January 14, 2014
The madness that is the Consumer Electronics Show (CES) has finally subsided, people are safely home (some never arrived thanks to cancelled flights), and we’ve had sufficient time to read the CES stars and foretell what it means for 2014 and beyond. Condensing this show down to so few points requires omitting some things, even some fun things like Michael Bay’s meltdown and T-Mobile CEO John Legere’s attention-grabbing tactics, but it’s my job to say what it means. So here I go, predicting what will happen in 2014 with three (admittedly long) bullets:
- Wearables will give birth to a second mainstream subcategory: smart watches. The wearable category is hot, with Vuzix’s Google-Glass-like M100, LG’s fitness band with Bluetooth blood-pressure-sensing earbuds, and FiLIP’s kid-tracking wrist watch, demonstrating the range and reach of this trend. The first of these subcategories to flourish — the fitness tracker — broke out in 2013 thanks to the Nike Fuel Band. But the overall category is still muddy as devices either specialize in point solutions like the LUMOback anti-slouching monitor or overlap, as is the case with the fitness bands that double as smart watches. This year will see the separation of the smart watch as a viable mainstream subcategory. It’s the easiest thing for consumers to add to their lives; it perfectly blends people’s existing understanding of both the smartphone and the watch, and dozens of companies will deliver smart watches this year. Ones to watch: Samsung’s Galaxy Gear (the microphone makes it potentially very powerful), the Pebble (it launched a more fashionable Steel edition and its app store launches in just weeks — Pandora on the Pebble will be a dream), MetaWatch Frame (its design credibility and the open-source approach to development should accelerate its trajectory), and whatever Apple chooses to do later this year.
- The TV business remains desperate. Curved TVs? CES might have been a glorious curvapalooza, except for one problem: Nobody really asked for curved TVs. Don’t get me wrong; they are beautiful — like hothouse flowers are beautiful, but impractical. Especially at these prices. Making them more expensive by making them bendable, as Samsung did, is clever, but it's not going to solve the problem. In the end, all this is: The TV makers are desperate. They had a terrible 2013, with the total units shipped around the globe dropping significantly. Despite the falling number, 2014 will see a tremendous investment from Chinese manufacturers eager to pick up the slack left over by the Japanese manufacturers who are falling into shadow. Hisense even bought up the pricey real estate in the CES Central Hall that was historically Microsoft’s where it demoed the same 4K TVs, curved screens, and smart TVs that everyone else had on display. The Chinese are investing a lot to get into the crucial US market, and I predict it will work. Oh, and on that 4K thing . . . I said it last year, and I’ll say it again: People do not need this. But unlike 3D, which people did not need and most will probably never have, 4K is something we will all eventually own, mostly because in the next few years you won’t be able to buy a TV of a lower resolution. It's a supply-side thing.
- The digital home will finally mean something specific. In 2007, Motorola had a division called Digital Home or something like it, a division the company disbanded and reintegrated into another division because there was no agreement about what the digital home meant, and whatever it was, it wasn’t happening yet anyway. The wait is over; the digital home is finally here. But it has nothing to do with home media servers and networked audio solutions as some originally imagined. That stuff has all happened organically, sometimes referred to as the digital living room. The digitial home, however, is turning out to be more about home sensing, control, and automation. That’s where the relative newcomers like Nest (just acquired by Google for more than $3 billion, not incidentally) and even longtimers like Schlage and Kwikset are rapidly lining up products to give people app-based control of their physical environments. And make no mistake; without the smartphone to make this both cool and easy, this would not be happening. Keep an eye on SmartThings, the kickstarter-funded company that has come from behind to disrupt the subscription-based models of most home automation and security vendors that are hoping desperately to preserve the lucrative ADT model. Also note the considerable interest in the category on the part of Lowe’s, Home Depot, and even Wal-Mart. They don’t want to miss this opportunity the way that Best Buy and Borders missed the digitization of their categories, which will be fine until Amazon.com decides to clinch this category by making home automation a free service of Amazon Prime.
The embedded TouchCast of my CES 2014 summary lets me go into a few interesting details on these three points and is worth a watch as well as a share.
There’s more to say, including a big-picture discussion of why even though the major platforms like Apple, Amazon, Google, and Microsoft were practically absent from CES, the whole world of consumer technology depends on them and tries to imitate them (LG’s webOS, for example). I’ll be writing a short report explaining what this means for Forrester clients over the coming weeks, so stay tuned (and if you’re not a client, <plug>consider becoming one</plug>). As a further resource in the meantime, everything I said about CES 2013 still stands from last year. It’s worth a read if you want even more context for what’s happening in consumer electronics.