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Beyond The CES Floor: The Digitization Of Consumer Devices

Dave Morgan
Dave Morgan  |  Executive Chairman
Published: Jan. 10, 2013

Originally posted on MediaPost

For folks trying to understand consumers and marketing and the future of electronics and technology, Las Vegas and the mammoth CES took center stage this week, just as in years past. Everyone wants to know (at least, according to the pundits) about the next smartphones, tablets, connected TVs, 4K TVs (four times more pixelization), handheld gaming devices, music players, smart forks, cars that drive themselves, programmable drones and 3D printers that can output everything from car parts to animal organs. More than 150,000 people from around the world come here to see these products.

I am here because I believe that understanding the transformation of consumer electronics is critical if you run any business today. I am also here because the world of media, advertising and marketing has recognized the show's importance and have descended en masse, with no small thanks to the work of groups like Medialink to build great programming and parties; media agencies like Publicis/Vivaki, IPG Mediabrands and WPPs Group M, who convene their clients here; media owners like Scripps Food Network and CBS/Cnet, with strong, on-site presences for their companies; and trusted individuals like Jack Myers and Shelly Palmer to help summarize and translate what happens here.

Of course, it's not just what happens on the exhibit floor. A lot is happening at informal meetings, meals and parties. After checking out the floor and the informal scene, here are some of my early, high-level thoughts about what all these technology developments might mean:

Internet as omni-utility for life and devices. You don't need to see more than the smart fork to realize that we are finally seeing the manifestation of the Internet as an omni-utility, digitally linking all electronic devices in our lives together and enabling them all to be smart and operate in a coordinated fashion. Plug-and-play interoperability driven by Internet protocols is now becoming the norm. The device-to-device Internet -- within the home, between the home and the car, between the home and the car and your mobile devices, etc. -- will be an enormous growth area over the next five years. It is critical to see the emerging connected devices not just as media or marketing channels, but as powerful consumer utilities. We have barely started scratching the surface of understanding what that will bring.

The true power of smart, connected TVs may be in their back-end, not front-end. TV-based apps are not yet a story for marketers -- consumers barely use them at this point -- but most of the major TV manufacturers are deploying opt-in anonymous video/ad viewing and direct video/ad viewing measurement within millions of the devices. This will transform TV and cross-platform measurement, encompassing not only better multichannel TV measurement, but linking it to all DVR, VOD streaming, and IP-based Web and mobile browsing and e-commerce.

Mobile apps are more important for TV viewing than TV apps. Watch carefully the growing sector of TV-related apps on phones, tablets and PCs and their ability to enhance the TV viewing experience -- for example, Twitter, GetGlue/Viggle, Shazam, etc. Also, were seeing the emergence of apps that are making mobile devices serve as TV remote controllers. All these apps will probably have a much bigger impact on TV over the next year or two than any apps on the TV themselves.

Consumer electronics companies may have challenges getting media. Many folks are wondering whether consumer electronics companies like Samsung, LG, Sony, Intel, etc. will be able to execute against the data and device-driven digital media strategies that they are rumored to be pursuing. Most folks believe these companies are chasing these new strategies because they have to 1) keep up with Apple, and 2) find a way to enhance the anemic margins that they get out of hardware alone. But none of them have shown an ability yet to execute well in the intersection of hardware, software and media. Sony, for example, has never been able to build synergy between its media and consumer electronics divisions, despite having market-leading positions in both for decades.