CES 2017 Part 2
The Sudden Shock of CES
As a small company exhibiting a product at CES, it’s sometimes very hard to know where you stand in the market until this event. All the intel in the world can’t prepare you for what you’re about to see and in many cases, don’t know what’s shown behind private meeting walls. You may think you have the only device that has some compelling function in particular, only to discover on opening day that there are a dozen more products just like you, of which most are a better. Some pack up and go home after that first day.
For some, CES is sell or die, where unless they get orders, they don’t get that next round of funding and they are done. Others find CES to be just the boost they needed, which was our case. CES set us up for the world market and without it, we would have been further out of touch.
As I walk the halls and witness the 22% turnover every year, most of those came to CES as their very first shot. Some spend a lot of money for their debut at CES expecting to wow the audience only to end up looking like they wore the same costume two dozen people wore the prior year. For some it’s the embarrassment of a lifetime as you get your ass handed to you in the first hour of the show by unrelenting press.
More than half the products on display are of no real significance in the market and end up just taking up booth space without ever finding customers in the US. You see a lot of USB devices for the car, from fans to lights to gadgets with a lot of ports. If you were new to CES you’d get the impression that every Chinese company that can make something, even if it’s obsolete, useless, and often poorly made still shows up and dominates the show by volume.
For many foreign companies who fly from all over the world to exhibit for the first time at CES, this is the first sober reality check that the product they are selling just doesn’t measure up in the world market. Because of this noise, it makes it much harder to find the outstanding products that are noteworthy. You could look at a dozen radios before you find one that has something unique that you’ve never seen before.
Circular Firing Squad Marketing
There was a company called LINK, yup, LINK. I’ll write it again, “LINK.” Think about that stand-out name for a moment. Google the name and try and find their product under the name “Link”. Give it a shot on Amazon while you’re at it. Try it with a combination of any words you can think of for a consumer electronics device. I dare yah!
This was unquestionably the most naive company I came across at CES on multiple fronts with some of the worst marketing I’ve ever seen. Not only did they pick a completely unrecognizable name for the one-product company, they built a massive booth and paid huge dollars for Center Hall space, the most expensive space at CES. This is an expense they will likely never recover given their stage in growth. Their booth included a wrapped Nissan GT-R that had no relevance to the product, but seems more likely something the CEO wanted to drive back home. Incidentally, the GT-R wouldn’t get noticed in any major population center, however I’ll bet it’s a hit in tiny Superior, Wisconsin, population 27,244.
The booth was completely pointless on all fronts. It lacked any clear messaging, product category identifiers, or anything compelling to justify such a huge booth. They knew very little about trade shows and it was painfully obvious. On the day I walked by, there was very little boot attendance, another solid clue that nobody cares and that you’re messaging failed. It was beautifully designed and built but was completely meaningless.
This is a company headquartered in Superior, run by what would look like a very inexperienced management team who somehow managed to raise money. Never mind the location of the company in one of the most remote places in the Midwest. Given I spent much of my formative years in Wisconsin, and wishing all Wisconsin tech companies well in this space, this company didn’t get much right and I hate to say it. I wanted to cheer them on but the first thing I’d do is fire the CEO.
They won a CES Innovation award but for what? Largest pointless booth? Fastest way to waste $5 MILLION dollars? Yup, that's what they raised. The product is nothing more than a wireless solid-state data storage device that’s both waterproof, and encrypted. So-what? They try and make the case why I need it but I was far from convinced. Judging by traffic, and the lack of press at CES, they completely screwed up. Rather than spend the money on a massive pointless booth, they could have spent a fraction of strategic PR and gone much further and reached a larger audience.
Toshiba launched a similar product in 2014, except not water proof. This was clearly a case where likely non-sophisticated investors about tech bet on tech without realizing the lack of product strength in the market. Obviously their trade show strategy was lacking.
Do they have any idea that the large storage companies, who know what consumers want, can squash them like a garden slug on a busy sidewalk? There is a fundamental question they probably didn’t ask having to do with the reason someone needs the product in the first place. The number of people who need massive storage, wireless streaming AND be waterproof is a very tiny market.
Still, in spite of assuming they know how CES works, they made the decision to not just launch this product but spend pails of money to build a booth that was larger than GoPro’s! This doesn’t include the cost to fly a crew out to man the booth, house everyone, etc. I’m guessing it was a $4-500k spend. The typical cost to show with at CES with an average booth is around $150k, all in. This CEO would have a more promising career pumping gas!
The product, simple as it is, is still in pre-order as of September! Of course, they can’t execute either. I think it’s unlikely we will see them at CES in 2018. We will look for them to see what they do next. If I were investors, I’d be extremely mad.
Rather than me post a link to this limping disaster, I’ll let you see how tough it is to find. Hint, use Superior, Wisconsin in your search.
Dubious Product Rollouts
CES always has its share of phony products that are not even working prototypes. The one that made us laugh very loud because of the moxie of the company that presented the clothes folding machine at CES. Seven Dreamers[9] displayed what was to be an electronic clothes-folding machine. What they actually showed was a black box with what was probably someone standing inside who took the messy clothes off one shelf and put the folded clothes on the other shelf. Never mind that the folded clothes were not the same color. Details, details.
Rather than wait until they had a working prototype that they could show some mechanical aspect, they instead went well past the line of concept and never once said to the audience watching the demonstration that this was merely a concept of what it would do.
They also claim a $60 million-dollar investment from Panasonic and I somehow doubt it. In further checking, there were three investors, one of which was Panasonic. It doesn’t say how much Panasonic invested, but it could be as little as a dollar to use their name. Furthermore, it could also mean that the $60 million from all investors requires some specific milestones be met.
Based on what we saw, it was a major negative and the type of hype that doesn’t belong at CES at this stage of product development. I suspect they were there to try and raise money without having anything of substance to show.
Sony Pro-Audio Walkman
Sony always has one of the most interesting booths because you never get the feeling they are just about selling consumer electronics. It’s always a place where you see a lot of innovative products and not just products for a mass market. It’s where the geeks hang out. They do some projects that, well, they are just cool.
One that was especially neat if you like machined metal was their Premium Walkman with High-Resolution Audio[10] that sells for $3,200. I recommend taking a look at the link and watch the video. Simply put, their goal was to produce the best sounding portable audio device ever made.
What always intrigues me about Sony, is their willingness to push the boundaries and try what nobody else dares, even when there isn’t a strong business case. You see it in every element of what they do, leaving them in a unique class all their own and always one of my favorite booths to visit.
As I wrote about last year, Sony is still actively working with their employees to develop crowd-funded products that are matched with development dollars from Sony. It’s nice to see these products advance each year as a part of what they call the First-Flight program[11].
Panasonic
Panasonic had one of the most compelling booths because of their messaging, which is always clear and spot-on. They can’t compete with the showmanship of Samsung and LG but drew large crowds by showing off their industry partners, such as Tesla, Boeing, and others where they play a part in R&D. Panasonic understands the CES audience and is focused on clear messaging about their commitment to innovation, and where it’s all going. It’s always one of the more interesting booths and not a place where you’re going to be dazzled by their latest products, but instead fascinated by what they are doing.
Rather than me write endlessly about what they were showing at CES, check out this link of summaries at CES[12] and you can see for yourself.
3D Printers Gone?
We saw very little progress in 3D printers this year with many absent from the show and I don’t know why. I suspect it’s a useful software issue and the complexity of designing a product in 3D. I still think this is a massive category and resolutions keep improving but there remains a gap with the overall use case and I think that will narrow.
I’ve written this before, but there will come a time when we will print the hardware we need at home rather than run to Home Depot every time we need something. They already have 3D printers in store and while it’s still a novelty and probably gets very little use thus far, I’m guessing it will catch on.
One other obstacle is that 3D printers are extremely slow and that also has to change. While it’s still faster than sending out prototypes to third parties, it’s just not fast enough. Again, that too will change.
Still Very Little 4K Content
Once again, there was still very little 4K content at CES. Apparently, consumers aren’t demanding it or it would be there by now. It’s coming, and as of this update in September 2017, Apple will be converting all movie titles where they have studio cooperation into 4K and converting all movies sold from 1080 to 4K at no additional cost. This will be a huge boost to 4K demand.
Ten Years of iPhone!
This CES marked the ten-year anniversary of the iPhone announcement that changed the whole world of consumer electronics. The iPhone was one of the most carefully guarded secrets at Open Interface. We began discussions with Apple in 2004, signed a license in late 2005 and we had no idea what it looked like until the announcement at MacWorld in January 2007, on the opening day of CES.
We took security just as seriously as Apple and said nothing about the product until it was announced with our name on the product licensing page on June 29, 2007. Leading up to MacWorld, a show that had some overlap with CES, we were never sure when or even if the iPhone would be announced that week. Furthermore, there was still some work in progress that made it impossible to know if Jobs would add the iPhone in one of his famous “One more thing…” lines at the end of his MacWorld keynote.
I was on the floor of CES when Jobs made the announcement and had to hop on the soonest available flight to MacWorld to see for myself, get pictures to our folks and talk to a few people involved in the project. We still wanted to know what we could and couldn’t say. While we knew the phone would have a big impact on the handset industry, none of us knew how big. We thought ten million units a year would be a home run. We never imagined over a billion devices.
It was inconceivable at the time, but within several years, Nokia, who once had the largest market share of handsets immediately began shrinking along with the other eventually become nothing. The big seven, Nokia, Samsung, LG, Motorola, Rim, Sony-Ericsson, and Palm were all decimated and about half died completely. Think of the disruption, layoffs, new hires, new software development, and all the angst that came with the announcement.
This is why I can’t stress enough, what happens in these announcements and at CES can change the entire world overnight and they impact everyone. For consumers, the iPhone changed how we thought of phones and how we got around. Remember MapQuest? The term “handset” almost completely disappeared from the normal terminology to be replaced by “smartphone.”
Even low-tech industries who didn’t think the phone would change their business soon discovered that how you message to a portable device would be different. Those who understood the impact had the upper hand in all industries.
It wasn’t just the shift in how phones were viewed as it also opened up thousands of software development companies and accessories at one point took up roughly half of north hall at CES.
When the iPad was announced April 3, 2010, Microsoft employees made fun of the product, called it the Maxi-Pad, and thought it was completely pointless. They completely missed the significance. Yet, in two years it obliterated a wide swath of devices making Microsoft look like complete fools for criticizing the product. The iPad almost completely wiped out the portable GPS, software maps, radios, book readers, laptops, sketch pads, photo displays, small portable monitors, video players, cameras, printed maps, printed charts, service manuals, magazines, entire book stores, keyboards, and countless specialized screen applications, all in one big swipe. It will happen again. While everyone was paying attention to the iPad and accessories at CES, the real story was what would be gone by CES 2012.
You can’t attend CES and simply pay attention to what’s revealed. You also have to pay attention to what just died as a result of the rapid change in technology direction.
Vibe
If I had to summarize CES with one word, I’d say it was “reset.” I felt like VR was a reset, I felt like participation of some familiar companies was in some form of reset. The general party atmosphere were not as extravagant as we saw in prior years. It felt much like CES 2008, before the market crash. By 2009 CES was down by a significant percent, with some booths completely empty. Technology seemed a bit less certain about where it was going.
There were no breakthrough devices that received star attention on a similar scale to Oculus and prior year’s drones as a category. Sony’s booth was toned down and we felt both Samsung and LG also spent less on glamor. There were no breakthroughs in TVs, 4K has been there before and we didn’t see any new devices that wowed us.
Qualcomm has now become one of the largest companies at CES and they seemed to be everywhere. That was noteworthy. Why? I believe it’s because they see smartphones reaching maturity and slower turnover in the future because of diminishing returns. Instead, we saw them in booths focused on robotics, autonomous automotive, VR, AR, drones, and other devices. While Qualcomm has always demonstrated products outside of the LTE world, there is definitely a shift and it’s worth paying close attention because it’s a good barometer of where they think consumers are going.
Wearable Technologies
I remain somewhat of a skeptic when I think of wearables because so many require a change in personal habits. This is hard. If it’s not adding convenience to our lives, chances are it won’t survive. The devices were endless, now filling a big section on one of the floors of the Sands Convention Center. This is a very promising category, but the devices have to do more to compete with the iWatch, and that’s where things get tricky.
The problem with wearable devices is that what you’re measuring often uses its novelty once you know your own body. Read your oxygen level a few times and once you stop seeing much change, you stop taking a reading. Ultimately, the more stable you are, the less likely you are to continue using the devices. If you’re training and need to measure improvement, then there is a daily use case, but otherwise it becomes pointless to constantly check.
What we did see that was interesting was the use of LED lights in commercial jackets that would allow wearers to signal intentions and directions by simply moving your arms. With low-power, yet very bright LEDs, the applications seem almost endless for active users, for everything from construction sites, bike rides, to search and rescue.
Drones
The novelty of drones wore off at CES 2017. It seems like every booth, even if in unrelated categories had something to show off, but they were not getting as much attention as in recent years. DJI[13] completely dominates the drone category followed by Parrot[14]. None of the others looked like they were capturing much market share by comparison. We saw far less dedicated booth space for drones than we did in 2016 and expect this trend to continue as fewer companies attempt to make a big splash at CES.
Parrot has demonstrated the value of coordinated swarming of drones in recent years and I think the software alone has some interesting applications not just military for also for search and rescue, and for agriculture applications such as crop management. Swarming allows the users to scan a huge area in a fraction of the time. A swarm fitted with FLIR cameras could easily cover massive amounts of space looking for stranded hikers or even wanted criminals.
Completely ignore human carrying drones. They are all a gimmick and nowhere near as close to as efficient as current helicopters. This is just show noise. I could list the technical challenges just to be on par with existing helicopters, not to mention the inability to safely autorotate in an emergency. If you want to know the specifics, just write me.
IoT
Over the last few years IoT (Internet of Things) has been a big buzzword and it was everywhere at CES. Yes, it’s coming but to consumers, it’s not a high-awareness part of their daily lives. While it will mean some convenience knowing from some remote location that your fridge is failing, however it’s not something where we sit around and immediately recognize the utility. I therefore think this will take a while to matter with consumers.
This will be an interesting category to watch because I think there will be a lot of weak use cases pushed at CES in 2018. At the same time, we are moving in a world where everything will eventually be connected for one reason or another. I compare IoT to the slow uptake in automated homes. While the products are demonstrated every year, consumers don’t have the time to think about building habits into their automation system. It’s hard for me to write a lighting scene for my house when it depends on who’s in the house and what season we’re in. Also, where and when and how I want to hear music depends on where I need to focus my attention.
I see some applications such as off-site garage door monitoring and control, it’s not practical for every-day garage door opening and closing because of latency issues. You will see it in just about everything else from security and lighting tied together to sprinkler systems and fire control. It’s as much an over-used buzz word as “smart ______” which is THE most overused term. What defines a smart device? Anything that has more than one use. A can opener often has a bottle opener, so technically, that qualifies as a smart device.
Apple Blew It!
Apple came out with their answer to Amazon’s Alexa earlier this year and it’s too little, way too late. While Apple often catches up, I’ve yet to get Siri to work as well as Alexa. Alexa is showing up in everything from cars to TVs and other devices with a much friendlier relationship with competitors. I think Apple’s arrogance in the CE space is going to catch up with them while Amazon, who’s often a retail partner comes off as less threatening, even though it could be far from the truth. Amazon is now what Apple once was under Steve Jobs. Tim Cook doesn’t even come close and lacks the vision of Jeff Bezos. There were far fewer references to Apple at CES this year and I think there will be far fewer in 2018. Even with the release of the iPhone X, Apple will still have supplier challenges that will limit uptake.
Automotive
Automotive has become a big part of CES, not because of the usual car stereos and navigation systems; all since wiped out by the iPhone and iPad. They are there because they think it’s great marketing if they show up at CES and talk about their technology, which is often years behind CES. Some of them recognize the threat of Tesla, not so much because of the brand as much as the way they adopt new technologies. Automotive is so far behind, it’s almost amusing. You will see countless displays in the automotive section that are like product demonstrations at CES five to ten years ago.
It’s as if automakers are not thinking of how they can produce the most innovative cars imaginable, but instead are thinking about what they have to do to remain competitive among others in the same price point and model. I never get the impression there is desire to produce cars with more leading-edge technologies because it’s fun, or interesting or because they can. I feel like it’s reactionary product development instead. Tesla, on the other hand seems to be a company willing to look at what’s available and pursue it with enthusiasm.
Automakers seem to fail at messaging every year at CES. Who gives a crap if your car has 38 sensors for collision avoidance. Where are you going and why? Ask inventors to help you! Actually, make the effort to get out at CES and see how technology is flowing and how quickly you can be combined with the same technology stream.
By the way, I saw nothing in the automotive section that wowed me. Honda did a demonstration of a seated balancing wheel called the Uni-Cub (b)[15] “Cooperative Mobility System” that was fun to watch. Honda has always understood CES and continually done the best job and connecting the event with where Honda is heading. The Uni-Cub and Uni-Cub (b) are perfect examples of how Honda sees where mobility is heading and how it plans to meet it with a solution.
The very nature of automotive is changing and I’m not sure automotive understands the full impact. I was sitting in my car at South Lake Union near Mercer and Dexter just watching the various modes of transportation roll by. Many of the problems cyclists dislike about hills are getting solved with the use of electric bikes that provide just enough power to completely neutralize the weight of the bike making them nearly effortless in the hilly streets of Seattle. I see more and more electric scooters, balance wheels, but never any classic Segways because of their own horrible image building. Yet, even with Segway, you see them in tour use along the same route.
Other transportation methods are coming and architects and planners need to think about where and how these vehicles will be stored. Electric bikes can be very heavy and will only get larger. Designers have to consider how these will spaces will be managed along with recharging stations for not just electric cars, but also all of these small transportation methods.
This will be one of the more fascinating categories at CES in the coming years. Hopefully automotive will embrace it somehow.
In Closing
This year I was given a ribbon on the bottom of my badge that said 10+ years attendance. It was the first time they did this at CES and I was surprised by the number of people who commented on the achievement. What was more surprising was that there were not more people at CES with attendee experience far surpassing mine. What it made me realize is that the CE industry moves at an extremely fast pace and it cycles people in and out of the industry just as fast.
It highlighted something about society that is noteworthy to me and that is the importance of not getting stuck and remaining relevant. If you’re at CES and older than 50, you’re a bit rare in tech circles. As I watch the masses head into Amazon to work each morning, I rarely see anyone who looks over 40. Tech has always discriminated against age, yet with some valid reasoning. People tend to get stuck and not change with new ideas and new technologies, forever applying old ideas from the past without realizing they are doing it. Yet, on the other side, I laugh when I see young companies making the same mistakes we made years ago without ever seeking any experience from those who have done it before.
As we grow older we tire of change, we desire for the world to slow down yet it doesn’t. Instead it does just the opposite. Human evolution isn’t in our biology as much as it is in what we produce and how we think. CES still remains one of the very few places in the world where you can see our human form of evolution first hand and to me it’s something that shouldn’t be missed. Forget about the TVs and the snappy looking electronics and instead notice how each of these new ideas impact how we do our daily work and how we interact not just with each other but how we experience our time on this planet.
[1] http://www.ces.tech/Why-CES/CES-by-the-Numbers
[2] http://www.ces.tech/CES/media/pdfs/CES-Audit.pdf
[4] https://www.sony.com/electronics/projector/vpl-vz1000es
[5] https://www.youtube.com/watch?v=iTNtTL08Og8
[6] http://westinghouseelectronics.com
[7] https://kodi.tv
[8] http://www.pcpitstop.com/ispChart/
[9] http://www.bbc.com/news/av/technology-38541533/ces-2017-clothes-folding-laundroid-robot-readies-for-launch
[10] https://www.sony.com/electronics/walkman/nw-wm1z
[11] https://first-flight.sony.com
[12] http://news.panasonic.com/global/presskits/ces2017/
[13] https://www.dji.com/products/drones
[14] https://www.parrot.com/us/drones#fly-and-film-an-adventure-with-your-drone
[15] http://world.honda.com/UNI-CUB/