CES 2008 - Big themes

When my flight from Las Vegas touched JFK airport late last night, in addition to being over-exhausted, I realized that this was my first CES ever when I did not hit the tables at all. Main reason being NBC Universal's big debut presence at the show (more on that later).

I thought CES 2008 was less about unveiling disruptive new technologies and path-breaking announcements, and more about moving closer to the long-promised vision of convergence and connected digital home. The big themes for me were:

1. IP-connected CE: Internet connectivity was everywhere, especially on TVs. Sony was the first to launch an IP-connected TV last year at CES (new Bravia TV line), along with its content partnership with AOL Video. This year, all major TV manufacturers came out with connected TVs. Announced content partnerships involved access to Web videos within a walled garden and providing users daily-use information (e.g., weather, stock quotes, etc) that can be overlayed on top of the regular broadcast video.
   
• Following the ongoing demise of the walled-garden model on the Web, connected TVs will also open up in the long run. TV OEMs will however have to first ensure that they have a solution for the problems open Web brings (spyware, viruses, etc). Consumers are not going to tolerate any deviation from their current, no-hassle TV experience (switch on your remote, and enjoy the content). It was therefore good to see that Sharp announced AQUOS Advantage service with their IP connected AQUOS TVs. The service allows Sharp reps to connect to your TV remotely and perform diagnostics, help with trouble shooting, provide product information, FAQs, etc.
• Connected TVs threaten the traditional MSO distribution model by providing a bypass solution. This can be significant, given cable companies have had issues working together with CE manufacturers, and have made frustratingly slow progress on OCAP standards, the cable card solution and in providing greater interactivity on set-top boxes.
  
  
2. Location-based services: GPS integration is getting ubiquitous (TVs, phones, cars, sneakers, dog-belts, etc.). This is going to fuel location-based services and new business models as mass adoption of GPS enabled CE takes root. Commoditization of map data is going to further accelerate this trend. We saw some activity leading up to the CES. Nokia's $8B acquisition of the map data provider Navteq late last year will enable Nokia to develop and launch end-to-end solutions in-house. Tele Atlas, the other big data provider for digital mapping services, is being pursued by TomTom in a potential $4.2B acquisition. These multi-billion dollar valuations are not justified by either company's current financials (Navteq is modestly profitable while Tele Atlas is losing money), but rather indicate bullishness about these long-promised LBS services finally seeing the light of the day.
   
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3. Ease-of-use, high-design driving consumer adoption: Cumbersome/complicated, out-of-the-box experience for new consumer technologies prevents adoption beyond the tech-savvy, early adopters. The CE industry has been infamous for failing to solve this problem. This CES, however, I saw major improvements in designs and ease-of-use with several products that were launched in previous years. This is a natural evolution in the product life cycle. It indicates staying power of these products, and will spur adoption to a point where installed base could soon cross the threshold limit necessary to launch new services for a sizable market on top of these products .
• Wireless connectivity & media transfer (Bluetooth & IR) is playing a key part in driving simplicity and ease-of-use. From home theater systems with wireless connection between all components including speakers to wireless media transfer between different boxes in the home, many products shipped this year will prominently leverage wireless connectivity.
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4. Innovation in storage: Talk about stretching the boundaries - innovation in storage has resulted in dropping prices, portability, shrinking sizes, and ever-increasing capacities. This has driven consumer expectations about how, where and when they consume their content, and enabled new business models and distribution avenues. The issue of video DRM, however, may hinder the progress, and is still searching for an elegant answer.

Now a word about NBCU's presence at the show this year. CES 2008 marks the first CES ever when a major media company made its debut on the floor of the show that is mainly known for new gadgets and technologies. The NBCU booth featured a full TV-production studio along with display of its over 300 brands and wide content variety. NBCU became the first official broadcaster of CES, covering the show live from its booth studio. NBCU also presented live reports from the convention floor by Brian Williams, Maria Bartiromo, Al Roker from the "Today Show", "Access Hollywood," Telemundo, several NBC station affiliates, CNBC Power Lunch and NBC Sports.

NBCU also held its internal leadership council meeting during the CES, attended by over 100 top global executives. Given everyone's presence, we ended up having several internal meetings as well. One of the main reasons why this CES became so taxing for me.

Learning about the evolution of consumer electronics and how users are/will be consuming content is key for any content company in the digital age. I welcome the transformation of CES over the past few years beyond consumer electronics to also cover the content that is required to experience these new gadgets. Several CES keynote speakers over the past three years have been from media companies (Google, Yahoo, CBS, Disney, etc) - none of these companies make any consumer electronics that CES has historically celebrated.

Engadget provides a good tour of NBCU's booth. You can also learn more about it on NBCU's dedicated site and blog for CES 2008.