4 Tech Markets that Have Something to Prove at CES 2018
With every trip to Vegas in early January, I try to convince myself that I have a meaningful plan of attack for how I want to cover CES. But then we show up and it seems like, no pun intended, all bets are off. I don’t even know why we schedule appointments when we all know we’re likely to show up late, get stood up, or realize way too late that we scheduled things in the wrong damn time zone. So many things occur at CES that we’re left with spinning heads and a pile of business cards and marketing material that’s going to sit in a drawer until the next CES rolls around.
That said, Year Three for me brings with it a fresh research-driven perspective on the CE retail industry. The Dealerscope CE Retail Confidence Index is fully ingrained in my personal being at this point that I find myself attempting to apply our data to everything we do and cover here at Dealerscope. So, CES 2018 will be no different.
Thinking about some of the trends that we’ve followed over the past year and a half with these monthly surveys, there are a couple of tech segments that I plan to keep a particularly close eye on while out in Las Vegas this year. Our retail audience has given us a great deal of insight into what product segments they’ve been able to sell to consumers and which they’ve, frankly, really struggled with. Some of the insights we’ve gleaned from retailers appear to clash with certain market projections that we’ve seen of late.
So, I’m leaving up to the brands exhibiting in some of these tech markets to impress me and prove the following statements true or false:
VR isn’t Dead
Virtual reality really took a beating from the tech industry throughout the majority of 2017. At this point, it’s beyond an emerging market—it’s been featured at each of the last three CES events that I’ve been too, and we know it’s been around for longer than that. Yet, it’s still struggling mightily to find a foothold with consumers. In our own research, VR was rated CE retailers’ second-worst product category in 2017.
It’s a space that’s dogged by a two main issues: The high cost and lack of portability of higher-end models, and the poor, limited performance of lower-end ones. It’s crazy that a consumer can go from spending hundreds (or even thousands) of dollars on an Oculus or PS VR for their tethered VR experience do to a few bucks for the gimmicky cardboard viewfinder experience that relies on the far-less-powerful smartphone. A bonus issue for VR is its lack of must-have content outside of the gaming realm. People don’t have a real reason right now to buy into VR.
This segment needs to steps its game up in a big way in 2018 if it hopes to hang around much longer. I need to see something other than a new headset that can hold my phone inches from my face. But I also need to see something other than a “wireless VR rig” that costs an arm and a leg and only appeals to the gamiest of gamers. I don’t necessarily have the answer for what the VR sweet spot is, but manufacturers better figure it out in a hurry.
AR Really is the Platform of the Future
Completely contrary to my feelings on VR, I’ve found myself to be rather bullish on the AR industry. The two share some inherent similarities in they alter what the user is seeing visually. But AR seems to have a much more user-friendly and less-invasive vibe to it than VR.
We’re a year and a half removed from the launch of Pokémon Go, which really brought the technology into the consumer mainstream, and we’ve seen all of the craziness with filters on Snapchat, Facebook, and Instagram. And we’ve seen AR integrated into smartphones with Apple’s ARKit and Tango on Google devices.
But where is AR actually heading? That’s what I need to find out at CES 2018. Are we sold on this experience being driven by the phone? The AR glasses market has really been at a standstill since Google Glass flopped. Can it make a comeback? And can manufacturers develop a product that doesn’t peg the user as a tech nerd unlike AirPods, which stick out like a sore thumb?
I think this is one of the more exciting categories moving forward, but I need to see some real, tangible improvements if we’re to believe it to be the platform of the future.
Consumers will Come Around on Smart Home Tech
We know that smart home technology is pretty awesome and pretty powerful. When you cover the stuff on an almost daily basis, you run across some real unique products and brands that are working to improve and make more efficient the way we live our lives at home.
On the other side of that coin is the rest of the U.S. consumer population.
According to Parks Associates research released last summer, more than 100 million U.S. homes did not have a smart device in them at the end of 2016. That’s out of a possible 117 million households. By 2021, it’s expected that more than half of U.S. homes will be “smart homes.” This is a market segment that’s been slow to grow, but the potential—if brands can find a way to tap into it—is enormous.
We’ve covered the hurdles that this industry faces with adoption in the U.S.—things like perceived costs and privacy and data security concerns—and what I’m most interested in discovering at CES 2018 is how brands are attempting to get over those hurdles. I’m sure we’ll see some pretty cool new smart home products launched in Vegas, but cool tech isn’t the problem with the connected home. It’s addressing those concerns. Until they do, achieving those lofty adoption numbers may just be a pipe dream.
Digital Imaging has a Future
Digital imaging was essentially left dead to rights about five years ago. The smartphone had essentially destroyed the digital camera market, and DSLRs were pretty much out of the average consumer’s reach in terms of both price and necessity—why spend hundreds or even thousands of dollars on a product that you’re going to use to take selfies and pictures of food that get posted to Instagram? Heck, those things don’t even have fancy filters, or AR functionality.
But, what we’ve seen in our DS Index is that the digital imaging segment is still holding on strong and its retailers’ overall confidence in the segment is even starting to drive its way back up. Year-over-year, the segment actually experienced the largest growth out of the 13 product categories we survey retailers on. We believe it’s been driven by the emergence of 360-degree and VR imaging devices. These simple-to-use devices have borrowed greatly from the smartphone in a number of different ways, be it form factor (i.e. the Ricoh Theta line of 360 cams), or using an actual smartphone app to control the device.
I’m not really sure what to expect from this market at CES 2018, but I’m hoping to see something more than gimmicky digital camera alternatives. How will 360/VR cameras advance in 2018, and what new use cases can manufacturers think of to help this market continue to re-emerge?