CES 2014 Preview: Disruptive Trends and What They Mean
Is the smart watch poised to be the biggest game changers since the iPhone? And will 4K entice consumers to invest in new televisions?
There will be plenty of disruptive technology at this year’s International CES, signaling new ways to create and distribute entertainment -- and how and where consumers will experience it.
Key trends include 4K, wearable technology (from Google Glass to smart watches) and connected cars, along with cloud services (for everything from production to distribution) and the so-called Internet of Things -- effectively the connecting of all devices.
Here’s a closer look at three of these trends.
Ultra HD - And will 4K be enough to entice consumers?
Representing four times the resolution of today’s HDTVs, 4K, or Ultra HD, will be one of the biggest stories coming out of CES. Expect to see Ultra HD TVs of all sizes (as well as with curved screens) from major set makers, as well as other 4K-supported technologies such as laptops.
According to the latest NDP DisplaySearch research, global shipments of 4K-capable TVs are expected to total 1.9 million units in 2013, and rise to 12.7 million units in 2014.
But more pixels also brings more dilemmas, and so 4K also raises questions. Among them, will 4K production become more common? How will programming be delivered to the home? What are the business models? And is 4K even enough to entice consumers to invest in new TVs?
Sony in particular has been bullish about 4K production from TV series such as The Blacklist, to features such as After Earth, along with remastered titles ranging from Breaking Bad to Funny Girl. But many in the film and broadcast community are still looking at how to produce programming with up to four times as much data as they use today -- and without a quantifiable audience or business model, many who can are questioning if they should.
On delivery to the home, Sony has already launched a 4K Media Player and related 4K download service. But cable, satellite and streaming services are where most anticipate new 4K delivery to take place and these models will be a story at CES.
Meanwhile there remain questions whether 4K is even enough to entice consumers to buy new TVs. While 4K TV has been building momentum, Dolby is proposing a new high definition standard that offers not just more resolution, but higher frame rates, wider color gamut and higher luminance.
Dolby hasn’t yet revealed manufacturing partnerships but says some prototype TVs supporting its proposal will be unveiled at CES.
Also looking beyond the current 4K specification is Japanese public broadcaster NHK, which aims to launch a ‘Super Hi-Vision’ 8K TV system with an ultra-vivid resolution 16 times that of HDTV. Japan’s government is behind the effort and wants to start testing 8K TV in Japan in time for the 2016 Rio Olympics.
Wearable Tech - Revenue Could Reach $1.6 Billion in 2014
Once an infinitesimal category, so called wearable tech will be a major component at this year's CES. The category comprises heavy hitters like Google, with its long-gestating Google Glass eyeglass computer, expected to finally be released in 2014, as well as Sony, Samsung and dozens of smaller fry, some with Kickstarter funding.
Why the interest? The segment is seen as the next great growth area in personal technology, Sales of wearable tech, including smart watches and fitness trackers like Nike's Fuelband bracelet, soared nearly 300 percent in 2012 to 8.3 million devices. (The floor space at CES devoted to digital health and fitness devices was expanded 40 percent for 2014.) According to Gartner research analyst Angela McIntrye, worldwide revenue from wearable electronic devices, apps and services for fitness and health is anticipated to reach $1.6 billion this year, increasing to $5 billion by 2016.
Smart watches -- which combine timekeeping functions with smart phone features like making calls, sending and receiving texts and email and taking photos -- are another category that analysts see as having the potential for exponential growth. Tech analyst Generator Research predicts smart watch shipments will reach 214 million devices with revenue of more than $60 billion by 2018.
Sony's SmartWatch and Samsung's Android-based Galaxy Gear are already on the market, and both companies are expected to reveal updated versions at CES. One criticism of current smart watches is that they must be tethered via Bluetooth to a smart phone to make calls and send and receive texts and email. But waiting in the wings are smart watches reportedly in development at Google and, crucially, at Apple. Silicon Valley analyst Gene Munster predicts Apple's iWatch will be released in 2014 -- it is widely seen as a potentially game-changing device on par with the iPhone.
All of which increases the pressure on Sony, Samsung and the startups to solidify their toehold in the smart watch market before Apple's presumed entry -- it will be interesting to see if their offerings at CES will be evolutionary upgrades or the revolutionary innovation the category needs to go mainstream.
The Connected Car Arrives
Underscoring the increasing convergence between automobiles and technology, a record nine carmakers -- including Audi, BMW, Mercedes-Benz and Ford -- will be on hand at CES. Look for them to showcase enhanced connectivity between personal mobile devices and cars' entertainment and navigation systems -- a trend that increasingly dictates consumers' purchasing decisions. (Gartner predicts that by 2016 the majority of car buyers will demand at least basic Web-based information availability in new cars.)
Audi made waves at the Los Angeles Auto Show in November when it unveiled the 2015 A3, wired for unprecedented connectivity using the 4G LTE standard, the same high-speed standard used on latest smart phones. The technology turns the car into a rolling WiFi hotspot with enough capacity for high-definition video streaming for up to eight personal devices.
At CES Audi is expected to announce a partnership with Google to use Google's Android operating system in Audi's in-dash entertainment and navigation, according to the Wall Street Journal. The partnership is a direct challenge to Apple's similar initiative, iOS for the Car, for which Apple has secured partnerships with Mercedes, Jaguar, Ferrari, Infinity and Volvo among others.
The Google and Apple initiatives acknowledge the premium that drivers now place on seamless connectivity with their smart phones and other personal tech devices, especially among younger buyers, and are also a tacit admission by automakers that their indigenous infotainment systems must be opened to third-party technology companies like Apple in order to stay relevant. CES will offer the opportunity to see just how much territory a company like BMW, which has not partnered with Apple on iOS for the Car, will be willing to cede to outside developers, especially considering the potential revenue from data-mining and advertising the connected car makes possible--one forecast for advertising alone anticipate revenues of $50 billion over the next decade.
The nature of in-car connectivity will also be one of the topics of the show, as increased streaming of entertainment and information raises safety and liability issues related to distracted driving. Garnter predicts drivers and passengers will prefer Internet "snacking" to browsing. "That means getting the right amount of information contextualized at the right time," the company said in a report.
At CES automakers will also showcase their latest efforts in driverless cars -- Audi and Mercedes will demonstrate actual self-driving models -- which are expected to become increasingly common in the next five years as the technology matures. Ford, which has been among the most aggressive of American automakers in terms of connectivity, will demonstrate technology that allows cars to communicate with each other and alert drivers to impending collisions.
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