72 Hours at CES

January 7th – 9th I was lucky enough to travel to Las Vegas to attend the annual technology trade show CES (Consumer Electronics Show). Although my time spent attending CES events and walking the floor was limited, my experience got me thinking about the current state of the technology industry. With the halls of CES fresh in my mind, I would like to outline and critique trends I see driving new technologies.

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Much has already been written about the trends at CES this year – seen herehere, and here. I have picked three of the most relevant to the future and summarized them below. In order to add my voice to the fray, I have also included a short critique that asks and answers questions for what each trend may be missing or how it might be evolving down the line. 

1) Internet of Things Is Here… and Finally Functional 

The IoT is broadly defined as the growing trend of everyday objects having network connectivity. In practice, it means products of all kind having the ability to be controlled, personalized, programmed etc. by the user wirelessly. IoT has become something of a “catchphrase” in the tech industry with players of all shapes and sizes trying to get a piece of the action. As of CES 2015, many of the products going to market lacked enough functionality to justify their steep costs. In particular, products such as the original iteration of the Phillips Hue come to mind that cost upwards of $200 for a central hub and single “connected” light bulb that could be controlled with a smartphone. 

At CES 2016, however, the IoT arrived in a more functional way. There are now products like the Natatmo security camera that uses adaptive technologies to recognize people, pets, and cars around a person’s home – with all relevant insights pushed immediately to a user’s smartphone. While the price tag on such a product (TBD) will predictably be quite high, it represents a move towards offering valuable functionality attractive to a wider audience. Traditional home appliances are also seeing disruptive transformation from the IoT. For example, the Samsung Family Hub Fridge has a 1080p touch screen on the front door that can be used to take notes (i.e. assemble grocery lists), access internal cameras to view current supplies and order new food directly. Such features can only be powered and made truly useful by the transformative functionality of network connectivity in every day devices. 

Critique: Yes, the IoT has come a long way since it was first conceptualized circa 2013. Most products with connected functionality, however, still remain prohibitively expensive or insufficiently functional. In order for IoT products to become mainstream, they must either become significantly more functional (and thereby augment their perceived “worth” by consumers) OR dramatically reduce their costs. All indicators point towards a mixed 2016 in this regard. Products like Edwin the Duck, a $99 “connected” rubber ducky, fail both of these tests of feasibility and suggests consumers may still encounter some disappointing applications of the IoT in the near future. 

2) Virtual Reality 

Starting with Mark Zuckerberg’s purchase of Oculus in 2014 for $2 billion, there has been a race to develop virtual reality products. When most people think of virtual reality, their minds gravitate towards gaming. Granted, many of virtual reality’s frontier applications have been in the video gaming world. However, this year at CES it became clear that some of virtual reality’s most exciting applications lie far beyond the relatively narrow reaches of the gaming industry. Walking around CES, I was amazed at the prospect of using virtual reality for immersive shopping experiences, the opportunity to experience events around the world as if you were actually there through “virtual tickets,” and so many more. CES 2016 made the relevance and transformative implications of virtual reality clear to industries across the board. I anticipate the question; “What is our virtual reality strategy?” is being asked in boardrooms across America. 

Critique: To virtual reality, I ask the question; is what’s coming what people actually want? Consumer demand for virtual reality, as of present, is a big black box. With no mass market products and limited functionality or applications in place, consumer preferences remain largely unknown. Technology leaders, media giants and the like are beginning to understand the potential of virtual reality for their perspective businesses. However, such future potential can be deceptive in its simplicity. While interest in virtual reality will no doubt continue to grow throughout 2016, I caution that there is a huge set of unknowns regarding how consumers will respond to such a transformative technology. These uncertainties make it unclear which of the main VR applications will survive to CES 2017.

3) Health Wearables and the Drones Craze

Connected health devices and consumer drones have experienced tremendous growth in the past two years. There are more than 1 million consumer drones now operating in the US. Initially only a product of hobbyists, drones now have significantly improved functionality and more reasonable price points. On the side of health wearables, FitBit continues to dominate the market with other players such as Apple, Jawbone, and Samsung earning slices of demand. The functionality that has come to define health wearables, namely fitness tracking, companion apps, health diagnostics, etc. has become mainstream and relatively uniform.  

Critique: I lumped these two trends together because they share one distinguishing trait; absolute ubiquity and oversaturation at CES. Across the CES floor, I counted a huge number of drones and wearable companies all pitching some variation of a similar operating product. While the “name-brands” listed above continue to try to innovate to bring new users into the wearable market, there is stiff competition for the consumers of such products. If the functionality remains constant and only styles/product forms superficially change, the consumer market for such products will fail to grow significantly with time. A perfect example of this discouraging possibility can be seen in FitBit’s new smartwatch (FitBit Blaze), a product that offers limited additional functionality compared to others on the market and bears a striking resemblance to the Apple Watch. In order for wearables to make the next leap into wider adoption, there must be a more compelling set of innovative features. 

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I think there’s one huge trend that many people have been missing when discussing what’s next in technology. In order to air on the side of brevity, I am going to launch into that discussion next week. My next post will jump into the world of artificial intelligence and discuss how AI will transform how we interact with and find value in our technology products. 

All the best, 

Scotty

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I grew up in a small town called Orinda, about 20 minutes to the East of San Francisco. Naturally curious, eager to learn, intuitively organized and empathically geared – I strive to make conscious decisions to drive impact. My mind never stops working. Whether in the classroom, professional environments, volunteering capacities or personal hobbies, I enjoy thinking critically about my surroundings and problem solving to find solutions.

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