Incrementalism, Environment-based Computing, Makers going Pro and Impending Trade Wars: 4 Big Themes from CES 2017
Last week, I attended the annual CES show in Las Vegas. Over 165,000 attendees from all over the world defended on 10 different venues on the Las Vegas strip. There was so much to take in over the three days I spent at CES, and it would be impossible to report on everything I saw, not to mention everything I missed. But as I’ve been going through all the materials I turning it all over in my mind since returning from the show, number of big picture trends have emerged:
1. An incremental period for electronics innovations
A decade ago, the iPhone, Kindle and the Wii were released. The iPhone changed the whole game, combining all the elements of communications and internet life in one beautifully designed device, ushering the ensuing age of the smart phone. The Kindle innovated on content delivery, giving you the ability to instantly download a book whenever you wanted one. Released at the end of 2016, The Wii reimagined gaming for everyone not just hardcore gamers. These were all big leaps forward in electronics innovations that immediately impacted millions of people upon their release.
A decade later, there really isn’t anything in the electronics space that represents the big leaps from years past. Apple’s iPhone and MacBook pro releases have been underwhelming. Intel’s Kaby Lake chip provides only marginal increases in performance as Moore’s law seems to have faded away (We seem to be in the era of the GPU vs the CPU). VR, despite all the hype, still seems like something consigned to the realm of amusements and attractions versus everyday use. As anyone who has suffered a sore neck from wearing a VR headset for more than 20 minutes can attest, there are still real barriers for VR.
The innovations that are occurring right now are in AI, and the companies creating the infrastructure for AI based applications, especially folks like Nvidia whose chips are increasingly powering real time AI applications like autonomous vehicles. But these innovations are not yet impacting people on a scale and impact compared to the innovations of 2007. How many people outside of Tesla owners have actually experienced a ride in an autonomous car?
So, with the absence of more breakthrough innovations, it’s perhaps not surprising that the humble LCD display was the star of the show. And while the gorgeous and increasingly thin OLED displays were eye-popping, it’s a perfect testament to the current incremental state of consumer electronics innovations.
2. Dawn of environment based computing
However, with the above said, there is one innovative product that is starting to make an impact on millions, and that is the Amazon Echo powered by Alexa. It just happened to be released two years ago. Amazon announced they had sold 5 millions Echos over the past two years and that Echo was their biggest seller this past holiday season.
This is a super interesting development because since 2007, it’s all been about mobile and touch interfaces. Ten years after the iPhone ushered in the smartphone age, the biggest hit product of 2017 is a device that sits stationary in people’s rooms, and has two buttons for a physical interface and no screen.
I attended many of the talks that Amazon put on, and there were long lines to attend. In their sessions, Amazon has pitched voice as the next leap in computer interface, following the heels of keyboards, mouse, and touch.
But if we zoom out, the bigger picture is that this is the dawn of environmental computing. Alexa, Google Assistant, Cortana, and even Siri are pointing to a future where computing and access to services will be embedded into our environment vs accessed by keyboard, mouse or touch.
With the iPhone, the developer ecosystem was field by creating and profiting from Apps. With Alexa, the developer ecosystem is in profiting from creating Alexa enabled device and services. With Amazon and Google having done the heavy lifting with speech to text, AI and text to speech in the cloud, we will see an explosion of voice enabled devices over the next year as computing becomes part of our environment.
3. Tools for makers continue to grow
Over the past decade, the tools to create electronic devices have grown immensely, heralding back to the days of Zenith electronics kits, but on steroids. The Audrino, RaspberryPi and all the other single board computers and micro controllers have ushered in an ever improving era for electronic makers. 3D printing has come down in price and printing reliably with materials like wood, metal, ceramics and even conductive has made industrial design and fab on the desktop.
But there was still one area that was holding makers back from going pro, and that was being able to quickly go from a breadboarded Audrino to a fully realized printed PCB circuit board.
Well, tucked into a booth in the Eureka Park startup area, a company called BotFactory (www.botfactory.co) is releasing their desktop PCB printer. This desktop printer is like a mini PCB factory that prints circuit traces, places glue or solder paste and performs pick-and-place of components. Essentially, this takes the iterative benefits we get with 3D printing for industrial design and replicates for electronics design.
This is a tremendous time for makers and as the efficacy of small runs becomes better and better, I think we are going to see the rise of craft electronics.
4. Trump’s trade war could seriously impact the electronics industry
While you see the glitz and glamor of CES from the media coverage, there’s actually a lot of business being conducted during the week of the show.
If you explored behind the rows of startup booths in the Eureka Park area, and the Westgate hotel’s convention area, you would see rows upon rows of Shenzhen based electronics manufacturers. You’d see areas for Korean and Taiwanese electronics manufacturers. These Asian companies make everything from cables to components, to bluetooth speakers, displays, and every other electronics based device you can think of.
Walking through the Westgate especially, you’d also see a lot buyers looking for goods to retail, from mom and pop audio shops, to the biggies like Target.
One of the more fascinating aspects of attending CES was being able to observe the whole supply chain of how electronics get created, manufactured, distributed and eventually end up in our homes, offices and pockets.
And it doesn’t take amazing powers of observation to understand that the cost structure of the entire industry is predicated on cheap manufacturing from Asian — mostly Chinese — companies.
So as Donald Trump raises the prospect of imposing 35% import taxes on imported goods from China, this has the potential to disrupt the electronics industry. A 35% tariff on products made in China will impact every part of the chain.
It will mean buyers will pay more, and therefore we will pay more for computers and TVs and will also impact the selection you have as brand manufacturers will likely limited the number of items they send to the US.
This will be interesting to watch unfold. The electronics supply chain, which we all take for granted in getting all these cool gadgets at a cost that we are willing to pay, will be a potential first casualty of Trump’s trade policies.