The Consumer Electronics Show (CES) was held in Las Vegas between January 8 and 12, 2019, and I attended the event with some of my HBS classmates. CES is the world’s most famous and largest trade show for consumer electronics products. I worked in the corporate venture capital and digital transformation sectors in Asia before coming to HBS, and I had been looking forward to participating in this world-famous exhibition for a long time. CES was held at 11 venues in the center of Las Vegas, and 4,400 companies related to consumer electronics showcased their various products using the latest technologies. I visited the various booths over three days and felt how technologies are transforming products and businesses around the world. I would like to share my impressions from visiting CES 2019 and also introduce interesting technologies I found, examples of their use cases, and finally the changes in businesses and industries to come.
Technology developments have been creating tremendous opportunities. By grasping these opportunities, an enormous number of startups have sprung up globally. The most interesting part of this year’s CES was the startup booth area. Approximately 1,200 startups from roughly 40 countries had set up booths, and the area was the most vibrant and energetic out of the entire CES venue.
The areas of startups were divided by each country. In particular, the number of French startups was 325, and they were by far the largest group at CES. There were two things I felt at a high level by seeing these startups and new services. First, I feel our generation is very fortunate for having this innovation era when we are just about to decide our careers. I would like to make full use of opportunities brought by advancements in technologies and create new businesses. Second, technologies themselves are not the purpose but are the enabler towards achieving objectives. I think this is particularly true to people like me who do not have a background in computer science or engineering. I believe, first of all, deciding which sector or problem you want to work on, and then considering what kind of changes would happen if technologies are introduced is the right attitude in order to seize the opportunities caused by technology change.
Appearance of many IoT products
Rapid progress is being made in the Internet of Things (IoT), though some products do not have very sensible value propositions. For example, the toilet maker TOTO showcased an IoT toilet. By attaching sensors to toilets and uploading the data to the cloud, it can keep track of the amount of water used by the toilet and how long it has been used for so that the timing and water volume of cleaning can be optimized. IoT sensors were also embedded on shower heads exhibited by the startup called Pani, and these shower heads can monitor the amount of water used at home. The benefit is that by understanding the amount of water used at home, you can use that information to reduce water use, but I wonder what the total cost would be when taking into consideration the electricity cost of the IoT sensors.
Meanwhile, in B-to-B businesses, companies that use a lot of water are starting to implement these types of IoT sensors provided by large tech companies such as Microsoft. Elsewhere, the Japanese startup Plantio had showcased a product in which an IoT sensor and simple camera are attached to the pod of a plant. By doing so, it can analyze the volume of water and sunshine duration as well as the status of plant growth. Moreover, Recruit Technologies displayed a weight lifting bar that has an IoT sensor attached, so that the weight and number of times lifted can be recorded. The recorded exercise data can be sent to users’ mobile phones. The Internet of Things is changing and expanding the roles of everyday items in ways we never imagined in the past.
Consumer electronics firms entering the auto industry
One of the things that surprised me the most at this year’s CES was the phenomenon that home appliance makers such as Panasonic and Bosch started getting into the automobile industry. Some argue that in the autonomous driving era, cars will be differentiated based on higher-precision car navigation systems, the accuracy of self-driving, and the comfort of the vehicle’s interior space. For the first two factors, companies developed better algorithms using massive data will have an advantage, while for the third factor, companies with design capabilities to produce comfortable interiors will have an advantage. In particular, I believe there will be a large first-mover advantage for the first two factors as they can collect more data. Will existing automakers be able to protect their leading positions under such circumstances? If home appliance makers that have pursued comfort in people’s lives for several decades developed highly advanced technologies that prevent car sickness or shakiness, would they have a chance to be winners in the auto industry?
Autonomous driving and Vegas
When I opened my Lyft app during CES, the app screen showed a notification that there was a possibility that I would be assigned a self-driving car. Las Vegas is the world’s only city where ride sharing based on autonomous driving has been introduced since 2018. Unfortunately, I was unable to experience it this time. But, if these movements accelerate in the future, what kind of future of mobility will be waiting for us ahead? Drivers will disappear from Lyft and Uber. A direct consequence is unemployment problems. Then, what kind of standards will people use to select a ride sharing company? Would it be the company that would take the customer to the destination in the smartest (fastest, cheapest) way? If that is the case, then indeed the company with the strongest algorithm using massive data will be more competitive. By using further collected data, the winners will become even bigger winners. Or, will companies that focus on comfortable interior space as described earlier be selected by customers? In that case, will ride sharing services operated by automobile companies which provide better interior become the winners? In fact, at this year’s CES, auto industry players such as Mercedes-Benz, Continental, Bosch, ZF, Schaeffler, Denso, Aisin, Yamaha, Kia, and Panasonic showcased box-type cars that were developed for the purpose of making the interior space roomier and more comfortable, with their eyes set on the future era of autonomous driving. Major changes are taking place that could change the core value proposition of cars.
Telecommunication companies like Qualcomm displayed their cutting-edge communication technology in 5G. The 5G booths were said to be the highlight of this year’s CES, and they were overflowing with many visitors and media outlets. This technology will enable users to obtain the same level of communication speed as the current Wi-Fi system. In the era of AI and IoT, in which massive amounts of data are transferred through networks, 5G is a necessary component of technological infrastructure. However, in the present time, where Wi-Fi networks are set up in almost all buildings, how many locations are there that require 5G technology? I think mobility services, which are constantly moving around cities, would need this technology, such as autonomous driving and transportation. However, I felt that the appearance of 5G alone will not change the world, as bottlenecks to innovation in the mobility sector include not only network speed but also core technology and regulations.
Integration of robotics and image recognition
I was impressed by the ping pong robot introduced by Omron. It is a robot that plays ping pong against humans. By using a camera to recognize the ball hit by a human player, it makes the necessary moves to hit the ball back. This robot was announced around 2017, so it is not necessarily the latest technology, but it proves that robotics will be able to complete even more advanced tasks. Robots could judge the next necessary movement by themselves in line with the situation happening in front of them. As such, the tasks of robots will become more advanced in manufacturing lines, and the number of human workers might be replaced. By the way, even in the realm of sports, new sports may be born in the future where robots compete with each other.
Alibaba’s real time translator
Alibaba introduced the Real Time Translator implemented on its e-commerce platform. Two people speak to each other in a Skype-like chat setting, while the software translates conversations in real time, so that they can communicate seamlessly. Alibaba created this function by incorporating natural language processing technology that uses machine learning and voice recognition technology. As e-commerce platforms are starting to expand across borders, this technology may become increasingly important. One doubt I have is whether buyers and sellers need to communicate with each other in e-commerce. Who communicates to the seller when purchasing something on Amazon? However, as we learned in our first semester in the Alibaba case, one of the reasons Alibaba became so successful in China is that it created a system where sellers and buyers can communicate easily, building trust between sellers and buyers. As e-commerce develops across borders, I believe this technology will become crucial in removing one of the obstacles.
Attention level monitor sensors
In the future, students and employees might even be monitored by schools or companies to check their attention level. Although the technology is not perfect at this point, compact sensors capable of measuring attention level through brainwave have been developed and commercialized. Brain Co, which had the largest booth in this field in CES, is a company based in Boston. When a user wears Brain Co’s gear, which looks like a hair band, the gear measures the user’s attention and concentration level and then quantifies them. If this technology evolves further, will we enter an age where companies completely monitor their employees? Even if it is not implemented on all employees, there is a high likelihood that it will be used for employees particularly requiring concentration such as truck drivers or workers on manufacturing lines (or, otherwise, tasks requiring concentration might be replaced by robots in the first place). If all students wear this head gear in class at HBS, perhaps the professor will cold-call a student who is not focusing on the class!
Evolution of liquid crystal displays
Liquid crystal displays (LCDs) technology is evolving even further. LCDs have become even thinner and can also be folded. Royole, a company based in Shenzhen, China, showcased a thin and flexible LCD. The liquid crystal attaches to bags and clothing, and can display the screen even if it is bent. Perhaps what awaits with the combination of new technologies such as IoT, edge computing, 5G, and liquid crystal is a world where people can have conversations with bags or clothing. A bag that can tell users what is inside might appear, though I am not sure whether there is a need for that.
Agriculture and data
Agri Talk, based in Taiwan, uses algorithms to analyze information from IoT sensors set up on farm lands and satellite imagery of farmland and proposes the optimal period and amount of fertilization and harvesting. Similar services are sprouting globally (before coming to HBS, I carried out due diligence on startups in this field in India). Although the service is convenient for farmers, the problem is the business model. Large-scale farmers, in particular in North America, have started using these types of services, but such services are difficult to monetize in emerging markets because of the lack of a proper communication or smartphone infrastructure and the smaller amount of farmland owned per farmer or household. In other developed countries, the average age of farm workers is around 60 years old, so the technology has not gained traction. Other than Agri Talk, France-based Dilepx uses an image recognition algorithm that it has developed to analyze aerial photos of farmland taken by drones to determine the presence of pest attacks and the level of growth of farm crops. By doing so, it can identify pest attacks at an early stage, and it also reduces the time for farmers to look around the farmland. These technologies will likely bring about a major change in how farming is done. In many developing countries, roughly half of the population is working in agriculture, so it may lead to unemployment problems. In addition, even if crops are produced more efficiently, there is a problem that revenue margins may be captured by middlemen, and therefore the revenue of the farmers may be unchanged. In this article, I do not describe the details, but I believe that agriculture will become more sustainable by implementing technologies in logistics and distribution as well, putting in place policies accordingly, and comprehensively improving each of these fields.
Supplementary information: Embr Wave
Embr Wave, which appeared in a marketing case in our first semester, had a booth set up at CES. I visited the booth and tried the product. I was able to feel both the warmth and coolness around my wrist by its temperature adjustment function, but it only affected my wrist to be honest. It was an interesting experience, but I did not buy the product, because I thought that I would not be able to endure the cold of Boston just by warming up my wrists. I thought that Ember Wave’s technology would be more attractive if it could develop seats or worker uniforms that can adjust the temperature for users through partnerships with airplane or automobile companies, or companies that produce worker uniforms for harsh conditions.
As I described in this report, technology is having a large impact on almost all industries and is transforming businesses. By continually monitoring an industry or issue where we want to make a difference, and constantly staying up to date with the latest technologies, I believe we can make a difference by seizing the opportunities arising from new advances in technology.
Masato Nakamura (MBA ’20) is originally from Japan and graduated from Keio University in 2010. Prior to HBS, he worked in corporate venture capital and digital transformation at Mitsubishi, where he covered the agriculture, logistics, and healthcare sectors in Asia. You can follow him on Instagram: @masatohbs.