Insight Community

The biggest impact that CES will likely cause is a negative impact to itself.  The most shocking thing to me at CES was the Gizmodo prank and the backlash it caused.  For those who don' t know what I'm talking about:

http://valleywag.com/344064/gawker-staffer-banned-from-ces-additional-sanc tions--under-discussion

Basically, some guys decided to turn off an entire wall of lcd screens at once at the CES with a little device. The device in question is something like this:

http://www.thinkgeek.com/gadgets/electronic/755e/

There are several shocking things about  the CES reaction to this prank.  First of all, CES has no sense of humor by banning this guy from the show.  Second of all, actual new gadgets exist, but many of them are not at the CES.  It should not have been a surprise to anyone presenting at CES that they need to put tape over the infared sensors on their LCD screens, because the tv-b-gone is just another in a series of ninja-style universal remote controls.  I'm sure it made everyone wonder where's the electronics showcase that has devices like the tv-b-gone.  I see this as the beginning of the demise of the CES.  People want the latest and greatest, not just another year of overpriced LCD screens and generic gadgets anyone could've bought from amazon.com/etc 6 months ago.

CES has always been a harbinger of things to come. Think of the introduction of the VCR at CES in 1970, the Laserdisc-Player 1974, Pong in 1975, the CD-Player and the Camcorder in 1981, Atari and Nintendo in 1985, the DVD in 1996, HD-TV in 1998, and the PVR in 1999. The challenge is to spot those winner's that make it big.

To make it big in the consumer sphere, means to transform the lifeworld (the daily life) of a significant group of people, so that self-reinforcing mechanisms (word-of-mouth-marketing, repeat-buying, etc.) kick in and an ecosystem emerges around the product that enhances the value proposition (and earning capacity) of the product.

Will it be the prezenter from E-Detail, a notebook that allows people to interact around a display from two sides? QFHD, the quadrupeling of pixels over HD-TV? The newest HD-TV/Blue Ray player? New LCD-screen dinosaurs? - Probably not. None of them have the lifeworld-transforming potential or an emerging ecosystem. So what are the candidates? - I would argue for one technology: 3M's and Microvision's personal projectors.

As soon as the problems of miniaturization, cost, and energy usage are under control, personal projectors will become as ubiquitous as camera-lenses (and it seems as if 3M has come pretty far). They will be built into every notebook, cellphone, pda, etc. The price will drop very fast due to the large volume and of being included as extra features in subsidized handsets. If one assumes that projectors will be in 80% of all handheld computing devices in 2010, then several billion projecting devices will be on the market.

The projectors themselves will most probably become a commodity, however, the ecosystem built around them is where the action will be. However, if one (or several players) are able to put together a product that can capture consumer mindspace, it might make all the difference.

• If we think back to the early MP3-Player market, it was not clear if the product would become part of the commodified PC-Industry or develop into a stand-alone ecosystem, as it did when Apple entered the market.

   

• If we think back to the early digital camera market, it was not clear if the old players of analog photography had a chance to survive in the market (in the end they did, even Leica).

In the case of the MP3-Player market it was the combination of pretty standard hardware (the ipod) and an amazing interface (the reinvention of the wheel plus itunes) that made all the difference. In the photography segment it was the knowledge of lenses and the strengths of the stories older analog companies had to tell that carved out a market that transformed the lifeworld of consumers and created billion-dollar-ecosystems. So some of the questions to ask, for anyone interested in projectors are:

Can we put together a piece of hardware that looks so compelling that consumers will want to carry it as a standalone device? What would the integration of hardware and interface (touch and feel, software) for a projector look like? Who should do it? What firms will profit indirectly from ubiquitous projecting? - youtube? facebook? google? your utility? What will a projecting lifeworld look like? What will people do? How will it transform them?

One of my observations at CES 2008 was that attending the event this year may actually have given me *fewer* insights about trends and products than I would have obtained from reading a few hundred of the tens of thousands of press pieces from the 4500 press people and bloggers covering the CES mega-event, which hosted some 2700 exhibitors from around the world.   That said, most of the blogs and press tended to focus on the handful of big, exciting, glamorous, or quirky new products rather than an uninspired mainstay of CES - row upon row of small exhibitors featuring cheap iPod cases, batteries, modest quality hardware, and more robotic vacuum cleaners than you could trip over in a day.  

For me even the many (ie thousands) of "new, improved" high definition TV and TV screen technologies did not approach anything you'd call "inspired" with the exception of the large high resolution *curved* monitor from Dell/Alienware, due out later this year.    I would say this type of computer/human interface innovation is important as it is very representative of two key trends: "gaming" and "more natural interfaces" which are discussed below.

Observation:  The Costs of Culture.   Passing a very large display with very small computing devices, I tried to strike up a conversation with the staff at LIME PC, a maker of a new type of very small computers using a Linux OS and emphasizing the internet as the network for applications and work processing.   The products appeared impressive, and the booth staff were cordial and tried to answer my very simple questions, but the language barrier made it almost impossible to communicate effectively. Add to this the fact that that wireless connectivity was down for their exhibit area (I think due to no immediate fault of LIME PC).  But it was their fault that the showcased devices were novel enough and resolutions set super high such that navigation was almost impossible for a demo user, so while the showperson kept prompting me to "try it" that was confusing and hard to do (actually impossible because I kept getting connectivity errors).  LIME PC must have spent more than $100,000 on travel and space and staff time only to have a presentation of marginal value that may even have diminished the product in the eyes of potential resellers or partners. 

The moral I took away from this, plus observing the hundreds of very small exhibitors from Hong Kong lined up together in a special area at the Hilton venue with what looked like very marginal visitation per booth, was that these small and moderate sized companies appear to have some significant challenges effectively communicating with their potential US markets and marketers.   How does this lack of cultural compatiblity affect the market?   It's a negative thing for the companies that fail to adapt their communication and presentation styles to the needs of a global market (e.g LIME PC), but very positive for companies that bridge this cultural gap, facilitating transactions between US and foreign markets, especially in the new tech powerhouse of China but probably throughout the world as well.   

It's a stretch to generalize too much from such a limited experience, but there were indications that multinational companies will have an edge over smaller companies because they can afford to maintain offices and staffs in many countries, overcoming the cultural barriers both internally and externally.   Without much supporting evidence (though this does appear to have become something of a pattern in US Venture circles) I'd speculate that this cultural globalization challenge could lead to an optimal strategy for small innovative companies to seek getting scooped up by the large ones once their products have been tested but before they've been launched in a big way.  ie we'll see a trend to fewer international companies that rise to huge prominence but more very small companies that either die or are aquired earlier in the business cycle.    There are other reasons I think this will be a trend, but the CES cultural challenges supported this idea as well.

Observation:  Developing Countries:  Potential Tech Breadbaskets or Tech Basket cases?    For me the new developing world tech focus was the most interesting and morally significant aspect of CES.   This was the first time a head of state had attended the conference, and somewhat conspicuously it was the President of Rwanda.   Increasingly technologists and technology companies - especially the huge ones like Microsoft, Cisco, and Google with Google.org, are embracing what Bill Gates recently spoke about in Davos - a  new and "kinder" form of capitalism where companies seek opportunities in the developing world that make "win win" situations for the company and the poor people served by the technologies.   

Is this more than big company philanthropy?  Yes, very much more.   This is an important paradigm shift in the way the first world will come to do business in third world.  CES exhibitor and presenter Meraki, facilitator of cheap connectivity via mesh networking, was for me one of the most impressive CES companies.   Under brilliant leadership and with substantial new venture backing, I predict that Meraki will best Google in creating a profitable San Francisco mesh network over the next few years, and within a decade Meraki is likely to become one of the key players in global connectivity.  

Eventually, trillions of dollars of market capitalization rest on how these win-win situations shake out for the developing world.   However, the markets in the developing world (not to mention the developed countries) are too unstable and unpredictable to let us know how this will all shake out.    Noting how many tech folks clearly and deeply resent the Gates vision of new kinder capitalism (feeling he's either insincere or hypocritical or both), there is some resistance to these changes but I'd argue they are almost inevitable as the world is increasingly connected and business morality plays an increasingly powerful role in business circles.   Unlike past corporate philanthropy which was US focused and therefore not very leveraged, the billions spent in developing regions will have a MUCH greater human impact.  

Arguably, the global corporate focus and "The World is Flat" trends detailed by Tom Friedman are the most significant global social trends in history.   How it will all shake out is impossible to predict with any precision, but it now seems likely that US Economic Global Hegemony is waning, and could even end within a few decades.  Also that China's stunning growth could lead to a China-centric global economy.   I do not think this is "likely" very soon, but I think it is likely that China will continue to manage her economy aggressively using fairly ruthless old-style capitalistic traditions that one only finds, quite ironically, in this modern communist regime.   India will also regain the global economic prominence it enjoyed some 150 years ago, but at a slower pace due to the incumbrances of a huge Democracy, decentralized and corrupt bureaucracy, and complex cultural traditions that seem to inhibit economic innovation and growth in India more than China.

Major Internet and Economic Trend:  Multiplayer Gaming.   MMO Gaming sessions combined with the huge interest and enthusiasm about the gaming exhibits at CES to solidify my view that gaming is arguably the most significant of all online and possibly also mobile trends, perhaps to become even more important than search.   ARS Technica recently had a nice piece comparing the gaming market to music and to movies, noting that gaming is growing much faster - at a remarkable 27% growth rate - and already is in the same revenue ballpark as music and motion pictures.   If you include console sales of over 9 billion, gaming's total of over 18 billion revenue for 2007 is about the same as movie and music revenue ... combined.  (Caveat here would be that they don't include music or movie hardware sales, such as DVD or IPODS, in the movie or music numbers).

Relatively few companies appear to be watching the gaming market closely with an objective stance.   The lack of broad, high quality sources of information about the gaming market is surprising and may present a big opportunity for a specialized analytical group.    Gaming is not only relatively new, it offers a dramatic number of moving targets in terms of analysis.   Console vs Online gaming and Free vs Subscription gaming to name but a few.    An obervation I heard in the MMO gaming panel suggested that the now critical distinction made between console games and free online games will break down fairly soon.   I'm skeptical, and think this distinction may persist for some time in large part because the forces marketing these types of games are different.   I don't think Microsoft, a major console and console game force, will work hard to create a (significant) free online gaming empire anytime soon even though they are in a position to do so.    Therefore I'd suggest we'll continue to see a market dominated in large part by consoles and complex, expensive boxed games with subscription revenue sources, but also see a powerful trend among smaller companies to create free and easy PC and mobile gaming that is monetized by micropayments for game features like weaponry, avatars, clothing, gifts, etc.  The MMO panel noted that on average this type of game can monetize as well per month as subscription games, yet offers the company more easily scaled infrastructures, updates, and game marketing options.   Notable in this are is the game Maplestory.    How to profit from this trend?    I'd say look for the next Maplestory, Runescape, or Counterstrike - free online games that tend to grow fast and involve huge numbers of players for extended periods of time.   Unfortunately there is not much tracking of these game usage trends, but this is another opportunity for companies that become expert in that area.

Innovation awards as investment advice:   
The scale and impact of the CES event is so large that innovation awards - both from CES and many other parties - can offer a sort of "wisdom of the crowd" way to glean information about potential winners in the crowded field of technology companies.    Here's the list of CES Innovators who won awards in several categories.   Obviously an award is unlikely to have a huge impact on major companies like Dell, but for small innovative companies like DreamFlyer the CES innovation award and exposure may indicate good investment potential.   I found Dreamflyer particularly impressive given that the cost was some one fifth the cost of what seemed like a somewhat comparable (though clearly more elaborate with more moving parts and larger screens) driving simulator device from D-Box.   Regardless of the niche, I think the optimal investment equation would be to find companies just under the knee of their growth curve, and small company CES innovator award winners would be a potentially fertile ground for this. List of CES Innovator winners.

Trend: More Natural Tech Interfaces.
G4 (the TV tech and game channel) best of show innovation award went to a very small company called Lightglove http://www.lightglove.com/ .   If I was looking for the next 'hundred bagger' company this would be the type of development I'd want to see - very small, highly focused and innovative companies working the gaming space with technologies that will make the gaming experience more "natural".    Another impressive company was Bug Labs, one of the first to use Google Android in their innovative and interchangeable multi function PDA/Phone/GPS modular device.

As Bill Gates noted in his CES keynote, the "second digital decade" will see people moving away from the keyboard to more "natural user interfaces".   This potentially huge shift in hardware navigation will include things like surface computing on a computerized table (which Gates demonstrated at his CES keynote), the Lightglove mentioned above, and improved speech interfaces.    One impressive speech innovation demonstrated at CES was a step closer to the "Universal Translator" of Star Trek fame.  Here's a CNET story about that translator, called Compadre from a company called SpeechGear.   I think Compadre, like several video viewing eyeware products at the show, may not quite be ready for prime time due to some human interface and technical challenges, but the trends in this area are certainly significant.  Franklin is another company making excellent progress with personal translator devices.  

Innovation in this area is also happening with what are probably the most logical translators - mobile phones.   Within a year or two I'd expect to see a mobile handset into which you'd speak in one language and have it output audibly in another language, effectively overcoming the language barrier for travelers.    Nokia has been experimenting with phone language interfaces, though not with anything this dramatic yet.

Trend:  Car as Computer.

GM CEO Rick Wagoner unveiled the new zero emissions Cadillac Provoq at CES.  He also made a point of noting that the automobile is in many ways a large, drivable computing device.     The US Auto Industry is in dire straights right now and I certainly would not predict great profits ahead, but in general terms I think it's clear that the automobile will continue to a key area for innovation in technology, especially for geolocation devices, mapping, satellite radio, and some mobile applications.    As noted above the investment potential here would appear to be with the clever upstart companies that offer the big players a major innovation through an aquisition play.  

This is a great question for me, because I went to CES on a press pass. I toured the show, the parties, and the special press events, and took deliberate notes in preparation for a CES debrief session I moderated for the Telcom Council of Silicon Valley, and sponsored by Norwest Venture Partners. I'll share my observations here.

The truth is my notes were taken on my smartphone using Microsoft Notes, which integrates pictures into the notes. I then edited the text on my PC. But getting the pictures into the blog here is very diffcult for me, so I have posted the notes below with the associated images as a .pdf file at this location. Just click here to see this answer in all it's visual glory.

Expensive Copper Wires
Monster started this trend (to my knowledge) but is no longer alone in the market it created. Now, branded, so called "high-end" AV cables are a growing market.  A lot of show floor space was dedicated to various forms of high-priced conductors, and with a Lamborghini in the display, you know it must be a valuable product (sarcasm).

Other high-end connector companies included: Audioquest,  Kimbercable, WBT, and believe me, too many more.

For fun, check out the "KimberKable GG-Mini". It's bigger than the electric supply cable to my house!

Just as lotteries are a tax on people not good at math, high-end cables are a tax on people not good at engineering. These things are proven to do almost nothing for fidelity, and absolutely nothing when digital content is being transferred.

Bluetooth
Bluetooth continued it's growth as evidenced by the show trends. No longer a high-end option, BT isn't even mentioned as a basic feature of every mobile phone.  But BT technology showed up in an assortment of new places, too. The in-built automotive deployments were very visible. The hands-free push (California law July 2008) seems to be producing a crop of visor mounted options, and other aftermarket solutions for cars.

Above is an A2DP receiver, into which one can plug their favorite wired headphones and still connect them to their phone or media device wirelessly. (Source: WirelessWeek)

A2DP Bluetooth Stereo
A2DP, the technology that provides stereo BT streaming has started showing up in significant products that stream music into cars, home stereos, and a variety of headphones. There is a trend towards integrating the BT phone headset with audio headsets, which will only grow as more and more mobile phones are capable of good music reproduction, and as more and more portable media players get A2DP-enabled.

Two new phones from Ericsson illustrate the future importance of A2DP, the Walkman 760 (tri-band HSDPA, built-in GPS, a 3.2-megapixel camera and 1 GB external memory stick) and  the W350 (EDGE connectivity, music controls on the outside of the handset, a 1.3-megapixel camera, a 512 MB memory stick and 14 MB of internal memory.) Motorola showed a new ROKR for music fans.

Headphones
Headphones are a funny product. There have always been the $300+ models for audiophiles. But in the 1970s, all headphones were of the large, over the ear type. Then came the walkman, and the earpad, metal bracket phones became the standard. Then earbuds made a splash, and the mass market really stayed with the buds for a couple of decades 80s -  today.

But what I'm seeing in the field, and at the show, is a trend back towards larger, higher-fidelity, over the ear "muffs" that block external noise, and provide truer audio -- at the expense of being harder to carry. What's more, the price of a pair of earbuds had pretty much bottomed out at $0, but people are proving willing to pay $100 easily for earphones that deliver perceived quality.

The drivers of this trend back-to-big might be the growth and entry of numerous models of noise-cancelling headphones, which people found deliver far better sound than the earbuds, so they start to use them off of airplanes, OR it could just be part of a stylish trend, where youth are choosing to wear bulky headphones to advertise that they have the coolest iPod, and are too cool to listen to you…or traffic.

Big earphones are becoming a fashion statement, much like other bling, the coolest mobile phone, or fashion. This category follows the iPhone example that people have money to spend on CE if the marketing is done right.

GPS 

You'd have to be blind…or lost, to miss out on the explosion of offboard GPS devices on display at CES. The latest developments are integration of traffic data, speech recognition, lower entry prices, and OEM integration. The auto vendors have begun in earnest to simply outsource the SatNav to Garmin (and others), and focused on providing docks in the cars for these devices.

Of interest to telecom is that many of these devices are now connected so that they can provide map updates, traffic data, communicate lat-lon upstream, provide geo-fencing, and provide useful features like real-time cheapest gas prices, and hotel rates. I'm less excited about weather, stock prices, and other tripe from MSN direct.

A few GPS vendors are offering web services mash-ups, like Garmin with integration of Google local search.

Also in the GPS category, there were a few "dog" tracker solutions, and "elder" tracker products. Don't forget this is consumer electronics, so this stuff is priced a lot cheaper than enterprise grade fleet tracking. I've seen devices backhauled by telcos (AT&T, $12/mo on a $50 product) and by satellite. I expect the low-battery consumption and performance of the latest Sirf chipsets is partly responsible for the surge in these devices, but it is probably also a function of the next topic, radio integration.

Cellular Radio Integration
It used to be (especially in the US) that if you wanted a cellular account, for any purpose, you were free to subscribe to one from the wireless telcos. $30/mo plus this, plus that. No matter if your product wasn't even able to transmit voice. The carriers thought of accounts only one way. It was like AT&T before the XXXX that allowed free thinkers to invent fax machines and modems.

But the trend is shifting, because of many greater trends that you all know: MVNOs, market saturation, "Open" movements, telematics growth, better data networks, etc. Now, carriers are finally more interested in striking deals that have some kind of mobile data radio and service integrated into the product. A great example is the Amazon Kindle, with the Sprint EV-DO radio installed, and the network traffic  fee integrated into the price of books.

So we see new kinds of MVNOs, like the above mentioned dog tracker GPS, which uses AT&T in a data-only capacity, but bills it from the dog tracker company. SatNav companies are starting to integrate radios in their devices.

Integration isn't limited to cellular, though, as Panasonic partnered with T-Mobile and the Google on a Wi-Fi camera. The camera is designed to automatically log on to a T-Mo hotspot and upload pictures to Picasa. The camera comes with 12 months of T-Mo access included in the retail price, and users will need to subscribe after that. So, who wants to bet that Picasa starts to have a disproportionate number of photos of friends hanging out at Starbucks?

Below in this document, we talk about how Xohm has enlisted partners such as ASUSTek to integrate WiMAX radios in devices.

HD DVD next to Blu-Ray
The conference organizers must enjoy irony enough to put the HD DVD guys right next to the Blue-Ray camp. It was fun being able to look at both booths at the same time, with both claiming to be the way of the future…can you see the logo on Blu-Ray in the photo below?

Pre-show, Warner dropped the bomb that it would support Blu-Ray exclusively. By mid show, MSFT had renewed support for HD DVD.

But the skinny is that Paramount is considering dropping HD DVD (Toshiba with support from Universal Studios, DreamWorks, and Paramount) in favor of Blu-Ray (Sony with support from Warner, Disney, 20th Century Fox, and Metro-Goldwyn-Mayer). That would be the end of HD DVD.

Well, they lost with Beta, their audio codec, the memory stick…but it looks like Sony might win this one. Good, the sooner this war is over, the better. Next battle, getting rid of DRM.

iPod Dominance
Lots of people have speculatd that as DRM-free music emerges as the format of choice, Apple's stranglehold on the digital music sales business will be threatened. I think this is pure fantasy. Sure, for a long time, the fact that Apple iTunes Music Store purchased music is locked, and only usable on an iPod was the reason "once an iTunes customer, always an iPod customer". But there is now a bigger reason why Apple will remain throned as the "OS" of mobile music: third party hardware.

The sheer square footage at the show devoted to all forms of iPod adapters, plugs, chargers, accessories, speakers, media gateways, remoted, extenders, etc. is forboding. I own a Creative MP3 player, and I can't find an accessory in a brick and mortar store for the life of my, but if you use an iPod, you can get accessories at the Kwik-E-Mart down the street (no joking, convenience stores carry iPod chargers and car adapters). At the show, the iPod is entrenched in the simplest chargers to the most luxurious cars. Car makers don't want to have to adapt to a competitive media player market - they like it that they can offer an iPod dock, and check the "We're hip" box on the todo list.

Yahoo Mobile Widgets
Yahoo has launched its open mobile platform with Yahoo! Mobile Widgets. They aim to make it easier for content developers to build mobile content and get it to customers. As an occasional developer, let me just say, "Thanks".  I was bogged down coding for BREW, J2ME, Symbian, Windows Mobile's 4 versions, OpenMoko, Linux, Android, and iPhone, and was looking for another platform to simplify my life.

It's not going to be platform developers offering another platform that makes things simpler…it's going to be device makers standardizing on certain platforms. If there's one thing the mobile platform space has taught us, it's that the world of desktop Windows dominance isn't so bad. This isn't a credit to MSFT, but a credit to all the users who have inherently agreed to work on the platform

WiMAX
While Sprint is struggling with the reality of WiMAX, some vendors on the show floor seem wedded to the excessive hype rhetoric of 2003 - 2007.

Back to reality, Sprint laid out its Xohm progress, saying it had launched Chicago, Baltimore, and DC networks to employees in December.  Sprint announced a set of partnerships as the service is set to go commercial, including Amdocs, McAfee, and more.

CPE announcements came from OQO, makers of an ultra-portable PC, ASUSTek will make embedded devices, as well as Zyxel and Sequans. I'm not sure why we didn't hear anything about Motorola or Samsung CPE.

Above is a photo of the Xohm CPE that was displayed at CES. It is a large, obtrusive, two paddle antenna PCMCIA device.

WiMAX and GPS
 Networks In Motion (NIM), the award-winning wireless navigation and location-based services (LBS) company, today announced that it is demonstrating a WiMAX connected navigation system solution for consumers at CES 2008 in Las Vegas, Jan. 7-10.
 
 This ‘proof of concept’ is similar to installed auto navigation devices, but with the ability to access real-time location-assisted search and travel information. NIM is working with Intel and Motorola on the off-board navigation technology that uses WiMAX for wireless data access and may soon be available on touch-screen PCs installed into vehicles.
 (source:  www.lbsglobe.com)
 
Power Factory
It's no secret that battery power is not keeping pace with mobile device functionality. Despite more efficient processors, the demands on mobile phones are increasing so rapidly that battery life is dwindling. With people talking more, texting more, watching video, listening to music, taking pictures, using screensavers, playing games, etc. we are seeing dead batteries on a regular basis.

What's more, as the demands on our phones have increased, so, too, has our reliance on the functionality the phones provide. Thus, sitting in the airport with a dead Blackberry is a crisis situation for a mobile professional, whereas 10 years ago, being out of touch was the status quo.

As proof of the trend, I submit to you a service from perennial airport racketeer, SmarteCarte. Yes, the same crack dealers who gouge you for $3 when you can't carry all your baggage have now noticed a new opportunity to exploit the weary traveler, and our airports have been more than happy to comply:

The ChargeCarte kiosk offers recharge power and multiple device tips at critical locations in airports. The rate is $3 for 30 minutes, which will give most devices a good charge at 1A current. And very a propos, uses embedded cellular technology for credit card processing.

So the result of this trend, is a slew of CE accessory devices intended to provide backup power, mobile power, car power, airplane power, flexible power, power to multiple devices, and on.

A common product at the show was a charger/backup about the size of a deck of cards, which used either disposable AA batteries, or internal NiMH batteries to offer 5V USB-type output, which could charge most recent mobile phones. An assortment of bundled tips is augmented by web-sales of additional tips to fit any phone.

This OEM has simply licensed the Duracell brand for their AA phone recharger.

More 3rd party power solutions:

"Cell phone accessories are a $1 billion-plus business per year in the United States, according to a Yankee Group study, growing 10% to 15% each year. As people buy replacement phones rather than first-time products, they know from experience they’re going to need an extra battery or car charger. Still, some industry veterans say a whole lot more money could be made in the accessory space if only more sales associates were properly trained and motivated." Pasted from <http://www.wirelessweek.com/Article-Accessories-Chic-Geek.aspx>

One solar-charger for the mobile toy, Sony Playstation, would require a user to play the device upside down to actually get any charge from the sun.

My favorite of this category was the Duracell DRUM130 branded product, currently available through dell.com, that has a power brick from a laptop, multiple laptop tips, 130watts of charge, small size, a built-in USB 5Voutput, and inputs for 110-240v OR 12V car or airplane, all in the same small unit.

Telecom companies that want to push the use of mobile content and services should be well advised of the power consumption risks of such use. Solutions need to be provided, and battery tech just can't keep up. Thus, we advise standardized mini-USB ports (which enable power sharing among subscribers) and the possible supply of a power booster with high-end products.

Wireless Accessories
But power is not the only growth accessory category for mobile telecom. People are increasingly buying a whole outfit when they leave the store. Bluetooth headsets, in car chargers, and memory cards are all potential upsells that can both provide increased retail revenue, and a better user experience.

Above, Sandisk 12GB, released at CES. Gives a device "more memory than iPhone"…at least until the next iPhone!

Jump the Shark Award
OK, when do you know that Crocs are a fad…and a fad that's gone too far?

I think it's when they make a "sandal" for holding mobile devices called the Crocs-o-dial.

A Picture Tells A Thousand Words

Which companies were hot, and which were not? Let's just let the pictures tell the story. Above you saw a picture of the hall with HD DVD and Blu-Ray. Crowded. The taxi lines and bus lines were insane. This was the crowd waiting to see Yoko:

And this was the crowd at the AOL pavillion (same time 4PM, Monday)

Yes, the walled garden model is alive and doing well, thanks.

for Wireless and Telecom
www.kertongroup.com 408-935-8702
__________________

If you stop and think for a second, CES pointed the way to good investment opportunities that are just over the horizon.

The secret video revolution Investors already anticipate America's 2009 transition to digital TV signals — but CES helped flesh out the shape of that inflection point. Everyone will be purchasing new TVs and thinking about the picture quality, and HDTV vendors realize this is their best opportunity. (At CES we saw Panasonic's "Life Screen," a giant 150-inch plasma screen, but also several vendors with "video eyeglasses".)

But that won't be the only thing driving interest in video. Once a program is digital it can be displayed on nearly anything — TVs, computers, PDAs, cellphones, eyeglasses, maybe even digital wrist watches. (To a certain extent, that's what the Writer's Strike was about.) When consumers have the ability to watch video, even in mobile settings, they'll become more interested in video.

Here's where it gets interesting. It's not just the screens that are being miniaturized, but also the cameras. At CES, Vievu demonstrated a tiny personal recorder with a flash drive holding four hours of video. Justin.TV has been arguing that it's only a matter of time before people catch the urge to start creating their own personal reality shows. The technology is there, and the new video-hungry audiences will also be there. One "breakthrough star" could trigger a mass awareness of the potential of this new platform. The real challenge is identifying who would benefit. I'd say it's the last, best chance for a competitor to emerge to YouTube. If not under-capitalized Justin.TV, then maybe Joost can emerge from the pack and prove they're the cool destination for homegrown reality video.

The ultimately mobile platform is automobiles. CES included a demonstration of a THX sound system for your car. Following the lead of satellite radio, technology vendors have realized that the best distribution channel for high-end items is automakers. It's a mutually beneficial relationship, so it suggests a bright future companies that can create (and successfully market) a breakout automobile accessory. But it may also suggest a slight uptick for automakers in sales or revenue.

Everyone wants touch. The iPhone really did shake up the cellphone market. (The Skype Phone is really coming!) But a less-noticed change has been that touch screens are now the new industry standard. Microsoft Surface (demo'd at at CES) will be released this spring, and most of HP's PDAs will now include a touch screen. Even Palm is becoming more touchscreen-oriented.

There's an obvious investment opportunity if you take one step back. Who's making the components for touchscreens? Small parts vendors like KeyTec. With some research, investors can get in just before the massive migration to touchscreens begins.

There's other random observations. The CD is dying. Mike Temporale noted on his smartphone blog that most of the exhibitors now distribute their promotional information with USB memory keys. And thin is the new form factor. (MacBook Air isn't the only one; Sony continues to impress with its talk of flexible OLED screens...)

Apple has obvious made a big splash with its sleek and video-ready iPhone. But investors know that after the big splash — look for the ripples.