1. Better and Cheaper Smartphones from Chinese Vendors:
Established and emerging Chinese vendors showed their determination to try to dominate the market for the world's most important consumer electronics product: the smartphone. After launching devices in the rest of Asia Pacific and parts of Europe last year, they are now expected to make a significant push into the highly competitive US market. Chinese entertainment company LeTV unveiled a major innovation at CES with the launch of the Le Max Pro, the first smartphone with Qualcomm's latest Snapdragon 820 processor and ultrasonic fingerprint technology. LeTV, which only started selling smartphones in China in 2015, has become the most innovative smartphone vendor at CES. This paves the way for its expected US launch in Q1 2016. The company is already selling 4K smart TVs in the US by invitation only. Huawei launched a phablet designed for the European market. Priced at €600, the Mate 8 is a dual-SIM 4G phone with a screen 6-inch screen, and an octa-core Kirin processor developed by the company; and a 16MP camera sensor. Huawei also revealed impressive results for its smartphone business: 108 million smartphones were sold in 2015 (+44% year-on-year), generating $20 billion in revenue (+70% year-on-year).
2. Specialization vs. Elegance: Competition in Wearables.
There are three positions in the smartwatch market: products that focus exclusively on activity and sports/gym tracking; multi-purpose watches that offer a wide variety of features and apps; and premium or luxury watches, where notifications and activity tracking are provided as discreet add-ons. The customer segment for each type of watch, based on its purpose, is relatively clear. Fitbit and Withings launched advanced versions of their activity trackers to compete with multi-purpose smartwatches from Apple, Samsung, and Huawei. In addition to focusing almost exclusively on activity tracking, as opposed to notifications and apps, battery life was also presented as a key differentiator. For example, the Withings Go watch battery lasts up to eight months. Smartwatch manufacturers are expanding into new categories to try to maintain sales growth in a market that remains niche (i.e., less than 10% adoption). Samsung and Huawei launched new versions of their latest smartwatch models, featuring more precious materials and premium designs.
3. Microsoft Resurges – Though Primarily in Tablets and 2-in-1 Devices.
Many Windows 10-based tablet models were launched at CES, including offerings from Dell, HP, Lenovo, and Samsung, primarily aimed at business users. The Samsung TabPro S was the most surprising announcement and is well-positioned to compete with the Microsoft Surface Pro 4 and Apple's iPad Pro throughout 2016. Worldwide tablet sales declined overall in 2015, but sales in the 2-in-1 segment increased, and many of the tablets launched at CES 2016 were 2-in-1 devices. Microsoft also shared some figures on Windows 10 adoption: There are 200 million monthly active Windows 10 devices, 40% of which were activated since November 25 (Black Friday). This equates to 11 billion hours of usage, including 44.5 million minutes in Microsoft Edge, 2.5 billion questions asked of Cortana, 82 billion photos viewed through the Photos app, and 4 billion hours of PC gaming. The data shows that Windows 10 is performing relatively well compared to the two previous versions of Windows, demonstrating that Microsoft is moving in the right direction. However, Windows 10 adoption on mobile phones is still very limited, with only Alcatel and Acer announcing new products at CES.
4. The Business Computers Users Want to See
The ongoing "consumerization" of business technology means that CES has become a major showcase for vendors in the enterprise market. Don't forget, business leaders, that employees are consumers too, and many are increasingly choosing to bring their own smartphones, tablets, and laptops to the workplace. Apple's MacBook Air, Microsoft Surface Pro, and Dell XPS 13 are just three examples of devices favored by the "Technorati," but what about the rest of us? Well, it seems Dell has realized that looks matter, as the company uses CES to announce a broad lineup of business devices, most of which offer enhanced design aesthetics to complement the security, manageability, and reliability features that are generally of primary interest to IT purchasing managers. In 2015, Microsoft partnered with Dell (and HP) to sell and support the Microsoft Surface Pro 3 in the North American corporate market, but with its new Latitude 12 7000, Dell believes it can offer a more attractive, lighter, and feature-rich device than Microsoft's Surface. Dell also claims that the Latitude 13 7000 Ultrabook series is the world's smallest 13-inch business PC, and that by using space-age materials like carbon fiber, the computer can withstand the demands of the business environment while maintaining an appealing design.
5. From More to Better Pixels: HDR Established in the Future of 4K.
LG, Samsung, and Sony lowered entry-level 4K prices by launching the technology into their lower-end product lines. High Dynamic Range (HDR) was front and center at CES, with major TV manufacturers offering HDR across all 4K TV models, including Chinese vendors like Hisense and TCL.
The UHD Alliance, a trade association of more than 35 companies including Dolby, LG, Netflix, Panasonic, and Samsung, agreed on a new standard and logo to capture HDR capability, called Ultra High Definition Premium. UHD and HDR standardization will have a significant impact on 4K TV adoption, as TVs without HDR capability will not be compatible with most 4K set-top boxes and pay-TV services. Furthermore, HDR significantly enhances the 4K experience, driving consumer purchase intent. For major TV manufacturers, 4K TV sales already account for more than 20% of their revenue. This percentage will increase rapidly as 4K will cascade to other models throughout 2016.
6. One UI to Rule Them All? Unified Search Comes to TV.
Several companies are offering solutions to one of modern television's biggest problems—too many choices. CES 2016 saw many new developments aimed at helping viewers search for and discover TV shows, movies, and other content across pay-TV broadcasts, streaming services, and OTT apps like Netflix. Time Warner Cable's app integration into LG WebOS 3.0 and Roku OS 7, along with Dish's new set-top box, the Hopper 4, were among the top demos at CES.
7. Automakers are moving toward a new kind of mobility…
Many automakers spoke of a new future for themselves as a key part of this shift to “mobility companies.” And, without a doubt, the connected car was the super-theme of CES 2016, along with autonomous vehicles. Autonomy was the focal point for every automaker at their press conferences, from mass-market brands like Ford, Toyota, and Kia to luxury brands like Audi and Mercedes. What is the connection between autonomy and mobility? Autonomous vehicles have the potential to democratize personal transportation, using both owned and shared vehicles, to a new level: for those who are too young or too old to have a driver's license.
But do consumers really want autonomous cars? Ironically, the question is debatable, since, in the words of a Ford representative, it is simply a case where, “in order to remain competitive, every automaker needs to have an autonomous driving strategy.”
8. ...while ties between Apple and Google strengthen,
industry support for apps that mirror smartphone screens on car head units has intensified, with Ford, Chrysler, and Mercedes all launching services related to Android Auto and Apple CarPlay integration: Ford Sync 3, Uconnect V4, and Mercedes's as-yet-unnamed head unit, respectively. No other manufacturer has announced products supporting MirrorLink, the open-source alternative to Android Auto and CarPlay; Volkswagen remains the only one with units available on the market. There's no room for doubt on paper about smartphone screen mirroring. Although all indications suggest that within five years even the most affordable mass-market vehicles will be built with dedicated modems, drivers will still carry their own mobile devices in vehicles and will need to use them safely.
9. Virtual and Augmented Reality Connect to the Internet of Things.
While virtual reality once again drew huge crowds to CES, with lines snaking around the outside of the Oculus booth, a slightly less publicized but no less interesting development is the integration of computer vision with connected devices. A key example was ThingWorx, which was present at the AT&T Developer Summit the day before CES, showcasing how the Vuforia augmented reality platform has been integrated into connected devices, such as bicycles, providing real-time data on function and positioning, among other information. The retail sector is another area where virtual reality and IoT are expected to converge, with connected VR or AR devices enabling point-of-sale purchases; MasterCard's Global CMO predicts this vision could become a reality within 5-7 years.
10. Netflix, Consumer Electronics, Content, and the Cloud:
The biggest announcement at CES wasn't about consumer electronics itself, but rather content and the cloud. But Netflix's decision to make its service available in 130 more countries, bringing the total to 190, will have a significant impact on device sales. Netflix has proven to be a "hero" service for subscription-based video on demand (SVOD), spurring adoption and competition almost everywhere it has launched. These benefits have trickled down to consumer electronics manufacturers, as consumers have purchased devices to enjoy the service on the new screens. LG showed how device makers can capitalize on Netflix's success more directly. The South Korean company said it will work with Netflix to offer prepaid access to the video streaming service, which could help attract new subscribers, especially in emerging markets where credit and debit card penetration is low. A less publicized but important development was LG's decision to add access to 50 streaming channels from brands like BuzzFeed, GQ, Wired, and Vogue to several of its new smart TVs. Expect more device vendors to promote digital video services from leading publishing brands as they continue to capture viewers' attention.
