New Game World

CEA’s Predictions for 2010

OK, Hmmmm, Oh Really?!

By: Craig H. Bird

Consumer Electronics Association (CEA) Shawn DuBravac (Chief Economist and Director of Research) and Ben Arnold (Senior Research Analyst) gave an interesting presentation on “CES Trends to Watch: 4 Days 4 Predictions”. In CEA tradition, they took an impressive academic approach, drawing information from consumer research, sales data & forecasts, economic analysis and their expansive research library.

Shawn and Ben did yeomen's work and though many of their predictions are intuitively obvious, others were insightful and thought provoking, but I’m dubious about a few of their key predictions. However, before I get to my comments, here are the topics Shawn and Ben covered:

Beyond HD: Tomorrow’s TV Experience

• Connected displays deliver a new interactive environment with access to content, movies, music, widgets and more.
• 3D TV goes mainstream.

Content: Connecting and Corralling

• Mobile TV, devices meet services, packaged media, software

New Screens Find the Sweet Spot

• A new crop of portable devices highlights innovation
• New business deals / partnerships take place

Customization and Personalization Empowers the Individual

• Apps are omnipresent
• Maturing CE segments crave accessories

To start, I agree with many of their predictions, but I’m dubious about three of their key predictions: 3DTVs, Netbooks and e-Readers, and will discuss them in some detail below.

To be sure, 3DTVs are a top story at this year’s CES. These long-awaited displays are impressive, but in my opinion the new strategic partnerships that accompany this new consumer technology are even more impressive, but more on partnerships later. I disagree with Shawn and Ben’s prediction that “nearly 4.3M 3DTVs will be sold in 2010” and that “By 2013 Over a Quarter of All TV Sets Sold Will Be 3DTVs”. Maybe they are focusing on the manufacturers’ pipeline, or to the marketing hype, but it appears that they have overlooked the unemployment rate. As much as 3DTV improves the viewing experience, the effects of current economic conditions will likely cause its adoption to be somewhat slower than CES’s forecast.

Netbooks and e-Readers are another important and interesting mainstream trend. Shawn and Ben stated that the “US Netbook market doubled in 2009 and will double again in 2010” and that the “e-Reader market will double in 2010 and double again in 2012”. It is my opinion that there will be such a convergence of the Netbook and Notebook market that it will render these pure categories meaningless. I believe that Netbooks will integrate e-Reader capabilities and visa-versa; e-Readers will incorporate computing capabilities.

This leads me to the first important oversight by Shawn and Ben; the increasing growth in the 12-14 inch notebook market. I believe onslaught of the netbook in 2009 has increased consumers’ desire to make their notebooks even more portable. This, in turn will lead to a decrease the demand for pure Netbooks. I didn’t derive this prediction based on empirical formulas, but by watching user habits and OEMs’ product lines.

Reporters are a good leading indicator of the general mobile computing market. So this year I watched thousands of journalists at CES 2010. What I observed was the adoption of smaller notebooks, with full, 24-7 communications capability, compared to previous years. Manufacturers are already filling this need, but they aren’t touting it, and as of yet, this has been overlooked as a key event at CES 2010.Reporters are a good leading indicator of the general mobile computing market. However, at CES Unveiled and on the convention floor, there were many OEMs introducing new entries into the 12-14 inch laptop space; including Asus; HannSpree; HP; Lenovo, MSI; Sony; Toshiba and others.

As I mentioned previously, Shawn and Ben found the many new strategic partnerships noteworthy, but they did not make a prediction on their significance; they should have. Take for instance Skpye’s new partnerships with LG and Panasonic, the potential growth for Skype is tremendous and a significant impact on telecoms as well. The convergence of TV and communications technologies will have a huge effect on consumers; greater than even 3D HDTV. In addition, I foresee the creation of new products and services to support this new convergence.

What actually happens in 2010 depends on numerous macro economic factors, industry decision, technical capabilities, as well as consumer choices. It appears to me that the economic condition of the past two years and the economic uncertainty in 2010, will affect consumers more than Shawn and Ben. As such, I believe consumers will become more pragmatic in their consumer electronic purchases; preferring to buy convergence hardware and software technology that provide entertainment and practical solutions.