CES 2017 Part 1

As I state in every CES summary, I write about the show from my prospective walking the floor during all four days. It’s not possible for me to see everything, yet I do my best to cover as much as I can while digging a little deeper than the reprints of the usual press announcements. I’m in search of trends more than specific gadgets so I compare what I see to data and observations from the prior year to get some contrast. I want to know where it’s all going and why.

One thing I noticed in the press this year was a lot more skepticism about the usual product hype. It was refreshing to see a bit more press digging through CES and drawing their own conclusions; something that’s been lacking in recent years. I think for so many regular attendees, they have seen the hype, only to have it come crashing down by the next year. I’ll cover some of what didn’t pan out this year further down. The tech press is notoriously wrong about everything as they rarely do any research behind CES before they put out their latest articles. If a product makes a claim, the press usually just runs with it without checking claims.

There were a few industry observations this year. For one, 1080P is finally gone, while virtual reality (VR) was everywhere, but then it wasn’t, sort of… Voice command technology is coming, and every car maker seems to be on the brink of self-driving to eventually be combined with alternate propulsion methods. 4K has become so cheap that there is no longer a need for 1080 and thus as a display technology, it’s safe to say it’s now very dead except for the cheapest low-level applications.

Here are the final numbers from CES 2017[1] to put the show in some context. Attendance was 184,279 this year with over 4,000 exhibitors, of which 600 were in Eureka Park alone; the start-up section of CES that takes place in the Sands Convention Center. There were 3,800 exhibitors last year. Attendance was 177,393 in 2016 so we saw 7,000 more people this time, but I’m not completely buying it. The crowds did seem smaller for some reason this year and I’m guessing it’s because more were at the Sands Convention Center roaming through Eureka Park. While there may have been more attendees, I believe most were there fewer days, some just coming for the weekend while others bugging out on Friday night.

The last two days of the show, which fell on a weekend, were comparatively lightly attended making it easier to get around. CES reported that there were 850+ first time exhibitors this year. Given that there are 4,000 exhibitors, that would put the turnover at about 21% if you’re not allocating for growth, most of which is at Eureka Park. That number feels about right as you walk the floor from year to year.

There were 67,321 exhibitor personnel in 2017 which is a gain from 65,095 in 2016. That’s more people than the entire city where I grew up. My guess is that this is all reflected in Eureka Park. Honestly, the show felt lightly attended in many ways and I suspect the growth of CES is all around young startups at Eureka Park and people who spent less time on the floor and were offsite at various meetings. It’s become a trend for cash-starved startups to stay off the strip and have as many coffee shop meetings as possible.

Here is an interesting stat: Of the total attendees last year, 68,331 registered as senior level executives and it’s down this year to 67,076. The difference could be registration dynamics, or it could be reflected in belt tightening at the senior level. That seemed to fit my impressions of the show more than the numbers reported in the audit. It felt like an off year no matter where I was. I suspect that weekend-only attendees boosted the numbers, which likely didn’t include senior management on those days.

I’m sure “senior level” means everything from tiny companies to industry giants, with most falling in the 20 employees or less category. Yet, it’s still an impressive number. CEOs from the largest corporations in the world are in regular attendance, many from outside the CE industry.

CES has very strict press criteria yet they still had 7,545 well qualified members of the press in 2016, which they claim was 1,700 more than at the Olympics that same year. I believe it. Press seem to be everywhere from year to year. Still, that was down just slightly from 2016 to 7,460. Again, more evidence that the show was a down year.

Here is something interesting. You don’t see an Amazon display anywhere at CES. They don’t have a booth and it would be easy to conclude they are not at CES, however they sent 932 people[2]. Apple Retail Stores sent 245. You didn’t see an HP booth either yet they still sent 230 people, Lenovo sent 209. Microsoft who claimed the show was irrelevant about five years ago and pulled out of the main hall sent 971 people to CES! That’s more than Amazon who has a giant retail presence!

My mission is to discover trends and explore what seems to contradict the initial press at CES as best I can. I avoid adopting the spoon-fed messaging provided at the early press briefs that are generated by the Consumer Electronics Association. Not that there is anything wrong with those press briefings, it’s just that as I’ve written in the past, this is like a whole new city for four days and there is a lot to absorb and many points of view are correct even when they sometimes contradict in ways.

The biggest surprise at the show was the continued disappearance of some big names while others were growing and consuming more space. For starters, Oculus who for the prior two years had very long lines to see their virtual reality (VR) demo, and was the darling of CES was completely gone this year. They were not listed in the directory under Facebook either. Oculus appears to be having trouble, yet VR was everywhere in a different form.

Also gone was Audi however VW Group was there. The condensation of VW was not a huge surprise given the current financial challenges because of “Dieselgate.” It also wasn’t missed by the tech community that a senior VW exec was arrested the week of the show for the scandal. That buzz was in the air.

Again, you don’t see booths from what should be logical companies, such as Amazon and Microsoft, however, as I report above, they are very much there for the same reasons I attend, and that’s to spot trends and learn where all this is going. Both companies had the chance to tell the world where it was going and Microsoft did for a very long time. Bill Gates was the keynote for years when they were the darling of all things CE.

If I had to guess, that’s why some senior leadership is down slightly as there isn’t a standout company leading the CE parade anymore. It’s now a blend of companies. The big 5 who don’t attend are Alphabet (Google), Microsoft, Apple, and Amazon, all acting like CES doesn’t matter. Yet, the numbers show they think CES matters a lot.

The TV Race

When it comes to TV, it gets harder to call which is best each year. The incremental differences seem tiny. It now comes down to fit and finish and Sony still wins that race, with both Samsung and LG close behind. We only saw one 8K display and all were heavily promoting 4K, even though their remains a limited catalog of content from the mainstream content providers… which is just about the change.

There was no mention of 3D to speak of anywhere and it was announced right after CES that all of the major players have pulled out of the 3D standards bodies and that it’s basically dead for now. If you’ve read my prior year summaries, I predicted this would be the case because of two reasons, one was the cost/utility of glasses, and the other was less than outstanding viewer experience. 3D was a great experience with some content, but not enough to justify the expense and consumers didn’t give it much value.

Samsung and LG were still pushing their curved screens. LG was pushing their thinness, referring to their thin products as “Wallpaper TVs[3]” with a thickness of just 2.57mm. There is a point where me as a consumer just doesn’t care anymore and I think we’re there. I didn’t see a lot of people standing around discussing the thinness. It’s now a given. I don’t think consumers care much about curved screens either and they didn’t seem to be much of a draw. We will see how many remain on the market in the coming two years.

Sony had two television products that impressed me more than any other TVs at the show. One was a short throw projector that was big and heavy and sat in what looked like a low credenza and shot an image of up to 120” on the wall behind it from just 7” from the wall. The VPL-VZ1000ES[4] image quality, color and brightness was outstanding. It won’t be cheap at $25k, not including the screen. Still, the image quality was very impressive and rivaled any wall mounted TV. I see it having very limited applications where a large 100” or greater TV just isn’t practical.

The other very cool product was Sony’s CLEDIS[5] image panels, which stands for Crystal LED Integrated Structure and the assembled display was measuring a whopping 9’ by 32’ of completely seamless 16” X 18” panels. The image was outstanding and it was nearly impossible to tell that the panels were at all modular unless it was turned off. The product has been on the market for a little over a year already and the applications will primarily be commercial, but the implications are significant because they can be assembled in any configuration. It has its downsides, first each panel is heavy, and thick and the price is somewhere between $5k and $7k per panel with the wall at the show costing somewhere around $800k. That’s a lot of money for a video wall, but it is impressive.

Westinghouse[6], of all companies, seems to be on the right track and had a 4K TV with built in Amazon Fire TV and Alexa, boasting access to 7,000 channels. It’s the last feature that caught my attention, 7,000 channels and as I looked further it was through an open source program called Kodi[7]. The internet is going to be the primary pipeline to content over time. I believe that whoever can cram more content sources into a TV with ease of use wins the game. Picture quality seems to be at a point of diminishing returns and it’s felt that way for several years now. The images were all fantastic, everywhere we went.

The Chinese brands are still struggling with fit and finish. While they all had equally impressive screens when compared to the better-known brands, if you looked closely, the corners all had gaps and looked particularly low quality. They were not even close in execution to the familiar brands from Korea and Japan. It’s almost like they don’t care, just make it cheaper.

The content pipeline represents a real challenge for rural communities that are still stuck with very low data rates, some as low as 0.5 Mbps as a max rate and you know it’s significant less than that in real world use[8]. That’s barely faster than dial-up! This means that homes in population centers are advancing technologically while homes, farms and commercial enterprises in very rural settings are left in the dark ages. It’s a bit like not having electricity, or telephone service in the 50s. We now have multi-gigabit service in the Seattle area by comparison, and that’s four figures faster than what rural communities can find and that gap keeps growing. This is a big national problem that needs to be solved.

Virtual Reality

Almost all of the VR we saw at the show was handset-based (smart phone), complete with the slight lag that made you feel queasy after the demo. As I wrote, Oculus was out of the show and now there is a lot of talk about the future of the Facebook-owned company. There was talk at the show about the novelty of VR wearing off and the lack of interesting content. Those who bought VR discovered that the fun quickly wears off and that the use of VR requires a very large space to take full advantage of the goggles. While there was a lot of buzz, it seems to be a bit like 3D where it may find a niche, but customer acceptance of the technology is not as certain as the industry thought it was over the past two years. I do believe it will flourish in commercial applications such as training, architecture and design applications.

Probably the coolest thing for me personally was at the NASA display where I put on a pair of VR goggles and walked on Mars. It could have been Arizona, but it still captured my imagination and I didn’t want the demo to end. It nailed the kid in me who dreamed of exploring the planets someday. But like all VR, I’d only be able to explore at a small area.

360 Cameras

I’ve written about this for years and I do think it’s where VR’s content will come from. There were several solutions out there, one from Kodak boasting about that very thing. Record your 360 image then strap on VR goggles and relive your vacation trip. I do see that application taking off in the coming years especially as the software improves. Eventually with VR, you will be able to take anyone with you on vacation in real time and look any direction they want.

The implications are much bigger, from drones to crowd tracking to just about everything you can think of. The applications are endless. 360 cameras will improve everything from automotive to security, and all forms of streaming. I even see its use in telepresence robots where you can both move and turn your head. I even see it showing up in telescopes.

This to me is one of the most wide-open fields in tech yet it’s yet to catch on with consumers. Most are still thinking point and shoot and that’s not at all where everything is heading. This is a huge category and I’m expecting to see big things in coming years. This is the category to watch.

Big Picture

This was my 14th year at CES. I was thinking about some of the bigger trends since that first show I attended. One of the biggest changes is the slow but steady elimination of buttons and dials as we’ve slowly become comfortable with touch screens and now very accurate voice commands. Apple trained us well. Do you remember when Bill Gates said consumers would never adopt touch screens? They have become the preferred interface because that touch can mean just about anything. Amazon Echo has just two buttons on top along with a dial. You will see more and more products head in this direction and this will impact how we think about controlling our living spaces. There was a time when more buttons signified greater depth. Now it represents the dinosaur.

The general trend seems to be visual simplicity but this is nothing new. The iPhone and iPad has made us comfortable with black faces on devices and now voice commands are next. I see this extending to everything in electronics. The future will be far less touching.

Voice Assistance

I was thinking about the success of the Echo and how there was so little mention of it at CES last year. I was pondering how that product has become such a huge success in such a short time, completely catching and surpassing Apple’s Suri for usefulness in the home. I have five Alexa-based products now and I can honestly say they changed my life. Unlike Siri, or the voice commands in your car, Alexa actually works! Apple believes it’s leading this technology when in fact, they are making ever-smaller incremental changes to tired product categories by adding Siri only to fall flat because of a rather dismal user experience.

Amazon released the Echo in September 2015 and was barely noticed on the landscape at CES in 2016. I made no mention of it last year because there was no buzz to speak of that made it a standout product. To most it was nothing more than a Bluetooth speaker that did voice commands and was assumed to be a me-too to Siri. By spring of 2016, the Amazon Echo with Alexa, that actually does what it’s supposed to do caught fire and they have not looked back. This year at CES, there were many products that now claim to be Alexa-enabled and Ford made the announcement that they too will produce cars with Alexa.

Google with their Google Home is not far behind, but they didn’t have as much buzz at CES. Google has this annoying way of always showing up looking like a “me too” product, be it an Android phone or some other device that never becomes a better experience than the product they want to beat. In spite of their powerhouse search engine, I didn’t get the impression from CES that they were going to surpass Alexa. This is going to be a giant category and if you don’t have an Echo, you’re definitely missing one of the most useful tools to come along since the iPad.

Apple completely blew a major role in this category with their dreadful Siri by comparison that can’t seem to recognize half of what I ask. I don’t know about your experience but Siri, but mine is underwhelming when compared to Alexa. It’s not even close. In contrast, my Amazon Echos are used every day. I rarely use Siri because it gets my requests wrong so often that it’s completely annoying for me. Apple has since released their own “me-too” product in an attempt to catch up, but good luck. As I sit here writing this, I just tried Siri to see if it’s improved. Nope, not really. While it has improved a little, it’s not there yet.

Again, Apple could have completely dominated this category with their own device, given their dominance with iTunes, AppleTV, iPhones, iPads, etc., yet they were never mentioned anywhere at CES and it was as if Apple is just the thing that exists. Handsets from other manufacturers appear to be catching up while Apple languishes under Tim Cook. I now see Apple on a slow decline. This was the first year that the show didn’t appear to be paying much attention to Apple. I believe it will pay even less in 2018.

As I edit this for fall 2017, Apple just announced their iPhone X and to me it’s not going to impact any aspect of my life. It’s again an evolutionary product versus revolutionary. The new watch will change my life. I will be an early adopter. The new phone not so much.

What CE often fails to realize is that convenience is to consumer electronics what water is to slope. It is the direction everything flows. Apple’s nee iPhone X does nothing to make my life more convenient, while Alexa-enabled devices are changing everything. I’m interested in the new 3rd generation Apple watch because it does add convenience to my life because it is an actual phone.

USB-C

Apple has embraced USB-C for their new MacBook Pro and we did see more devices that were now adopting USB-C. I didn’t get the impression that Apple is leading that parade, but rather others are adopting it because of size and capability. I see this becoming an important technology and will continue to watch adoption across a wide product spectrum.

Meanwhile on the wireless side 802.11ax will ship sometime in 2017 and so products containing those specifications on both sides will see a 4X speed improvement over 802.11ac. This is a significant speed boost when you think about moving data via wireless at a whopping 1.8Gbps. This will be especially important for homes containing a lot of wireless devices.

I think this has big automotive implications because you can so quickly move content to the car to be used in places where cell signals are weak. I suggest taking a look at how poor cellular coverage remains in the US in rural environments. I also see fewer homes pulling wire so the fatter the wireless pipe to master all the connections, the better.

As I sit here now, I have 24 Wi-Fi connections live this very second in my own 4,000 sq. ft. house. I suggest looking at your own router at home because you may be forgetting some devices. My garage doors are also Wi-Fi, and so is my home alarm, in addition to wired, I have Apple TV, TVs that use wireless, iPads, phones, laptops, desktops, printers, lighting, thermostats, Echos, a Beam telepresence robot, and a lot more. It adds up fast. Soon it will be most kitchen appliances, and already washers and dryers are using wireless, so are sprinkler systems, lightbulbs, clocks, remotes, and where this is all going is power management. Even if the average household has just four devices, that’s still 500 million devices in the US alone and that number is about to explode.

Return of the Laptop

We saw a lot more laptops on display than we have in recent years. We didn’t see that many tablets as it’s looking like a saturated market. Laptops were once considered to be a thing of the past and were almost completely gone at CES, except for a few peimarily Chinese off-brands, however this year it seems like just about all of the usual suspects had a laptop with a touch screen.

The fact is, people still love using a keyboard that has a pleasant feel to pressing keys. I don’t see this category going away, but I do think we will see fewer iPad competitors because of the problem of diminishing returns. While all the components get better, they are not radically changing people’s lives.

If voice recognition improves to the point where it can put words down faster than I can type and keep them all in context, then we will see keyboards begin to disappear. Right now, typing is still the most accurate way to put words in order. There are a lot of complexities around dictation software, such as background noise, punctuation, context, revised and or modified sentence structure, that make it a bigger challenge than it sounds. The other issues have to do with train of thought as you type. Word recognition latency makes it hard to sustain a train of thought or clarify a way of saying something.  Still, it’s coming.