CES 2019 Observations

January 15, 2019

The first of the grand slam tech events kicked-off the year in Las Vegas last week. There was a fair amount of buzz about automotive, 5G, AI, IoT prior to the event. As the biggest gadget show on the planet, it brings together all sorts of players from around the globe under one umbrella. Despite the inability of the city to handle traffic and congestion, it is well worth your time to walk the show floor to gain insights from the chatter, marketing pitches, and unconfirmed rumors. This note presents our observations from CES.

• The star of the show was clearly LG’s remarkable foldable TV (and it is coming to the market in 2019). I found their booth to be also the highlight of the show with 260 55” curved TV screens, booth was a feast for the eyes as they displayed stunning imagery and transformed you into a different world. Truly remarkable.
• Not to be completely outdone, Samsung showed its line of 8K TV sets. Sony, TCL, Hisense also had their versions of the gadget.
• CTA in partnership with Chetan Sharma Consulting released a paper on “5G US Market Impact” a first look at what can be expected from 5G in the US in the coming months and years.
• Ginni Rometty, CEO of IBM probably delivered the best keynote of this year’s CES (and didn’t even mention 5G).
• Google and Amazon were all over voice-enabling the gadgets. Google with its banners around the city, the experiential ride, human bunnies, and more marketing budget might have taken the limelight away from its rival.
• Apple made its presence known with an in-your-face billboard on data privacy and by announcing its deals with OEMs to expand its music and content offerings indicating a strong push into services in 2019.
• Lot of the 5G noise was outside the show in the press releases. Remember, last year, we said, 5G is going to be about the race for the 5G icon. As expected, inspired by history, the marketing tussles are out in the open and are only going to get intense. At CES itself, there was not much on the show floor related to 5G, nothing substantial on devices or infrastructure, the panel discussions were subdued and uninformative. However, during the keynotes, there were several noteworthy announcements. Also, Qualcomm indicated 30+ 5G handsets in 2019.
• As we suggested before, 5G is most likely going to be an enterprise-driven network cycle. Thus, it was heartening to see Hans Vestberg, CEO of Verizon to devote almost entirety of his keynote on various enterprise scenarios and partnerships. I thought 5G initiatives around journalism (with New York Times), healthcare, media, drones, and logistics were meaningful. Similarly, AT&T’s John Donovan talked about 5G Hospitals and 5G Stadiums.
• Samsung had a 5G prototype handset boxed in a glass enclosure. Royale beat Samsung to the display of a foldable handset, but it was clumsy at best. The new form factor holds promise and given what LG has been able to do with TV, we could see some really interesting possibilities in the coming days.
• There were a lot of robots running around the show floor and keynotes but I would say Pepper at our Mobile Future Forward summit last year outperformed them all J
• I had the opportunity to host a 5G session on the impact on vertical industries with Intel, Cleveland Clinic, and 5G Americas. One of the advantages of having a real physician on the panel is that you can start to connect the dots from capability to implementation and get the feel for the work that is needed to make 5G successful and how verticals can start working on new areas and emerging technologies to shape the workflow and supply chain for the better. We have a series of research papers coming out this year so stay tuned.
• I have been expanding on my Connected Intelligence thesis to quantify disruption in the next decade. We presented some of the preliminary thoughts at last year’s Mobile Future Forward. I used that to setup the stage for 5G discussion and will be working more this year to understand the trajectory of disruption in a multi-dimensional environment.
• To give you an example of interaction between the various technologies. A physician suggested that by overlaying VR Image over an actual brain that is being operated upon, there could be reduction in the 40% errors that result from guess-work based catheter incisions. I would say, it is a winner.
• Privacy and Trust was central to most of the discussions from automotive to social media, consumer brands to fleet management, however, without regulatory oversight, there is no consensus on what data privacy and trust even means. If we are going to be serious about it either in self-governance or regulations, we as an industry need to step-up our game and give a hard look at what kind of roadmap we want to prepare for the next decade. My friend Shelly Palmer devoted his entire event around the “Trust” theme. We need more active conversations from all parties involved.
• From the show, you wouldn’t know there are geopolitical tensions related to IP-theft and espionage. While Chinese employees and executives have been arrested in Poland and Canada, Chinese OEMs like Huawei, HiSense, ChangHong, Haier, TCL, CNC, and others had big booths to showcase their wares and roadmaps. In addition, there was a big startup and university contingent trying to break-in into the market though the total number of Chinese companies at the show declined. This year might define the contours of how future collaboration and trade might occur between China and the West.
• IBM unveiled its Quantum Computer Q System which didn’t make much splash beyond the geeks but is likely to have a bigger impact in the coming decade.
• IBM and Walmart are using Blockchain for Food security and have cut down a 7-day process down to 2.2 seconds. Yes, you read it right.
• Just like how there are 50 shades of 5G, AI definitions keep evolving – a new one introduced by IBM – “broad AI” not to be confused with “Narrow AI” or “General AI.” Only 1% of the data that is produced is captured and analyzed. How do we get better at turning this data into knowledge? Lots of innovation to come in the next decade trying to address this architectural question. But companies running around with Excel spreadsheets and claiming to be AI-centric, please, Stop!
• Data is central to most technological progress. Delta used data to reduce flight cancellations by 99% in one year. Fingernail sensors could predict early onset of Alzheimer’s disease years before and hypokalemia hours before it happens. Similarly, a more precise weather data can help avoid unexpected turbulence in air that can result in injuries.
• IoT was everywhere from the useful, to the mundane, to downright useless waste – some highlights: an autonomous luggage for the times when you want to eat burrito with one hand and drink tequila with the other, a self-cleaning toilet for cats, well, why not?, Machine to bake your bread or do your laundry, snuggling robots, Alexa-enabled immersive toilets.
• There was a lot of news on the automotive front. CES has become the Vegas Auto Show. Ford announced its commitment to CV2X, there were some really cool concept vehicles that can drive around autonomously (though they all looked the same, is our imagination limited to four wheels and four seats around a table?). Even Allstate was touting tech products for autonomous but perhaps my best insights in the segment came from Aptiv which is building the platform and system for managing data and operations within the vehicle as well as interaction with the outside world. The insights derived from data were particularly interesting especially movement data. They have been running several fleets in different cities. The precision in data analysis will be quite beneficial to multiple constituencies.
• The Auto OEMs and the Mobile Operators are talking past each other and they are not on the same page. It will be beneficial for both the segments to have a more substantive discussion around the requirements and levelling of expectations and roadmap around networks, capabilities, and business models.
• Bell’s AirTaxi created a fair amount of buzz but that thing is big and ugly, almost like a helicopter. I saw a better design from Lilium in Munich last year. I am optimistic however about the possibilities once some of the technical and regulatory hurdles are overcome.
• The biggest buzz and the most energy was in the Eureka Park with 1200+ startups vying for attention. I must admit despite spending a fair amount of time in the exhibit area, it was hard to pick companies who are likely to make a difference, there was too much similarity in solutions, too much noise and not an effective way to navigate but the exhibit did indicate the tremendous amount of optimism and promise of the coming days.
• Every company is a tech company. Just like our Connected Intelligence thesis postulates, the CI-led world forces companies to become more savvy with tech. Few years back, no one would have imagined Allstate, Energizer, P&G, Furion (ship builder had a massive yacht on display), and John Deere to be at the show.
• There was a lot of talk about “Techlash” and the solutions to deal with it. One thing that concerns me is the lazy debate about breaking up the companies without understanding why and the implications. Policy makers haven’t even formulated a framework that can help them answer these tough questions for e.g. how would you measure competitive intensity in this digital environment when there are no longer straight-line value-chains? This was one of the primary reasons that DOJ lost in the AT&T trial, they didn’t have a theoretical basis for their arguments. We have proposed a 4^th Wave Index way of thinking to measure the strengths of “all” players not just a few to really understand if certain players are getting too strong or if a merger will lead to dampening of competition. It is high-time, we upgrade our policy frameworks for the modern digital age or else it will lead to market failures, evidence of which are starting to build up in front of our eyes. Despite the obvious issues that the policy makers have to tackle, they can’t be handled in a haphazard way without developing a consistent framework for evaluating digital issues. That’s why we have proposed the formation of a new Federal Digital Commission to bring policy making into the 21^st century.

Next – the mobile-heavyweight Mobile World Congress in Barcelona. 5G is expected to be centerstage to all conversations. See you there.

Have a successful 2019.

Best wishes,

Chetan

We will be keeping a close eye on the trends in the wireless data sector in our blog, twitter feeds, and future research. The next US Wireless Data Market update will be released in Feb 2019.

Disclaimer: Some of the companies mentioned in this update are our clients.