CES: Drones, Virtual Reality and Sony Hack's Potential Impact

Drones could be a $1 billion business by 2018, while 2015 likely to be "huge, defining" year for virtual reality, Consumer Electronics Association projects
Phil Bray Courtesy of Millenium Films

The Consumer Electronics Association addressed some topics of vital interest to Hollywood during its CES opening press conference Sunday in Las Vegas.

This past year, Hollywood took a keen interest in the potential use of drones as a camera platform for production, and now the Consumer Electronics Association is projecting it could become a $1 billion business by 2018. CEA chief economist and director of research Shawn DuBravac said this week's CES might in fact have more than 100 types of drones on display. And he projected that drones could represent $130 million in global revenue during 2015.

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Another topic generating a lot of interest in Hollywood is virtual reality, and DuBravac asserted that this will be a "huge, defining" year for VR. Samsung recently released its Gear VR, and the Oculus Rift and Sony Project Morpheus systems are both expected to be available to consumers later in the year.

The first question during the Q&A targeted the potential impact of the Sony hack and other cyber threats on the consumer electronics industry. DuBravac gave a general response, saying, "It's on everyone's mind. How do we provide a secure environment and a rich environment? … Do I think it will stymie innovation? We've had hurdles before."

CEA reported that the consumer electronics industry overall experienced 1 percent growth in 2014, reaching slightly more than $1 trillion.

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Steve Koenig, CEA's director of industry analysis, asserted that the industry's "dynamic duo" is smartphones and tablets, accounting for nearly half of CE spending this year. But he also questioned how long this would continue because lower-cost handsets and tablets are expected to experience growth, while the market is likely to fragment.

DuBravac related that, while there are about 2 billion smartphones in use today, it won't be long before there are far more connected devices on the market — everything from wearables to connected cars.

CEA projects that 10.8 million smartwatches will ship in 2015. "Does it make sense?" he asked. "Some will agree it does. Some will agree it doesn't."

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Key product categories also include Ultra HD (4K) TVs. DuBravac reported that about 4 million units were moved in 2014, with that number expected to hit 14 million by 2018.

On video game consoles, Koenig questioned if this will be the last year when hardware-based systems are a key factor, or if video gaming will move to the cloud.

Email: Carolyn.Giardina@THR.com
Twitter: @CGinLA