The slowdown in the world economy has taken its toll on the Consumer Electronics Show in Las Vegas, which was held 7-11 January. Visitors were sharply down (estimates vary between 20-30%), while some exhibitors had done last minute cancellations of their booth spaces, while others left early. The show lacked the big 'wow' announcements. but there were several developments for the telecoms and networked electronics markets.
The most interesting announcement was Palm's the proprietary mobile phone operating system 'Web OS' This is a welcoming refresh to Palm's business. It has struggled to find its position in the competitive and innovative handset and mobile phone operating system market. However, by bringing on board new owners and hiring former key Apple executives, Palm is taking the tack of becoming a consumer and software developer friendly mobile phone company. Palm will have to work hard to woe developers, as most advanced mobile phone operating systems provide third party application developers with low cost/free to use SDK/development tools so that these developers can create value for the respective operating systems. Keeping the Web OS proprietary could be another challenge. Open source based Nokia backed Symbian and Google driven Android aim to, alongside with the smaller Openmoko project (spin off from First International Computer), woe the whole eco-system of developers, content and service partners and handset vendors. Windows Mobile, although not open source, is entirely driven by third party handset vendors as Microsoft itself does not sell own branded phones. That leaves the proprietary and vertically integrated higher end markets to mainly Apple, and now Palm.
On the consumer electronics side there were further developments on networked electronics. Most vendors, sans Panasonic, showcased engineering samples of televisions using the Yahoo Widget Engine, which requires the Intel Media Processor. Vendors need to carefully evaluate the impacts of this platform and the need for the Media Processor. It is based on the Intel Architecture (IA), and thus Intel's x86 competitors can not manufacture compatible products. However, there are strengths to a 'defacto' industry standard for consumer electronics and web service delivery. Expect Yahoo/Intel to use these show case products for what it is worth to ensure that web developers choose the widget engine as the main platform for delivering web services to consumer electronics. The web services and consumer electronics markets are likely to be driven by the scale of vendors, developers and consumers on a given platform, where value creation will be networked based, and thus the smaller (and often proprietary) platforms will be driven out by the very nature of the market forces. Most vendors also hedged their bets by forming direct business relationships for networked TVs with companies such as Netflix and Amazon for video streaming/downloading services. Most announcements were for the US market only, so the rest of the world will probably have to sit out for now.
Another trait from this year's show was that consumer electronics vendors were cautious , but still willing to experiment to some degree in order to differentiate in the market.. There were few ground breaking announcements, while instead the vendors tested the waters for new means of creating differentiation. Eco-friendliness was a common theme, however the industry needs to be clever in its marketing of eco-friendliness (such as reduced power consumption of televisions), as many consumers vote with their pockets when going green and the industry therefore should find ways to estimate the life cycle power cost reductions of eco-friendly products. Actual cost savings is likely to be a stronger driver of being 'green' than a better conscience.
Engineering samples of 3D TVs were popular among the attendees. Although the technology has made progress in leaps and bounds, it has been talked about for many years and made little progress into the residential TV market. For 3D to make inroads into the living room there can be no need for viewing glasses (which most technologies depend upon), and there can be no need for proprietary content production needs. Perhaps there could be a market opportunity for Blu-ray Live to provide 3D upgrades/extensions over the web? 3D in the living room may not happen in the near future, however it could make inroads in (non-casual) gaming. In this market it is less likely to be an issue of not having enough viewing glasses since gaming is often a personal experience, if not shared with only one other person. Also, some gamers have fewer reservations about adopting new technology to have a better gaming experience.
Other experimental projects were flash on TVs (to support screen savers and wall paper-type effects), touch screen TVs, and touch screen/haptics based remote controls. There is no doubt that there is substantial potential in re-thinking remote controls and TV UIs. As more features are added to televisions, so are more buttons as well. This leads to a cluttered interface that is ready to be re-vamped. The question is whether the vendors are willing to move away from the low cost remote controls -but difficult to use- to e.g. more expensive touch screen based remotes. The willingness to significantly increase the cost of certain components, however, should be limited in the coming year given the ailing financial situation for many vendors and with continued soft consumer spending.
With the world economy clearly impacting CES -with the industry has shown greater constraints on spending and exposure to new markets- it will be interesting to see what the situation will be for CES 2010. We remain pessimistic.
