Big stories and associated new product announcements to track during the upcoming Consumer Electronics Show (CES 2011) are the rapid proliferation of tablet computers; new smartphone and “superphone” devices and applications; the changing landscape in the operating system arena; and the decline of the video disc and rise of streaming video services.
Big Story One: The extremely fast and numerous rollouts of tablet computers
It’s likely that tablet computers will establish themselves at CES 2011 as the biggest overall products story. Clearly, these computers are one of the fastest grow¬ing consumer electron¬ics markets; the hype about them is loud and pervasive.
It will also become increasingly evident that companies that make desktop and laptop PCs, but not tablet computers, will realize that they probably ought to do so—soon. Those that don’t will be left out of rapidly growing and potentially huge consumer and enterprise markets.
Also, attendees will wonder whether the tablet computers could be a desktop and laptop replacement. This may happen gradually over the next few years because tablet computers tend to be smaller, weigh less, and are more portable and convenient to use. Tablet computers will also increasingly offer all the functionality and features of traditional PCs.
Similarly, it’s clear that a growing number of smartphone manufacturers are feeling the pressure to introduce tablet computers. Offering one but not the other is becoming a growing threat to their businesses. Tablet computers and smartphones provide some similar functions and are gradually converging in terms of applications, services, and size. Without offering both devices there is a large hole in a consumer electronics manufacturer’s product line that is starting to look more gaping for long-term business prospects.
Accenture estimates there are 30 – give or take a few -- tablet computers in the market and over the next few years will see them integrate smartphone headsets.
Another emerging theme will be the rapid deployment of the Android operating system on tablet computers—not just on smartphones. We predict there will be a growing demand for consumers to use smartphone operating systems, in place of desktop PC operating systems, on tablet computers.
Big Story Two: New smartphone and “superphone” devices and applications
For the past few years smartphones have gained their share of the CES spotlight although have not been the overriding dominant story. Due to myriad dynamics surrounding this rapidly growing segment of the mobile handset market, smartphones have become too important to the future of the consumer electronics industry, and the enterprise arena overall, for them not to be a main storyline at CES 2011.
The new smartphones rolled out during the event will look slicker than ever. But more of the buzz and business opportunities will focus on which operating system these run on such as Android; what new applications are available and from whom; and whether and when they can enable 3G or 4G capabilities
Also something to keep an eye on will be announcements about new “superphones,” which in industry lexicon are also being labeled “App Phones.” What is a superphone versus a smartphone? Within the industry the debate is heating up. A standard definition does not exist, but the basic idea is that a superphone can be thought of as the next generation beyond smartphones, delivering a full web experience compared with a partial one with smartphones.
Superphones will be driven by more powerful semiconductor engines (1.5 GHz and faster vs. typically 1 GHz and below for smartphones); tens of thousands of applications versus hundreds for smartphones; 3G, 4G and Wifi bandwidth versus mainly 2G and 3G bandwidth for smartphones. With such capabilities, superphones legitimate small mobile computers in your pocket, with phone/texting just some applications among many.
One smartphone application likely to be buzzed about at CES 2011 is mobile payments. Look for news about smartphones that enable consumers to use their handsets to pay for goods in various places such as, perhaps, restaurants and stores. Within the next two to three years the smartphone will work in place of a credit card on a much more global basis (Japanese consumers have benefitted from this for several years). Also check during CES2011 for stories about smartphones being used for other new monetary applications beyond mobile payments.
A new Accenture survey found that smartphone users would find it useful to download money off coupons to their phones (79 percent), and receive instant money-off coupons as they pass by an item in a store (73 percent). Conversely, less than half (48 percent) of smartphone users have downloaded a coupon from their PCs. Notably, 48 percent of conventional cell phone users surveyed plan to buy a smartphone in the next 12 months. These survey results are an early indicator that mobile applications will transform how businesses compete with one another and interact with customers.
Big Story Three: The changing landscape in the operating system arena
Lurking just beneath the more conspicuous new consumer electronics technologies will be another important CES 2011 story. It will center on the notion that fragmentation of operating systems for PCs, mobile handsets and tablet computers continues to pick up momentum.
Corporate chief information officers (CIOs) and consumer electronics manufacturers will need to rapidly address this fragmentation, sort it through, and make business decisions about which ones to embrace, which ones to integrate, and possibly which ones to stop using. The jury remains out about which operating systems will ultimately win. But the compe¬tition is intensifying. Traditional PC operating systems are being challenged in new ways by other legitimate and viable operating systems.
Of course the PC operating system is not going away anytime soon. However, it is being re-evaluated and re-imagined and travels on a slower growth trajectory compared with other emerging operating systems. Future consumer electronics operating systems are not likely to be the same as those traditionally used for the past few decades. During the next several years, cloud computing will be a driver of plat¬form/engineering changes, and this may leapfrog traditional PC operating system architectures.
In addition to the growing use of cloud, the arrival and mounting use of mobile dual-core chips will raise concerns for traditional operating systems and how they are used or not within enterprises. Mobile handset chip makers are starting to churn out chips that are, arguably, as powerful as some low-end PC chips. This will give today’s smartphones and a number of tablets a big boost and CIOs more opportunities, along with more choices to make, for their employees technology resources. Watch for news about these trends at the show.
Big Story Four: The decline of the video disc and rise of streaming video services
The demise of the video disc will be another prevalent theme at CES 2011. Viewing content directly from the Web is rapidly growing. This is causing digital video discs to slowly fade from the scene.
More people are using consumer electronics items, such as Internet-connected televisions, to consume entertainment media on-demand. Video streaming is a rapidly growing consumer phenomenon. This begs the question: Why rent or buy a DVD when you can simply stream the film directly? In the near future much less video or music content on discs will be available. This content will, for the most part, be streamed, thereby reducing the need for on-board disc capability.
This decline of disks and rise of content services trend will push consumer electronics companies into tighter collaborations with aggregators and providers of content. Announcements about such collaborations are reasonable to expect at CES 2011. These joint efforts offer an opportunity for integrated consumer electronics/content companies to rise again or face serious competition from providers of streaming and rental services.
There will be no getting away from the story about the gaggle of tablet computers to be rolled out, and the impact of these new products on uses of traditional PCs. Heightened pressure on smartphone makers to enter the tablet computer business is legitimate. Given the convergence of one or more functions into these devices, tackling the market with only one of these products is a recipe for a missed opportunity.
Although this story about competitive threats could be found at virtually every CES ever held and any technology trade show, this year the threats and uncertainties are so numerous, specific and important that they are worth emphasizing and watching carefully. The companies that see clearly through this transition will seize business opportunities and drive towards high performance.
Kumu Puri is a senior executive in the consumer electronics practice within Accenture’s Electronics & High-Tech industry group. She can be reached at firstname.lastname@example.org.