Tag Archives: ces

CES analyst predicts flat global consumer tech sales, massive dominance of smartphones and tablets, drift towards low-end

At CES in Las Vegas yesterday, CEA Director of Industry Analysis Steve Koenig presented data and predictions on global tech spending trends. The figures come out of CEA Research and are based on sales tracking at retail outlets around the world supplemented by other data.

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This being CES, I was expecting a certain amount of hype around how consumer technology is changing the world, but in fact Koenig’s presentation was matter-of-fact and somewhat downbeat. He said that the overall consumer tech spending trend is flat, with rising spend in emerging markets (especially China) more or less making up for declining spend in mature markets, which he says is due to market saturation. His figures show 2% growth in spending in 2013 but a 1% decline in 2014. Given the uncertainty of this kind of forecast, let’s call it flat.

The “market saturation” factor is a point to ponder. It suggests that technical devices are “good enough” for longer. It also suggests that overall the new gadgetry on show at CES is not sufficiently exciting to persuade us to spend a higher proportion of our income on consumer electronics.

Looking at his figures though, it is not just a matter of saturation. Another factor is device convergence. We are spending less on cameras and camcorders because a smartphone is good enough. We are spending less on printers because there is less need to print stuff; we can view it on a tablet. We don’t need a SatNav any more; we use a smartphone (or it is built into the car’s dashboard). In fact, we are loving our smartphones and tablets so much that spending on almost any other kind of tech is in decline. Here’s the slide showing how these mobile devices are forecast to account for 43% of consumer tech spending in 2014:

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Spending on smartphones is forecast to increase by 9% in 2014, and on tablets 6%. Almost the only other broad category for which significant revenue growth is forecast in 2014 is video games consoles, thanks to the launch of new generation Xbox and PlayStation boxes (maybe Steam boxes too). That is a product cycle, not a long-term trend. Personally (my thoughts, not Koenig’s) I reckon games consoles will decline thanks to competition from smartphones, tablets and smart TVs. Global TV sales are expected to increase by 2% in units.

The other big picture trend identified by Koenig is the reduction in the average selling price (ASP) of smartphones and tablets. Smartphone ASP is down from $444 in 2010 to $297 in 2014.

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This trend is partly because the quality of cheaper devices has improved, but also because the emerging markets which are spending more are also markets that want lower prices. Taken together, this translates to a significant shift towards the low end. Overall, CEA forecasts that tech spending in developing markets, primarily on low end devices, will equal tech spending in mature markets for the first time in 2014.

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Of course this is largely an Android story. I will add though some reflections on what has happened with Windows in the light of these trends. Microsoft was right to adapt Windows for tablets, but if you look at how Windows 8 was launched there was too much focus on the high-end, trying to copy Apple rather than compete with Android. That was a mistake, and it is only recently that OEMs like Asus, with its T100 Windows 8.1 tablet, have started to come out with decent low-end devices. Nokia on the other hand has done exactly the right thing with its Lumia Windows Phones, building market share with excellent low-end smartphones. Whether that momentum will be sustained following Microsoft’s acquisition will determine the fate of the phone platform. 

Finally, note that forecasting the future is never easy and this time next year the picture may look quite different.

Update: Koenig’s slide deck is here.

Windows Phone, Windows 8, and Metro Metro Metro feature in Microsoft’s last keynote at CES

I watched Microsoft CEO Steve Ballmer give the last in a long series of Microsoft keynotes at the Consumer Electronics Show in Las Vegas.

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There were three themes: Windows Phone, Windows 8, and Xbox with Kinect. It was a disappointing keynote though, mainly because of the lack of new news. Most of the Windows Phone presentation could have been from last year, except that we now have Nokia involvement which has resulted in stronger devices and marketing. What we have is in effect a re-launch necessitated by the failure of the initial launch; but the presentation lacked the pizzazz that it needed to convince sceptics to take another look. That said, I have enjoyed using Nokia’s Lumia 800 and still believe the platform has potential; but Microsoft could have made more of this opportunity. A failed voice demo did nothing other than remind us that voice control in Windows Phone is no Apple Siri.

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What about Windows 8? Windows Chief Marketing Officer Tami Reller gave a presentation, and I was hoping to catch a glimpse of new stuff since the preview at last year’s BUILD conference. There was not much though, and Reller was using the same Samsung tablet as given to BUILD delegates. We did get a view of the forthcoming Windows Store that I had not seen before:

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Reller mainly showed the Metro interface, in line with a general focus on Metro also emphasised by Ballmer. She talked about ARM and said that Metro apps will run on both Intel and ARM editions of Windows 8; notably she did not say the same thing about desktop apps, which implies once again that Microsoft intends to downplay the desktop side in the ARM release.

Reller also emphasised that Windows 8 Metro works well on small screens, as if to remind us that it will inevitably come to Windows Phone in time.

Windows 8 looks like a decent tablet OS, but the obvious questions are why users will want this when they already have iOS and Android, and why Microsoft is changing direction so dramatically in this release of Windows? The CES keynote was a great opportunity to convince the world of the merits of its new strategy, but instead it felt more as if Microsoft was ducking these issues.

Xbox and Kinect followed, and proved firmer ground for the company, partly because these products are already successful. There was a voice control demo for Xbox which worked perfectly, in contrast to the Windows Phone effort. We also heard about Microsoft’s new alliance with News Corporation, which will bring media including Fox News and the Wall Street Journal to the console. We also saw the best demo of the day, a Sesame Street interactive Kinect game played with genuine enthusiasm by an actual child.

Microsoft unveiled Kinect for Windows, to be released on 1st February, except that there was not much to say about it. Amazon.com has the product available for pre-order, and there was more to be learned there.

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The new product  retails at $249.99, compared to $149 for the Xbox version, but seems little different. Here is what the description says:

This Kinect Sensor for Windows has a shortened USB cable to ensure reliability across a broad range of computers and includes a small dongle to improve coexistence with other USB peripherals. The new firmware enables the depth camera to see objects as close as 50 centimeters in front of the device without losing accuracy or precision, with graceful degradation down to 40 centimeters. “Near Mode” will enable a whole new class of “close up” applications, beyond the living room scenarios for Kinect for Xbox 360.

I imagine hackers are already wondering if they can get the new firmware onto the Xbox edition and use that instead. Kinect for Windows does not come with any software.

What is the use of it? That is an open question. Potentially it could be an interesting alternative to a mouse or touch screen, face recognition could be used for personalisation, and maybe there will be some compelling applications. If so, none were shown at CES.

I am not sure of the extent of Microsoft’s ambitions for this first Windows release of Kinect, but at $249 with no software (the Xbox version includes a game) I would think it will be a hard sell, other than to developers. If wonderful apps appear, of course, I will change my mind.

Talk of Windows 8 on an smartphone shows Microsoft’s mobile confusion

During a conference call to discuss Intel’s latest financials, CEO Paul Otellini raised the possibility of putting the full Windows OS onto a smartphone, running a low power Intel SoC (System on Chip). The matter came up with Otellini was asked about the impact of Windows on ARM, announced at CES earlier this month:

The plus for Intel is that as they unify their operating systems we now have the ability for the first time: one, to have a designed-from-scratch, touch-enabled operating system for tablets that runs on Intel that we don’t have today. And secondly, we have the ability to put our lowest-power Intel processors running Windows 8 – or ‘next-generation Windows’ – into phones, because it’s the same OS stack. And I look at that as an upside opportunity for us.

The reasoning seems to be: if Windows 8 is designed to run well on mobile devices with ARM, it will also run well on mobile devices with an Intel SoC, which will let us put it on phones.

Note the point he highlighted: Microsoft unifying its operating systems. No more full Windows vs Windows CE; one OS from mobile to desktop.

Although that sounds compelling, the snag is that Windows is not well suited to low-power mobile devices, which is why Windows CE was invented in the first place. Microsoft can fix this to some extent by fixing the things that make it unsuitable, but it carries a heavy compatibility burden.

It also throws up the question: just what are Microsoft’s long-term plans for Windows Phone 7, which is built on Windows CE, has its own GUI mostly written in native code, and a development platform based on .NET – Silverlight and XNA – plus a native code SDK that only mobile operators and device manufacturers get to use?

At CES Microsoft Steven Sinofsky sort-of denied that Windows will encroach on Windows Phone 7 territory. “Windows Phone 7 is uniquely focused on the small form factor that Windows doesn’t focus on,” he said.

Nevertheless, the company’s decision not to use the Windows Phone 7 OS for tablets may make that inevitable. What is the difference between a smartphone and a small tablet? Does Microsoft expect developers to write apps designed for Windows on a small tablet and then rewrite them for Windows Phone 7 using Silverlight?

It does not make sense; and despite the Windows Phone 7 promotion included in CEO Steve Ballmer’s CES keynote, I was left wondering whether Microsoft’s new mobile OS really has a future.

That said, Silverlight abstracts the OS, so in principle Microsoft could use it to form a consistent mobile development platform irrespective of whether the underlying OS is Windows CE or full Windows. I am not getting that sense from the company though, and I’d expect the primary Windows SDK to remain based on C++.

I am struggling to understand how Microsoft expects this to work. App compatibility is the obvious benefit of full Windows; but two big issues are that most Windows apps are not touch-friendly and are not designed for small screens. Putting Windows on a tablet with a decent screen size and the dreaded stylus works to some extent, but will never compete with Apple’s iPad for usability. On smaller screens most existing apps will not work properly; and if Windows on small devices sprouts a completely new touch-friendly GUI, or borrows the one from Windows Phone 7, then app compatibility with desktop Windows will be limited.

It feels as if Microsoft’s Windows team is saying one thing, the Windows Phone 7 and developer teams saying another, and partners like Intel saying yet another. Windows Phone 7 was meant to be the thing that made belated sense of Microsoft’s mobile strategy, but even that now looks doubtful for the reasons stated above.

Microsoft is still a long way from having a coherent strategy for mobile devices, and that lack is damaging the company and helping Apple and Google to establish their competing operating systems.

Update: Mary-Jo Foley writes about Microsoft “Jupiter” which is a rumoured new user interface and application model designed for Windows 8 and its app store:

Jupiter is going to be a new user interface (UI) library for Windows, built alongside Windows 8. It will be a thin XAML/UI layer on top of Windows application programming interfaces and frameworks for subsystems like graphics, text and input. The idea is Jupiter will bring support for smoother and more fluid animation, rich typography, and new media capabilities to Windows 8 devices.

Is Jupiter a .Net technology, or XAML adapted for native code, or both? Is it one and the same as, say, Silverlight 6? That is not stated, though Senior VP Soma Somasegar helpfully (or not) said that:

some of the information in this post is not right and out of date, not reflecting Microsoft’s current thinking.

That seems to tacitly confirm that it fairly represents Microsoft’s thinking at some time in the not-too-distant past.

It would make sense to me if Microsoft used Silverlight to unify its application platform as mentioned above, and combining the XAML presentation layer with native code could address performance and memory usage concerns with .NET. This is the kind of news that would really give confidence to Silverlight developers, rather than the damage limitation PR that Microsoft has put out since PDC late last year.

On the other hand, I believe Somasegar when he says the information is out of date, so for the time being it is just another dose of uncertainty.

NVIDIA Tegra 2: amazing mobile power that hints at the future of client computing

Smartphone power has made another jump forward with the announcement at CES in Las Vegas of new devices built on NVIDIA’s new Tegra 2 package – a System on a Chip (SoC) that includes dual-core CPU, GPU, and additional support for HD video encoding and decoding, audio, imaging, USB, PCIe and more:

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The CPU is the ARM Cortex-A9 which has a RISC (Reduced Instruction Set Computer) architecture and a 32-bit instruction set. It also supports the Thumb-2 instruction set which is actually 16-bit. How is 16-bit an upgrade over 32-bit? Well, 16-bit instructions means smaller code, even though it gets translated to 32-bit instructions at runtime:

For performance optimised code Thumb-2 technology uses 31 percent less memory to reduce system cost, while providing up to 38 percent higher performance than existing high density code, which can be used to prolong battery-life or to enrich the product feature set.

The GPU is an “ultra low power” (ULP) 8-core GeForce. In essence, the package aims for high performance with low power consumption, exactly what is wanted for mobile computing.

Power is also saved by sophisticated power management features. The package uses a combination of suspending parts of the system, gating the clock speed, screen management, and dynamically adjusting voltage and frequency, in order to save power. The result is a system which NVIDIA claims is 25-50 times more efficient than a typical PC.

According to NVIDIA, Tegra 2 enables web browsing up to two times faster than competitors such as the Qualcomm Snapdragon 8250 or Texas Instruments OMAP 3630 – though of course these companies also have new SoCs in preparation.

Tegra 2 is optimised for some specific software. One is the OpenGL graphics API. “The job of the GPU is to implement the logical pipeline defined by OpenGL”, I was told at an NVIDIA briefing.

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I asked whether this meant that Tegra 2 is sub-optimal for Microsoft’s Direct X API; but NVIDIA says it is sufficiently similar that it makes no difference.

Nevertheless, Tegra 2 has been designed with Android in mind, not Windows. There are a couple of reasons for this. The main one is that Android has all the momentum in the market; but apart from that, Microsoft partnered with Qualcomm for Windows Phone 7, which runs on Snapdragon, shutting out NVIDIA at the initial launch. NVIDIA is a long-term Microsoft partner and the shift from Windows Mobile to Android has apparently cost NVIDIA a lot of time. The shift took place around 18 months ago, when NVIDIA saw how the market was moving. That shift “cost us a year to a year and a half of products to market”, I was told – a delay which must include changes at every level from hardware optimisation, to designing the kind of package that suits the devices Android vendors want to build, to building up knowledge of Android in order to market effectively to hardware vendors.

Despite this focus, Microsoft demonstrated Windows 8 running on Tegra during Steve Ballmer’s keynote, so this should not be taken to mean that Windows or Windows CE will not run. I still found it interesting to hear this example of how deeply the industry has moved away from Microsoft’s mobile platform.

Microsoft should worry. NVIDIA foresees that “all of your computing needs are ultimately going to be surfaced through your mobile device”. Tegra 2 is a step along the way, since HDMI support is built-in, enabling high resolution displays. If you want to do desktop computing, you sit down at your desk, pop your mobile into a dock, and get on with your work or play using a large screen and a keyboard. It seems plausible to me.

During the press conference at CES we were shown an example of simultaneous rich graphic gaming on PC, PlayStation 3, and Tegra 2 Smartphone.

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Alongside Android, Tegra 2 is optimised for Adobe Flash. NVIDIA has been given full access to the source of the Flash player in order to deliver hardware acceleration.

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Actual devices

What about actual devices? Two that were shown at CES are the LG Optimus 2X:

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and the Motorola Atrix 4G:

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Both sport impressive specifications; though the Guardian’s Charles Arthur, who attended a briefing on the Atrix 4G, expresses some scepticism about whether HD video (which needs a large display) and the full desktop version of FireFox are really necessary on a phone. Apparently the claimed battery life is only 8 hours; some of us might be willing to sacrifice a degree of that capability for a longer battery life.

Still, while some manufacturers will get the balance between cost, features, size and battery life wrong, history tells that we will find good ways to use these all this new processing and graphics power, especially if we can get to the point where such a device, combined with cloud computing and a desktop dock, becomes the only client most of us need.

NVIDIA says that over 50 Android/Tegra 2 products are set to be released by mid-2011, in tablet as well as Smartphone form factors. I’m guessing that at least some of these will be winners.

Steve Ballmer at CES: Microsoft pins mobile hopes on Windows 8

Microsoft CEO Steve Ballmer gave the keynote at CES in Las Vegas last night. It was a polished performance and everything worked, but was short on vision or any immediate answer to the twin forces of Apple iPad and Google Android which are squeezing out Microsoft in the mobile world – smartphones and tablets – which currently forms the centre of attention in personal computing.

That said, CES stands for Consumer Electronics Show; and Ballmer did a good job showing off how well Kinect is performing, claiming sales of 8 million already. He showed more examples of controlling Xbox through speech and gesture, and said that Kinect is also boosting sales of the console; clearly it is now taking it beyond the hardcore market of first-person shooters.

We saw some fun new Windows devices, such as Acer’s dual-screen Iconia laptop.

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There was also a demonstration of the updated Microsoft Surface which now runs full Windows 7 and does not require hidden cameras, so that it can now be used in more scenarios, such as for interactive digital signage.

All well and good; but what about mobile? We got a Windows Phone 7 demo, but no sales figures, nor any mobile partners on stage; I’m guessing they are too busy promoting their new Android devices. Ballmer did say that the phone is coming on Verizon and Sprint in the first half of this year. Application availability is improving, but how will Microsoft win attention for its smartphone? My local high street is full of mobile phone shops, none of which even stock it as far as I can tell. There is a tie-in with Xbox Live which may help a little.

The problem though is that Microsoft does not seem to be wholeheartedly behind the Windows Phone 7 OS, which is based on Windows CE with a new GUI and Silverlight/XNA runtime for applications. Rather, Microsoft is signalling that full Windows is its future mobile operating system. At CES it announced Windows on ARM, the processor of choice in mobile, and during the keynote we saw the next version of Windows (though with the Windows 7 GUI) running on various ARM devices.

The power available in new System on a Chip packages like NVIDIA’s Tegra 2 leaves me in no doubt that full Windows could technically run on almost any size of device; but that does not make it the sensible choice for all form factors. Note also that while it was not mentioned at CES, NVIDIA has said that Tegra 2 is optimized for Android.

Microsoft could plausibly have released a tablet based on the Windows Phone 7 OS, which is built for touch control, this year. Instead, it will be at least 2012 before we see a Windows 8 tablet, and we are taking it on trust that this will really work nicely with touch and not need a stylus dangling at the side. By then Apple will, I presume, be releasing iPad generation 3.

Putting this in a developer context, what is Microsoft’s mobile development platform? Silverlight and XNA? The full Windows native API? Or HTML 5? Each of these is very different and it seems to me a muddled story.

Hardware vendors chase Apple’s iPad at CES with Android, not Windows

There is a chorus of disapproval on the web today as Asus announced a full-fat Windows tablet  (Eee Slate EP121)  at CES in Las Vegas, along with three other devices running Google Android – the Eee Pad MeMo, the Eee Pad Transformer, and the Eee Pad Slider.

The most detailed “review” I’ve seen for the EP121 is on the Windows Experience Blog. Core i5, 4GB RAM, 64GB SSD, capacitive screen with touch and stylus input.

Nice in its way; but no kind of game-changer since this is an echo of early Windows slates which never achieved more than niche success. Four big disadvantages:

  • Short battery life
  • High price
  • The stylus
  • and another thing: in the rush to embrace touch computing, vendors appear to have forgotten one of the best features of those early tablets: you could rest your hand on the screen while writing with the pen. If you have a combined touch/stylus device that will not work.

Microsoft fans will be hoping CEO Steve Ballmer does not make too much of the EP121 and devices like this in tonight’s keynote. If he does, it will seem the company has learned little from failures of the past.

Asus deserves respect for introducing the netbook to the world in 2007, with the original Eee PC. It ran Linux, had an SSD in place of a hard drive, battery life was good, and above all it was light and cheap. Back then the story was how Microsoft missed the mark with its 2006 Origami project – small portable PCs running Windows – only to be shown how to do it by OEMs with simple netbooks at the right price.

Asus itself is not betting on Windows for tablet success; after all, three of the four products unveiled yesterday run Android. Despite what was apparently a poor CES press conference these may work out OK, though the prices look on the high side.

There will be many more tablets announced at CES, most of them running Android. Android “Honeycomb”, which is also Android 3.0 if Asus CEO Johnny Shih had his terminology right, is the first version created with tablet support in mind.

But why the tablet rush? The answer is obvious: it is because Apple has re-invented the category with the iPad. Since the iPad has succeeded where the Tablet PC failed, as a mass-market device, intuitively you would expect vendors to study what is right about it and to copy that, rather than repeating past mistakes. I think that includes long battery life and a touch-centric user interface; keyboard or stylus is OK as an optional extra but no more than that.

Equalling Apple’s design excellence and closed-but-seamless ecosystem is not possible for most manufacturers, but thanks to Android they can come up with devices that are better in other aspects: cheaper, more powerful, or with added features such as USB ports and Adobe Flash support.

It is reasonable to expect that at least a few of the CES tablets will succeed as not-quite iPads that hit the mark, just as Smartphones like the HTC Desire and Motorola Droid series have done with respect to the iPhone.

Microsoft? Ballmer’s main advantage is that expectations are low. Even if he exceeds those expectations, the abundance of Android tablets at CES shows how badly the company misjudged and mishandled the mobile market.

The implication for developers is that if you want app ubiquity, you have to develop for Android and iOS.

Microsoft could help itself and its developers by delivering a cross-platform runtime for the .NET Framework that would run on Android. I doubt Silverlight for Android would be technically difficult for Microsoft; but sadly after PDC it looks unlikely.