CES 2019: Where Does LatAm Stand

Looking at the CES trends through the lens of the LatAm region

Co-written by Florencia Crosta, Santiago Garces , and Felipe Kopaitic

CES 2019 has come to an end. Throughout the week, the exhibitors showcased technologies that will not only shape our future but that’s already having a great impact now. These technological advances will gradually roll out through the entire globe, but we need to consider the specific nuances of each region to have a clear understanding of how and when they will come into play.

For Latin America, we will most likely be able to enjoy in a near future the benefits of software and cloud-based products/services that don’t require intensive infrastructure or hardware investments. The main reason for that is because historically, Latin America is not a place where tech companies try out new technologies, but rather where they launch them once they prove successful in other parts of the world (typically US or Europe).

Moreover, according to a study done by the World Bank: “smartphones and tablets in some countries in the region are the most expensive in the world. Tariffs and taxes on technology may be holding back per capita GDP growth”¹, which means that it’s not feasible for most markets in the LatAm region to adopt new hardware as fast as other parts of the world. Therefore, we expect software and cloud-based innovations hitting the market quickly while hardware having a longer adoption time in Latin America.

Now that we have a better picture of where Latin America’s stands in terms of technology adoptions, it’s clear that one the main topics of CES 2019, 5G connectivity, won’t be a reality any time soon, as 5G is estimated to reach LatAm markets around the mid-2020’s. It is likely that we will have a “soft launch” as network providers opt to call anything that‘s fast than the existing 4G network 5G, using confusing concepts like “4.5G” and “5G lite.” But that will simply be marketing stunts similar to the controversial “5GE” rebranding that AT&T rolled out last week.

Another big trend coming out of CES this year is the peaking of AI assistants, which are seemingly everywhere and being integrated with all sorts of made by various device manufacturers. The market continues to consolidate as most manufacturers have dropped the idea of creating their own voice platforms and decided to jump on either the Alexa or Google bandwagon, or both.

For Latin America, we see fertile ground for Google to dominate early with their Assistant, given that Android penetration is over 70% in the region. Amazon and Apple have struggled to achieve higher penetration in terms of hardware, which does not lend well to their respective voice assistants. LatAm consumers will enjoy the benefits of the voice assistants first through their phones, which will then hopefully drive the adoption of voice-enabled hardware such as the Google Home once they launch in the region.

Today, most of LatAm consumers who own voice-enabled hardware bought one as a novelty when traveling abroad, but as the voice assistants on mobile devices start to receive more usage, it could translate into other voice-enabled hardware. This means that Google has an open road to make a hardware play and dominate the region, but it cannot wait too long. If Amazon makes a push for the LatAm markets, consumers may seek novelty and flock to Alexa.

This novelty-seeking trait of Latin American consumers could be unhelpful when it comes to securing our privacy and protecting our data, as we are keen to deliver on a silver plate our information or trade off our attention for free services.

As the U.S. companies face the “techlash” and regulatory scrutiny after GDPR went into effect in Europe, in Latin America, the discussion around technology and privacy regulations is still barely beginning. Even though public trust has been in decline towards big tech companies and their data collection practices, it has yet to reach a boiling point to trigger regulation on LatAm markets.

But Latinos are quick adopters, and regulations might be fast-tracked into effect in order to protect local companies from global entrants. While labor protection law is strong and unions still hold power in the region, technologies that displace workers will soon hit the market, thus prompting countering regulations. But for now, self-regulation is the status quo, and we believe that global companies should act with the same ethical principles across the world and not take advantage of less regulated markets, lest they risk turning consumer sentiment against them and trigger regulatory sanctions.

CES 2019 ended with a feeling that the privacy discussion did not happen as strongly as it perhaps should, but it has also left us with a positive feeling towards the future which will bring great things such as AI-powered smart home, advancements in do-it-yourself medicine and elderly care, new technologies for children’s education and tech skills development, and a lot of new entertainment options.

Many of these new inventions that will shape our future are 5G-dependant and we foresee a wealth of new possibilities in the LatAm region when the network infrastructure gets revamped. As we couldn’t have thought of on-demand ride sharing, consumer-facing drones, or voice assistants in the 3G era because they depend on a stronger 4G network, we will see a lot of innovation on the 5G era that will seem as surprising as the examples mentioned before were.

Footnote:

[1] The World Bank, Embracing Technology is key for the jobs of tomorrow in Latin America and the Caribbean, April 10, 2018.