CES 2016: The Autonomous 4K VR 3D IoT Drone Awakens David BerkowitzCMO, [email protected] / @dberkowitz

The Presentation inside:

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CES 2016: The Autonomous 4K VR 3D IoT Drone Awakens David Berkowitz CMO, MRY @mry / @dberkowitz

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About this report Included here are a series of thoughts and observations about CES 2016 – the annual Consumer Electronics Show held in Las Vegas. This version is still a draft, published more to be fresh than thorough (or even copy edited). The most important section is on Trends and Themes. It isn’t fully developed, but the thought-starters should paint some picture of what mattered this year. Beyond that will be some examples of ‘life at CES’ followed by the fun meat about the most important announcements and exhibitors. Some commentary appears with those too. Sources are constantly cited in the bottom-right corner and in the notes field, especially for any content that isn’t purely my commentary and photography. Some great resources are listed at the end. Click them for more detail and for some excellent reads. Thanks for taking the time to relive CES with me and spend the rest of the year figuring out what it all meant. Having attended for ten consecutive years, I’ve been wrapping my head around it for a decade, but with a show comprising 20 million square feet of exhibit space across all that time, I know I’m just scratching the service. I hope to hear some of your thoughts as well; send them on over. David Berkowitz CMO, MRY January 7, 2016

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Table of Contents Trends and Themes An Inside Look at CES Spotlight on… • Transportation • Drones • Internet of things • Wearables • Virtual reality • Video Reference / Contact

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Trends & Themes

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Note… draft ahead Following 2 slides with a master list of themes from this show, some specifics appear, but many are missing. More will be added, so bookmark the link or follow me on SlideShare to receive updates. Or just email me, [email protected], and I’ll send you the final version.

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Trend/theme review (part 1 of 2) Below are initial thoughts on major trends and the themes – more ‘back of the napkin.’ This will be updated with more specific example of most or all of these, so stay tuned for new versions. Partnership announcements trump product launches, as partnerships get more pronounced What’s driving most of the partnerships? Signs usually point to data Automotive is eating CES – a trend years in the making, but especially prominent in 2016 Transportation overall a huge theme, with focus on cars (especially autonomous and/or electric) and drones China steps up not just presence but design and style Typical device pricing focuses on value: more benefits (entertainment, health, time saved) for more cost Many of the biggest hits to emerge won’t be products that get most buzz in tech press but will meet most people’s needs. It’s the difference between 4K TVs (a nice-to-have upgrade) and washing machines that can do multiple loads at once or both wash and dry clothes (anyone who does laundry will at least consider buying it if price is right) 2016 is important year for VR but scale will come later; best VR now requires more powerful computing, and lower-end risks having novelty wear off 3D printing became marginal at CES; B2B applications remain tremendous but value proposition, price, and speed haven’t made it accessible to most consumers

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Trend/theme review (part 2 of 2) ‘Public CES’ and ‘Shadow CES’ keep diverging as ‘Tech South’ becomes more of a thing Brands, agencies, publishers, ad/marketing tech remain practical, with a bit of education on what’s next (eg VR, new developments in mobile) but huge emphasis on what can be done this year Disconnect is also prominent from major media / tech companies, choosing to emphasize ad products even when they have interesting tech products Unfortunate silos as ‘Public CES’ is largely for creatives, ‘Shadow CES’ is more for media; biggest question is who in years ahead will bring those closest together The fun is fading from the floor, even in once-happening areas like Eureka Park, as lots of big partnership announcements and data land grabs don’t lend themselves well to flashy demos Trade show environment not best way to experience self-driving cars, drones, even VR (long lines for short, limited demos); reinforcing CES as a teaser to whet appetites, not a way to experience what’s next Live-streaming from mobile apps a hot topic but not a new one; UX and bandwidth are much better. Previous limits included getting on show’s spotty WiFi or bringing own network; now LTE can support it (if you have a generous data plan) When are we going to see a ton more robots? Surprised demos remain tame in this regard

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1) Partnership announcements trump product launches Automotive partnerships alone were coming out constantly: GM $500 million investment in Lyft, plan to develop fleet of autonomous cars Ford connecting cars to Amazon Echo virtual assistant, ‘hackathons’ with Chinese drone maker DJI Toyota building its next-gen car software using Ford’s SmartDeviceLink Volvo tapping Nvidia to power autonomous driving tech Auto booths have also been big proponents of advocating tech/media they integrate with, including Google’s Android Auto and Apple CarPlay Image: Ford connecting to Amazon Echo

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2) ‘Data’ is most frequently the answer for what’s driving these partnerships Note push/pull here: sometimes it’s defensive – eg competitors partnering to prevent a third-party from gaining power as a middleman (IBM CEO Ginni Rometty)

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6) Pricing of new products skews toward a premium product’s value (entertainment, health, time saving) rather than saving $ WiThings thermometer: $99 Oculus Rift: $599 (+>1K for PC) Robo 3D RMini ‘entry level’ 3D printer: $1,000

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9) 3D printing was marginalized at CES; biggest opportunity is for B2B and promise was oversold in past Consumers have yet to figure out what to use it for, and it’s still way too slow and way too expensive. Also, Amazon Prime Now, Uber, Postmates, etc all present new challenges to 3D printing. If you can get any product in <1-2 hours, it will further limit use cases for 3D printing.

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10) Media, Tech companies further rift between Public CES, Shadow CES Twitter’s a prime example. Techies at the Convention Center are using and talking about Periscope. Yet as CES started, Twitter announced a new Conversational ad unit – perfect to show marketers at the show. Note: That’s not a bad strategy. Media buyers care more about ad units than live streaming. But it’s a GREAT sign of how big a gap there is between the different kinds of CES experiences. Image source: Twitter

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Framework for charting impact of what you see at CES Innovative Applicable

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Framework for charting impact of what you see at CES Innovative Applicable Innovative Irrelevant Applicable Essential

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An Inside Look at CES

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Quick plug: MRY releases new research on hottest and overhyped tech as viewed by marketers & consumers; see the full infographic via the link Source: MRY

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Quick shout-out to some stellar panelists (thank you all!)

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A must: having the right pre-programmed responses for your smartwatch (yes, I really used these – all the time)

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Quite the week for Oculus: Rift goes on sale, preorders crash site, founder apologies for poor communication around $599 pricing I handled the messaging poorly. Earlier last year, we started officially messaging that the Rift+Recommended spec PC would cost roughly $1500… Many outlets picked the story up as “Rift will cost $1500!”, which was honestly a good thing - the vast majority of consumers (and even gamers!) don’t have a PC anywhere close to the rec. spec, and many people were confused enough to think the Rift was a standalone device. For that vast majority of people, $1500 is the all-in cost of owning Rift. The biggest portion of their cost is the PC, not the Rift itself…. To be perfectly clear, we don’t make money on the Rift.” -Oculus founder Palmer Luckey in his Reddit AMA (Ask Me Anything)

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Want the real future of VR? “Murder She Wrote” already aired it… in 1993 Source: CBS via Wired (h/t Joseph Sanchez)

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Next up: blended reality? “One area I'm really excited about is the collision between the 2-D and 3-D worlds. This is our version of the big bang, and we have created an entirely new category that we call Blended Reality. We're leveraging both immersive computing and 3D printing to take things from the physical world into the digital world and back out to the physical.” -Antonio Lucio, Chief Marketing and Communication Officer, HP Source: Advertising Age

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GM invests $500 million in Lyft to create self-driving car network “In October, GM CEO Mary Barra said the industrial giant won’t rely on the traditional owner-driver model to keep its business ‘going, and will ‘absolutely’ make cars for an age when human driving is defunct. ‘We are disrupting ourselves.’ This deal with Lyft is the best indication we have yet that those are more than talking points.” - Wired Image source: GM

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CA-based, China-backed Faraday Future teases 1,000HP FFZERO1 concept car – but mysteries abound on their real product and if Apple’s involved Image source: Faraday Future

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‘Hoverboard’ vendors were in for a rough year Source: Popular Science

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I actually felt bed for the hoverboard vendors; a few months ago, they must have thought CES would mint money

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Jargon watch: Rideables “Rideables will be more than just hoverboards. This past year was a big one for all electric rideables — not just hoverboards. Small electric skateboard, scooter, and bike companies all popped up, and the few incumbents made solid progress on things like battery life and range. That same trend is going to continue at this year’s CES…” -The Verge Verdict? Yes, rideables were a thing, with Segway (image at right) one of the bigger plasts from the past to make some noise. But with such a big year for auto, and drones so hard to miss, rideables were a footnote.

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Parting thought here: a vision of what we’ll be doing when we have self-driving cars

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Parrot announces Disco, a 50-mph fixed-wing consumer drone to hit market later in 2016; signals continued arms race for best drone specs Source: Gizmodo

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The next wave of drones: self-flying drones you can carry with you. You’ll also need a selfie brush so your hair looks perfect in those drone selfies (dronies)

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Coming soon near Vegas: world’s first ‘Droneport’ for current and next-gen drone pilots (CES 2017 field trip!) Source: Fast Company

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Not at CES, but important in background: Amazon could unleash drone delivery at scale, if regulators let them

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Internet of Things

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Coldwell Banker: Smart Home Tech Goes Mainstream in 2016 Highlights from Real Estate Smart Home Marketplace Survey: 45% of Americans own smart home technology or plan to invest in it in 2016 What makes a home smart? Respondent said locks/alarms (63%), temperature (63%), lighting (58%), safety detectors (56%) 54% of homeowners would install smart tech if they knew it would make homes sell faster Source: Coldwell Banker

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“Sengled Voice is the only integrated microphone/speaker LED bulb on the market.” Because we need 50,000 choices for talking lightbulbs.

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WiThings introduces Thermo, a smart thermometer – but must convince people to pay $99 for a thermometer Source: WiThings

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LG SmartThinQ joins wave of Amazon Echo competitors – adding screen but lacking voice input Source: LG

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Add your heartbeat to photos to show emotion beyond emojis with Sensum’s Emocam

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Wisewear offers stylish line for women focusing on health and safety

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Nothing is more romantic than giving your partner a ring that tells them to get more exercise and sleep

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Why wasn’t the Selfie Mirror at CES?

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Samsung’s WELT is a smartwatch for your waist (but it doesn’t charge your phone, like other belts) Source: Samsung

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Livestream’s Movi lets consumers track action from multiple angles with a single $399 4K camera Source: Getmovi

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Links and Resources CES 2016 Innovation Awards (CES) CES 2016 Sneak Peek: 9 Cool Gadgets (InformationWeek) Top Technology Trend to Watch 2016-2018 (Forrester) Gartner: Top 10 Strategic Technology Trends for 2016 (Forbes) 6 Future-Focused Trends to Watch at CES 2016 (PSFK) As Tech Landscape Evolves, CES Holds Execs’ Interest (Ad Age)

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Select updates from MRY and friends Reality Check: 2016 Won’t Be the Year of VR (Ad Age column by David Berkowitz) CES 2007-2016: 10 Years in Review (presentation by David Berkowitz)

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Keep in touch David Berkowitz CMO, MRY @mry / @dberkowitz www.mry.com [email protected]