreign press. In contrast, OPPO and Xiaomi are strong global competitors, but without a U.S. footprint, they avoided CES this year (they’ll be at MWC).
Best known for entry-level smartphones for the prepaid market, Coolpad has largely been flying under the radar in the U.S. with connected watches for kids. Coolpad used CES to pre-announce a 5G phone expected to sell for less than $400. Even for China, this is an aggressive price point. U.S. carrier distribution has not been announced, but it is expected (and, since the phone is sub-6 only, Verizon can safely be ruled out). More details are expected at MWC.
TCL is moving beyond its Alcatel, BlackBerry, and Palm phone brands to launch TCL-branded smartphones aimed at creating a space above $300 and below $500. There is a healthy market for this price band in Europe and Asia, but not in the U.S., where consumers either buy phones with cash below $300 or they get flagship phones financed by carriers over 24 – 36 months. At CES, TCL showed off three TCL-branded phones, one with sub-6 5G, all under $500. These phones will definitely be available in the U.S., though it is not clear which ones – if any – will have carrier distribution. More details are coming at MWC.
Trend, Cont’d: Chinese Firms Undeterred by Trade Environment – TVs
One reason TCL is bullish on creating a new value price tier in U.S. smartphones is because it has already successfully executed on a similar strategy in televisions. TCL added Dolby Vision to its line of Roku-powered TVs at CES 2018 and followed that up with QLED at bargain prices at CES 2019. At this year’s CES TCL did not go into product specifics, but it did say it will have 8KTVs and sets with mini LED (an affordable backlighting technique, not to be confused with cost-is-no-object microLED technology from Samsung and Sony).
In fact, TCL has been so successful that it is attracting competitors. Konka, another large Chinese TV manufacturer, thinks that U.S. retailers are looking for an alternative to TCL, and Konka used CES to line up distribution as it enters the U.S. Konka is licensing Android TV rather than Roku as its consumer differentiator, and it will sell LCD panels with a high number of local dimming zones in 50”, 55”, and 65” sizes. However, Konka will not have Dolby Vision on these TVs, nor is it planning to undercut TCL on price – at least that’s the plan at launch. We’ll see how it holds up to reality. Konka will bring OLED 4K TVs later in the year, sourcing panels from LG. Longer term, Konka is making significant investments in microLED. They expect pricing to reach acceptable levels in the coming years, forming a super-premium consumer tier above OLED.
Skyworth is another Chinese TV brand entering the U.S. this year, though it is setting its sights higher with premium priced 8K LCD TVs and 65” OLED models priced from $3,599 to $5,999. There is even a flagship 77” paper-thin OLED with a separate processing/sound module that features its own pop-up display for information and IoT control. No price was announced for that one, but it won’t be for the light of wallet. This is a fine lineup for China and may well be dangerous to competitors in that market. However, in the U.S., who is going to spend $3600 - $6000 (or more) on an unknown brand vs. buying from LG, Sony, or Samsung?
Finally, HiSense has been competing in the U.S. TV market at the bottom of the price curve with inexpensive TVs at mass market retail, but it, too, has ambitions to move up. Rather than tie itself to LG for OLED panels (like Sony, Skyworth, and Konka) or hope that it can out-innovate Samsung on microLED, HiSense is investing heavily in laser short throw projection. This is readily available technology, allowing HiSense to control its supply chain, but still seems like the wrong horse to bet on. Traditional front projection performs better in light-controlled environments such as a dedicated home theater, and light emitting technologies work better everywhere else – and are constantly growing in size and dropping in price.
Trend: TVs as Gigantic IoT Hubs and Gaming Displays
While vendors as varied as Samsung and Skyworth were pitching 8KTV, the added resolution makes little practical difference – and consumers know it. Consumers do like bigger numbers, so in that sense it can be a bragging right, but the biggest driver for new TV purchasers today is the availability of much larger sizes at lower prices. Amid all the hype for 8K, better audio, flexible displays, and different display technologies, nearly all the vendors overlapped in three areas:
Some sort of gaming mode. Typically this involves a low latency HDMI port and unique color and brightness settings, but TCL is getting its mode certified by THX, and LG is building 48” OLED TVs with nVIDIA G-Sync compatibility.
Voice control with support for both Amazon Alexa and Google Assistant.
The promise that its TV will become an IoT hub – somehow, someday, with details TBD. This dream of making the TV a central point for home automation is on trend – IoT is a big focus at CES – and stems from hopes that vendors can get consumers to buy more than one product if they are integrated in some way. In theory, this makes sense. Apple’s software and services ecosystem drives sales, and Apple does not even sell appliances or IoT devices. Many TV OEMs are part of larger conglomerates that do also have divisions that sell appliances and connected home devices (though not always in the U.S.). In the short term, it is not clear if OEMs can make a connected hub that provides real value to consumers, and we are sure to see many false steps along the way. But in the long run, it seems fairly obvious that large, connected smart displays will be integrated with other devices and services in the home.
Trend: Wearables Are Becoming Medical Devices
Apple’s Wearables business is exploding thanks to AirPods and Apple Watch, and the market has seen this and is rushing to cash in. On the audio front, Qualcomm’s QCC30xx Series chipset has encouraged vendors to build wireless earbuds even though there is virtually no chance that all of the hundreds of brands launching these headphones will survive. Apple has staked out an unassailable position with its iOS base now that it has both reasonably priced $159 AirPods, and $249 AirPods Pro, a high-end option that isn’t really all that expensive given the improved sound quality and noise cancellation. There were too many new wireless headphones at CES to note all of them, but two that stood out as potential strong values are models from TCL ($79; I have them in for review) and 1More’s True Wireless ANC in-ear headphones ($199 with active noise cancellation; review units coming soon). Other companies focused more on blurring the line between earbuds and hearing aids, including Phonak, Nuheara, Eargo, and Olive. There will always be a need for true hearing aids worn all day, but it seems inevitable that Apple will eventually add assistive hearing modes to AirPods, which will make it hard for these transitional products to find a market.
The Bluetooth working group used the show to announce new versions of Bluetooth for broadcast and shared audio experiences, along with higher quality audio streaming. Products based on Bluetooth LE should reach the market later this year and are sure to be a signature of CES 2021.
Apple’s Watch sales took off once it realized that fitness and wellness are key purchase drivers for the category, and it has steadily been adding health management features such as ECG and fall detection. At CES, there was an entire hall in the Sands Convention Center of fitness band/smartwatch competitors, and some of them are even more focused on medical applications:
Withings has a new $249 hybrid smartwatch with ECG and sleep apnea detection — great not only for people at risk of sleep apnea, but ideal for tracking treatment progress of a disease whose symptoms are often hidden from the patient.
Withings is also building a 4G box for doctors to offer patients so that they can track the data generated by Withings’ health management devices.
Samsung’s Heartwise is a heart monitoring smartwatch app that the company is working with Kaiser Permanente to turn into a home-based cardiac rehabilitation solution. They are far enough along that they published results in the New England Journal of Medicine Catalyst.
A Chinese startup, Glutrac, claims it has a working, non-invasive glucose monitoring smartwatch. This is in China, where regulatory oversight is questionable, and, frankly, if this was real, someone would have bought the company. Apple, Google, Withings, and others are all working on this problem, because once it is solved it will be a game-changing health innovation for diabetes management.
Trend: IoT détente
There was bit of a slowdown in the war between Amazon and Google as the early market matures and Google realizes that throwing money at the problem will not make Amazon Alexa go away. (Google did still have a massive two-story booth, but without an amusement park ride.) This reflects the fact that the consumer IoT market has plateaued: Alexa and Google Assistant are the default voice control mechanisms, each device also gets an Android and iOS control app, Zigbee is used for devices that require batteries, and WiFi is used to connect everything else.
This set of de facto standards makes it sound like IoT is mature, but the reality is that it’s a giant mess. Most consumers are buying one-off IoT products that solve specific problems rather than work seamlessly in concert in a customized automated home. There are solution sets that work together (usually centered on home security), but they don’t easily work with anything else. You can try to get disparate devices working together in a rudimentary way with the Alexa, Home, and HomeKit apps, or with kludgy cross-platform tools like IFTTT, or hire a professional to program a system like Control4. The industry has realized that it has a problem, and just ahead of CES, announced CHoIP (the Connected Home over IP initiative) to do something about it. I am deeply skeptical that CHoIP will amount to anything, but it was a frequent topic of conversation throughout the Sands’ Hall C at CES.
IoT Odds & Ends:
Amazon has been making huge investments in speeding developers’ time to market (even while it throws dozens of its own products at the wall to see what sticks). If CES proved anything, it verified that you can integrate Alexa into anything, including things, like Dux mattresses, where integration makes the product demonstrably worse. Why add complexity to a mattress, and put an Echo underneath the bed where you can’t see/reach it, instead of on the nightstand?
LG likes to use “AI” as a noun, verb, and adverb in all its marketing and messaging. LG’s ThinQ will tell you that your dryer vent is blocked or your fridge isn’t cooling efficiently so you can fix problems before the appliance stops working. It’s not clear that this is actually AI or just clever engineering, but it is useful and will expand LG’s repair business.
AI in IoT isn’t always a marketing gimmick. A Sasken smart mini-fridge with internal camera and MediaTek-powered AI to recognize food items within it seems ridiculous until you consider the use case as a minibar for hotels and AirBnbs.
Proctor & Gamble mixed real IoT (a baby-monitoring solution) with marketing stunts (various silly tech projects to promote its Charmin toilet paper brand). This was good for the Charmin brand, but caused confusion on the show floor and hurt P&G’s serious IoT initiatives.
Techsponential doesn’t give out Best of Show awards, but if we did, General Electric would win for its new C by GE line of smart light switches that can be installed in older homes by people who can’t tell their wires apart.
Other Show Notes/Mini-Trends:
AI is still transitioning from a buzzword to a technology. There were plenty of presentations where AI was used to refer to anything from AI assistants, machine learning algorithms, regular algorithms that are now somehow “A.I.,” or just a clever features that don’t have anything to do with AI at all. We may get companion robots that use AI to better react to humans with emotions – there were a lot of early versions of these at the show – but this type of AI mostly doesn’t work yet.
5G was largely absent at CES. It will be all over MWC. As Qualcomm is making sub-6 5G free for all devices using its Snapdragon 700 and 800 series processors, 5G will not be as big a competitive differentiator for device vendors as it could be. mmWave 5G is included in those Snapdragons as well, but utilizing it requires the vendor to invest in additional RF hardware (which impacts product design, not just cost), and additional testing. Only Verizon absolutely requires mmWave for a product to be “5G.” In general, 5G networks are just being rolled out, and the consumer value proposition in the short term is questionable. That said, 5G is enormously important to the carriers.
Privacy was a mini-theme in some of the CES sessions and keynotes. Samsung says it now thinks of privacy and security as part of its early design process for all new products. This is a welcome sign, but security does not equate to privacy. Samsung has a good story to tell around security with Knox, but it has much to prove in terms of privacy.
Computing: CES is usually a launching ground for laptops, and that was certainly the case this year. Highlights included Samsung’s premium Galaxy Chromebook, Lenovo’s “5G PC,” and Dell’s extremely refined update to the XPS13. However, AMD used CES to make a statement in desktops, with a new line of Threadripper processors that dramatically outperform Intel’s equivalents – at much lower pricing – for applications like animation rendering.
There was some AR and VR at CES, but we’re at a trough in the development of these technologies, with much of the growth occurring in enterprise use cases – and CES is not an enterprise show. Nreal used CES to show off its latest Light AR glasses, which are expected to ship to consumers in the coming months. They are technically impressive, with a wide field of view and a bright and colorful display. There is now a user interface that lets you open Android apps in your field of view and park them there. However, the use case for this AR – which does not map out your room for occlusion (making things appear in front of or behind the virtual objects) – is tenuous. Nreal needs a robust software ecosystem for it to have a complete product.
Finally, one more TV trend, though it was mostly limited to a single company: Samsung is investing heavily in “lifestyle TVs.” These are TVs designed to blend into your environment and display artwork (Frame) or become room divider/art objects themselves (Serif). The Frame and Serif are not new, but seeing strong demand, Samsung improved the technology being used and expanded the size range. Samsung did have one all-new lifestyle TV: the rotating Sero, designed for consumers who switch between commercial content and vertical video from mobile phones. The Sero generated a lot of interest from the press, but is going to have a tough time finding consumers who are willing to buy an expensive, motorized TV that can’t be wall mounted or placed on a tabletop just for the occasional video shot in portrait mode.
To discuss the implications of this report on your business, product, or investment strategies, contact Avi at avi@techsponential.com or +1 (201) 677-8284.
[updated Jan 30 with detail and link to C by GE smart switches]