“CES is all about big tech promises and buzzwords. So of course, 5G is all over the place.”
So reads the subhead of a CNET article on the Consumer Electronics Show. Specifically, the 2019 show. The writer goes on to say, “But as with previous editions of the big electronics show, it's largely just that -- talk.”
As we saw and heard over the course of CES 2020, not much has changed, yet the consumer and commercial providers and manufacturers will have us think otherwise. For all the talk about 5G’s ultimate impact on the market, the bulk of the news rightfully focused on overhauling the infrastructure, not consumer products. As noted by Forbes columnist Tim Bajarin in his December 30 show preview: “...many of the telecoms will be at CES talking about their 5G networks and sharing how 5G will impact our world in the next decade.”
And so, they did, with a fervor and certainty about the possibilities 5G has to offer. Most of the news focused on the respective futures of communications and mobile electronics, in addition to plans for new phones, and networking products like routers and other components that are critical to moving massive amounts of data throughout a home or small business.
Those of us who live and breathe the consumer electronics channel are always happy to have a new and clearly improved technology that offers even the most casual users a demonstrable upgrade to everyday experiences. Just as high-definition TV became the de facto standard in home viewing, 5G will no doubt have the same effect on the market. Just not yet.
In my role as the President of a leading CE and commercial distributor, the first item on my to-do list is to make sure we are offering products that will have a positive impact on our customers’ profitability. As much as my team and I believe that 5G will have such an effect, in the short term, it remains more theoretical than practical.
Unless we are mistaken, consumers won’t have a clear and definitive need to upgrade networks, phones and related accessories until Q1 ’21. This year, there will be no shortage of talk to accompany an overload of products that are positioned as “5G-ready”. But unless the infrastructure is locked and loaded to the point where it proliferates across the country, we run the risk of underwhelming the market at large.
However, 2020 will likely be a boon year for the channel, thanks to the upcoming onslaught of 8K TVs. Though 8K has been a presence at CES for the past few years, the next 12 months will see a concerted effort on the part of manufacturers and content providers alike to tout the old vs. new benefits of the format. Expect to see 8K promotions throughout the 2020 Tokyo Olympics, which will be the first major, global sporting event to feature the format.
As we first saw with HD and later, 4K, American consumers are more than willing to invest in viewing upgrades that are obvious and appreciated at first glance. And, like 4K, big box retailers will stock scads of 8K models of all varieties, but it will be the independent dealer who knows how to merchandise a new TV in a drool-worthy setting that inspires sales of the display and all the necessary components and accessories for a deep-dive into the new format.
In addition to TVs and the eventual arrival of 5G, the Connected Home continues to be an important chunk of the market, with Artificial Intelligence (AI) now an expected feature in audio and other entertainment-related products, not to mention the evolving Smart Health category. From communications to connected canes, Smart Health is an area we will see expand several fold in the months and years ahead.
That brings me back to 5G and how it will eventually change the landscape. When it finally becomes a familiar presence, there will be no shortage of product categories that will benefit from the significant improvements in performance and global innovation that will benefit everyone in the supply chain. As a company, Capitol is bullish on the importance of the network as the brains and backbone of the modern smart home, and 5G will bring with it the need to upgrade and fortify home and commercial systems at every level. But, for now, we advise our customers and the market at large to focus on near-term introductions that will boost their bottom line sooner than later.