CCS Insight / Blog / CES 2018 Highlights: Tuesday, 9 January

CES 2018 Highlights: Tuesday, 9 January

Our Review of News from the Las Vegas Tech Show

Yesterday CES 2018 officially opened its doors. Here our analysts at the show reveal their picks from the first day of the tech gathering, including Ford’s vision for smart car and smart city projects, Intel’s big plans for the post-PC era, a new approach to the smart home space and more.

Ford Presents Vision for Future of Smart Cars and Cities

Ford presented a grand vision in its opening keynote session. We’ve previously said that the development of autonomous vehicles can’t happen in isolation from their surroundings, and must be designed and delivered in parallel with investment in smart city projects. Reassuringly, this was the central theme of Ford’s presentation, where it announced a partnership with Qualcomm and commitment to cellular vehicle-to-everything communication as the technology to connect its cars to everything around them (as opposed to the alternative in dedicated short-range communications).

An important part of this plan is Ford’s Transportation Mobility Cloud, an open platform and initiative co-developed with Autonomic to facilitate communication between various means of transport and their supporting services. This is a considerable investment and another example of an automotive company thinking and acting like a tech company. However, success will need widespread collaboration and similarly broad thinking about the role of autonomous cars within their surroundings. With industry focus rigidly on creating self-driving platforms, this development seems like it could be five years too soon.

Intel Unveils Bold Ambitions for Post-PC Future

Intel delivered a spectacular keynote presentation focused on how data lies at the heart of all the innovation, disruption, growth and value that technology will bring over the coming years. The session covered a huge range of areas including computer vision, artificial intelligence, big data, virtual reality, the future of content and film, quantum computing, autonomous driving and the future of flight.

Intel has talked extensively about becoming a data company, but this was the most comprehensive presentation of its vision. Critics will undoubtedly point to the company’s track record in executing on areas such as wearables and the maker community, which have formed large parts of Intel’s recent keynote speeches at CES. Nonetheless, for a company that has traditionally been risk-averse, this represents a hugely ambitious vision for its future.

Consumer Electronics Players Take More Agnostic Approach to Smart Home

We had the opportunity to visit the giant stands of some of the major consumer electronics companies to see how they were showcasing their products. Once again, smart home technology has been a hot topic at the event, but there’s an encouraging shift happening. Historically, companies have tended to offer demonstrations of all their own products linked together as their smart home solution. This year, there’s been a marked change, as companies show a mash-up of their products together with a wide range of third-party devices or platforms. The best example came from Samsung, which included products from Amazon, Arlo (Netgear), Google, Philips Hue, Ring and others.

Sony took a similar approach with companies such as Anova, August, iRobot, Nest, Philips Hue and Wemo.

We believe this is a very positive development that will help these big manufacturers make progress with their smart home offerings.

Smart Home Overload

Despite this positive news, we caution that the show is clearly illustrating the bewildering variety of smart home devices, which in many cases are duplicated several times by different manufacturers. In the giant smart home section of the show, there’s a mind-numbing overload of smart switches and sockets, light bulbs, cameras, movement sensors, thermostats and more.

This is compounded by the numerous different protocols and standards associated with these devices such as HomeKit, Thread, Z-Wave and ZigBee. On this basis, we believe that it’s becoming virtually impossible for consumers to choose the best solution for a fully integrated smart home offering. This is leading customers to adopt disparate options like Philips Hue for lighting, Ring for a doorbell and Nest for a smoke alarm, which will make long-term interoperability extremely challenging. In our view, gateways can only mask so much complexity, and such a fragmented range of products isn’t scalable for the mass market.

We fully expect a shake-out in the smart home device market in the coming years. The current levels of duplication and fragmentation can’t be sustained.

Baidu Announces Apollo 2.0 and Host of New Partners

The announcement of the Apollo 2.0 autonomous driving platform was one of the biggest news in the automotive sector at the show. The platform features a new, more-affordable sensor solution designed to help scale the market opportunity, along with support for reference designs including minibuses, SUVs and trucks. Most importantly, the update will enable autonomous driving on simple city roads. Baidu also introduced a host of new partners, including the four leading computing platforms for autonomous driving from Intel, Nvidia, NXP and Renesas Electronics.

Baidu also added TomTom’s live maps to the new version of its platform and emphasised that it will itself sell maps as a service. The company expects high-definition maps in China to become a bigger business for Baidu than search. With over 25 million new cars sold in China in 2017 and more than 90 partners now involved in Apollo, the platform is undoubtedly at the forefront of the self-driving opportunity in China.

Razer Prototype a Rare Highlight amid Little Smartphone News

In previous years, we’ve always been able to point to numerous smartphone-related developments at CES. This year, they’re few and far between. Visitors appear to be impressed by ZTE’s Axon M dual-screen folding phone, but this was announced in October 2017 and isn’t really news.

One notable highlight from the show, however, is a prototype from gaming hardware specialist Razer. The company has created a laptop-style accessory that its recently launched Razer phone slots into.

Unfortunately, as those familiar with the smartphone market will know, this isn’t an innovative idea. Motorola first tried this concept with its Lapdock back in 2011. Other companies have produced similar companion products over the years but none have been successful. However, Razer should be credited for making an interesting and attractive piece of hardware.

Drones Dazzle But Barriers Remain

DJI’s dominance in the drone market is palpable at the show, but questions are emerging about the long-term sustainability of the consumer and hobbyist market segment. It has become increasingly difficult to fly drones in public places owing to regulatory limitations on proximity to buildings and people as well as decisions to ban drones in parks, at public landmarks and other areas. It was notable that the US Federal Aviation Administration was present at the show, providing information on drone safety and compliance.

In GoPro’s announcement that it’s exiting the drone market, which happened to coincide with CES 2018, the company mentioned regulatory challenges limiting future market potential. Although there are broader reasons for its decision, it’s interesting that GoPro highlighted this angle. The fact that one of the companies at the event offers a “drone threat solution” points to questions about what effect drones will have on security.

Other barriers facing drone makers are the sheer number of businesses targeting this market. It seemed like there was a definite oversupply of companies in the space relative to the current market opportunity.

However, in contrast to our scepticism about consumer drones, we believe that opportunities in certain industry sectors enjoy a much more optimistic outlook. In this area, the biggest highlight at the show was Intel’s drone display above the famous fountains of the Bellagio hotel. At first glance this could be seen as a marketing gimmick, but there are in fact some highly convincing applications for fleets of drones, such as building surveys and inspections, search and rescue operations and mapping. We expect many more vertical market opportunities to continue to appear in areas such as construction, agriculture, security and more.

For more insights from our team in Las Vegas, follow @benwood, @geoffblaber and @george_ccs on Twitter.

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Posted on January 10, 2018
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