The faithful, thousands of consumer electronic companies and distributors, gathered in showy Las Vegas last week. Backed against a wall, they had but one goal: to come up with ways that would allow them to survive the inexorable march of the smartphone.
It is ironic that the International Consumer Electronics Show (CES), which was once a prophetic peek into how the world of technology would unfold, now faces an identity crisis. Smartphones and tablets, the current face of consumer technology, have started marching to their own tune — with companies such as Apple, Microsoft, Nokia and Google preferring to stay away from CES. These companies now follow separate launch cycles and subscribe to an altogether unique ideology.
In retrospect, it is easy to recount how the modern smartphone, tablet and laptop obviated most of the consumer electronics industry. One by one, devices like the pager, the MP3 player, the point-and-shoot camera, the voice recorder and the calculator fell by the wayside. But behind this onslaught is a simple truth that defines both human nature and the consumer technology business; a truth that companies such as Intel and Sony are slowly learning. It is in the natural order of things for humans and consumers to simplify, to strip down, and to render unnecessary.
Futuristic animated television shows such as The Jetsons depict a world where each human being buzzes around in a spaceship with a host of gadgets, with each device serving one purpose. It is safe to say that companies such as Sony, Kodak, Sharp and Panasonic subscribe to The Jetsons view.
This, however, could not be farther from today’s consumer technology, where the rise of networking communications lead to two or three devices (the smartphone, the laptop and the PC) being ‘just enough’ for the majority of consumers. The other multitude of devices were either simplified, stripped down or rendered unnecessary.
In fact, barring niche categories, it appears that an end-game is rapidly approaching, where there are a maximum of three hardware categories that can justify a ‘mass consumer electronic product’ tag. They are: the smartphone, the tablet and the laptop/PC. Why is this so? Mainly because these three devices satisfy the portability and productivity conditions that are now mandatory requirements for any consumer electronic product.
Portability is critical to the modern electronic device and even within this condition, there are two categories: devices which are ‘always with the consumer’ and those that are ‘not always with the consumer’. In the former category, the modern smartphone dominates. They fit perfectly into a person’s pockets, and, in fact, there are very few situations in which a consumer does not take a smartphone with him or her (places such as the bathroom and shower and so on). The productivity benefits that a laptop/PC grant a consumer allow it to exist, despite its portability factor not being as good as a smartphone or tablet.
Where then is there place for a new hardware category that can beat the productivity of the modern laptop/PC or the portability and productivity advantages of a smartphone? Why would one expect Intel’s smart-wearables or Audi’s car tablet, both showcased at CES last week, to gain consumer acceptance? It doesn’t simplify. If anything, it becomes yet another device that requires constant care and charging.
Ignoring human nature
The answer lies in an industry that often ignores human nature, which goes against our damning need to simplify — the world of fashion. The mantra of ‘simplify, strip and render unnecessary’ clearly has no place in an industry that tempts women into buying ten different pairs of shoes or men into purchasing seven different watches. In other words, the nuances of what makes Gucci, Dolce and Gabbana or Louis Vuitton tick have lessons of import for the consumer technology industry.
Intel’s widely-awaited keynote saw CEO Brian Krzanich bite the bullet and announce partnerships with fashion design house Opening Ceremony and luxury retailer Barneys. The initial success of the partnership will be seen when Intel brings out the smart bracelet that it is designing along with Opening Ceremony. Other companies have followed suit, in some fashion or the other. Sony has its ‘wedge’-like TVs, Toshiba has its shape-shifting ‘5-in-1’ PC and Cisco has its ‘Internet of Things’ concept — all of which seek to put most of the new products beyond the conquering gaze of the smartphone.
The story is slightly different for auto manufacturers such as Audi or Mercedes Benz, who are quickly realising that, as Marc Andreessen put it, software is eating the world. It is software that runs engines, that guides drivers to their destinations, and allows car passengers to connect to mobile and GPS networks. At the heart of this is the modern smartphone. (As a case in point, nearly 30 per cent of the costs of putting together a car now come from electronics.) The problems that face consumer electronic companies are ones that similarly dog auto-makers.
This year, therefore, will see consumer electronic companies try to reach for profitability in areas that are not the smartphone, tablet and laptop markets — primarily through products like wearables that seek to build on the smartphone ecosystem. Whether this will be enough to shake the hegemony of the smartphone remains to be seen.