CES is underway in Las Vegas. What used to be called the Consumer Electronics Show but now goes by the less modest appellation of “CES 2020, the world’s largest and most influential technology event” kicked off this weekend with pre-show and preview events. Today is press day and the show floor opens tomorrow.
From a product perspective, the consumer electronics technology industry is collapsing into a handful of all purpose products – smart phones, cars, and computers and big screens of one sort or another. That list will grow this year as wearables become full featured hardware platforms that can support complete ecosystems of apps, services and content.
The wearables market is about form factor, not specific device function. That’s true whether it’s smart watches, fitness trackers, sleep monitors or something else. Smart phones are networked, handheld computers that are a convenient parking spot for any app, sensor or content that you can imagine. It’s an accident of history that we call them phones. Similarly, what we’ll end up calling a smart watch will just be a wrist-mounted platform for whatever can conveniently ride on it. I’m seeing fewer and fewer Fitbits and other dedicated fitness wearables on people, and more and more Apple watches, which are often used for step counting and other fitness tracking purposes.
Batteries are the major limiting factor inhibiting the collapse of everything into a single smart watch. There are two problems: battery life and recharging. So far I haven’t found a smart watch that can operate with everything running, including GPS, for more than about eight hours straight. That’s inconvenient for people who just want to put it on in the morning and let it do its thing all day long. It’s a deal killer for people who need that level of functionality for long durations – cyclists, hikers, triathletes for example. Recharging requires users to take the watch off once or twice a day and leave it somewhere to charge. That can limit its usefulness as a sleep monitor, for example. It is also a lot more fussy than we’re used to being about our watches.
But there’s a potential solution to both problems. If someone can figure out a system for wirelessly recharging smart watches with ambient energy, it’ll be a game changer. At that point, it won’t be just fitness trackers that collapse into smart watches, but also many smart phone functions as well. Maybe a low level magnetic field on keyboards, steering wheels, handlebars or anything else that’s regularly near your wrist for more than a few minutes a day?
For Fitbit, snapping up Pebble removes a real competitor in its segments, but for Pebble, it will rue the day that the company apparently turned down a $740m takeover bid from Citizen – the Japanese watchmaker.
With the buy, Fitbit gains access to a team that designed the Kickstarter success, which saw Pebble raise around $30m from backers looking to snap up one of its designs. Pebble has turned its attention to activity tracking in recent quarters, expanding on its initial focus on notifications, although it appears that its heart-rate monitoring is not as accurate as it should be.
According to IDC figures quoted in the ReThink article, FitBit is doing okay, shipping 5.4 million gizmos in the third quarter of this year, blowing Apple out of the water – Apple Watch shipments crashed to 1.1 million units, about 5% of the market, in the third quarter, a huge year-on-year decline from 3.9 million and an 18% market share.
The current generation of smart watches and operating systems have overcome many of the early problems with battery life and limited functionality. The real problem is the lack of killer apps. Vertical apps like activity trackers and heart rate monitors fit really well into cheaper, one trick pony devices, as FitBit’s increasing sales figures show. And the all-in-one crown still belongs to smart phones. The gap between the two categories is closing, and in the process squeezing out smart watches.
All the major manufacturers had a range of 4K televisions at CES this year, giving credence to the Consumer Electronics Association’s (CEA) prediction of 4 million sets sold in the U.S. in 2015, with price points dropping below $1,000. No significant 4K content announcements, and DISH was the only company pumping up the volume on the distribution side.
New wearables were everywhere, but the theme seemed to be me too. There wasn’t much to differentiate between the dozens of fitness trackers and smart watches on display. Most of the action came from small start-ups and mid-sized companies that have a history in the space – think Garmin or Polar. That means plenty of opportunity and incentive for the big CE companies to acquire talent and technology if they decide to get into wearables in a serious way.
It was a similar story for home automation. Lots of new products, but little coherence.
CEA was successful in attracting more entrepreneurs to the show. The number of exhibitors in the Eureka Park section grew to 375, from 220 last year, and it moved from a backwater in the Venetian hotel to front and center in the Sands convention center. It’s a clear winner. C Space – a venue pitched to content-oriented companies – was not. It was buried in the Aria hotel, far away from the rest of the CES action. No crowds and little buzz there.
CES is crowded – that’s the whole point of the show – but the 170,000 reported attendees and 3,600 exhibitors were easily accommodated. Only major glitch I encountered was the show’s mobile app – not ready for primetime. All in all, it’s a good start to 2015.
The 2015 Consumer Electronics Show will be about networked wristbands and coffee pots, if CES Unveiled – the opening press group grope – is anything to judge by. Wearables and home automation – products that lived in a geek ghetto only a couple of years ago – are the hot new categories this year.
Contenders in the wearable fitness tracker category seem to be following a common path: cram some sensors and a Bluetooth module into a sleek looking wristband, write iOS and Android apps to talk to it, then beef it up with some server-side analysis. It’s too early in the show – pre-show, actually – to know which ones are potential champs, but if tonight’s hopefuls are any indication, the winners will be determined by branding and distribution, and not by unique features and functionality.
Tomorrow is when the big boys come out and play. Samsung, LG, Panasonic, Sony and the rest will have their media extravaganzas, and one thing I’ll be looking for is whether they’ve decided to go large on wearables.
I say seems because it often take several minutes of cross examination and an escalation from the public relations rep to the designated techie to wring an admission that the control loop involves a trip to the company’s servers. And there were just too damn many to drill down that far on all of them. But at least a couple – Kwikset’s Kevo line and Smarter’s WiFi enabled kettles and coffee makers – are making a direct connection.
From the consumer’s point of view, there’s no big picture, just a collection of apps on your smart phone screen that control appliances, locks, lights, whatever. Which looks to be consolidation enough for most people.
The leader in the one-hub-to-rule-them-all derby – Lowes – was promoting the virtual reality shopping system developed by its Innovation Lab and not the Iris home automation platform. It doesn’t necessarily mean they’re pulling back on the concept, but it’s an interesting question to follow up on later in the week.
I don’t see any Wow! factor. The smart phones are standard, high-end Android devices and the smart watch seems more or less in line with Samsung’s Gear, although the fact that it can be used with any late model Android device (or so they say) and is a hundred bucks cheaper is a competitive advantage.
Sony can survive just fine in the sub–5% mobile market share club. Unlike Blackberry or Nokia (or Apple, for that matter), Sony is a diversified consumer electronics and digital content company. Like LG, it has a relatively small market share across a wide range of products, sectors and industries. Its competitive advantage is its brand. The joke in the consumer electronics industry used to be: what’s Sony worth? 50 bucks per letter.
That was twenty years ago. Back then, Sony could command a $200 premium on mainstream CE products like televisions and satellite receivers, just on the strength of the brand, which was built on a reputation for quality and innovation. These days, Sony isn’t innovating as much and although its quality is still among the best, the membership in that top group has expanded considerably.
Sony’s strategic positioning is against Samsung across a wide range of product lines, of which mobile phones are just one. Unlike major computer and tech companies, like, say, HP, Dell and Microsoft, it’s known all along that it needs to be in the mobile sector and has hung in through thick and thin. Today’s product announcements are more than enough to keep Sony in the game for the coming months.