ces 2012 key takeaways

7/31/2019 Ces 2012 Key Takeaways

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CES 2012KEY TAKEAWAYS

February 2012

By John Cartoux, Ph.D.

FTI Consulting, Inc.


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CES 2012 1

CES 2012: KEy TaKEawayS

New smartphones, tablets, Ultrabooks and recent developments in screen technology especially OLED,

Windows 8 and smart TV platorms dominated the oors at the 2012 Consumer Electronics Show (CES).

While ew revolutionary products were unveiled this year, many emerging trends are gaining signifcant

momentum. In this document, we ocus on the key ones.

SmArTphonES

More than 20 new smartphones were released at the show. For a detailed review o the phones themselves,

go to www.CNET.com or www.Engadget.com.

A special nod goes to the Samsung Galaxy Note, the largest smartphone

with a beautiul 5.3-inch screen that showcases Samsungs Super AMOLED

technology. The Note includes a stylus (like the Palm o old times). With its

size and stylus, it is positioned as a hybrid device between a phone and a

tablet. The question is, will there be a market or it?

mobilE 4G nETWorKS in ThE UniTEd STATES There is an increased adoption o LTE as the 4G standard in the United

States (Long Term Evolution o 3GPP proposed standard). AT&T is strongly

pushing its LTE inrastructure to challenge Verizon and released several

LTE-compatible phones at the show. Other major carriers such as Sprint

and MetroPCS also showed commitment to LTE.

T-Mobile had a small presence at the show but did release the Samsung Galaxy S Blaze to work with

its HSPA+ 4G network. Although LTE is adopted by all major U.S. carriers, T-Mobile reafrmed its

commitment to HSPA+.

mobilE opErATinG SYSTEmSFour operating systems (OS) dominate the world o mobile devices today: Android, Apples iOS, RIMs

BlackBerry and Microsot Windows 7 (by order o market share). To summarize the current situation, Android

is designed to be used by the largest number o manuacturers and thus oers the greatest vendor exibility

and lowest installed price (ree); iOS is easier to use and has a larger app marketplace but is limited to

Apple devices; BlackBerry mostly has been ocused on the enterprise world but currently is at the crossroads

between the last version o an ancient platorm and a new operating system. Windows 7 (Windows 8 is

discussed below) is extremely easy to use but lacks the depth o the app market that both Android and

Apple oer.

adroid. While most o the phones released at the show are Android-based phones, only a couple

(Samsung and Huawei) will be shipped with Android 4.0, the latest release o the OS called Ice Cream

Sandwich, or ICS (see table in endnotes or a review o the ancy names attached to Android versions).All other new Android smartphones will be shipped with Gingerbread, the 2.3 release o Android. ICS

unifes the smartphone (Gingerbread) and tablet (Honeycomb) versions o the OS. Honeycomb, designed

specifcally or the tablet market, never really took o (see table in endnotes), and, while ICS represents

a huge improvement or manuacturers building these two types o devices, it also implies a thorough

redesign to beneft rom the most advanced eatures that are not backward compatible with previous

versions. Consequently, manuacturers are rolling out phones with Gingerbread while planning uture ICS

upgrades this year. We should see them coming on the market in Q2 o 2012.


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widos. Windows-based phones announced by Nokia (Lumia 900) and HTC

(Titan II) made big splashes at the show. The Nokia Lumia 900 is a great phone

that seems to be designed especially or Windows 7, which would be a frst or

Microsot. It is easy to use and was awarded the CNET award or the best new

phone at this years CES. These two phones support Microsots heavy push in

the phone and tablet markets in 2012.

BlckBerr OS. RIM announced the release at the show o the latest version

o its BlackBerry 7 OS platorms or cell phones and smartphones. The majoreature included in the 7.1 release that rolled out to worldwide carriers in

January is a mobile hotspot capability that allows users to connect up to fve

Wi-Fi devices to their Internet-connected BlackBerry. This is a catch-up move

since this capability already is available with iOS and Android. (The uture or

the companys smartphones, however, might rely on the general release o

its BlackBerry 10 OS platorm, but smartphones with this OS might not be

available beore Q3/Q4 o 2012.)

TAblETS

CES 2012 confrmed that the tablet market is exploding world-wide as almost 100 new tablets debuted at the

show. Four key dierentiators will drive the competition with the iPad. These include:

Operating system

Screen technology, size and resolution

Processor and memory

Price

opErATinG SYSTEmS

widos 8. Windows 8 debuted brilliantly at CES 2012. Capitalizing on the concepts developed orthe Windows 7 phone OS, Windows 8 marks a clear departure rom every other Windows version

developed or PCs to date. The user interace has been completely redesigned with multiple devices in

mind. It runs seamlessly across smartphones, tablets and PCs while making the best use o each devices

special properties. Windows 8 will launch beginning with the tablet probably in Q2 o 2012. The tablet

demonstration at the show was made on a Samsung Galaxy Tab 7 tablet powered by an Intel processor,

which was able to run ull Ofce applications such as Excel or PowerPoint.

One o the issues with Windows 7 (and 8) is the lack o available apps compared with the Android or iOS

ecosystems. This void might be flled by BlueStacks new sotware that runs all kinds o Android applications

on Windows 8 and, thereore, will bring 400,000 Android applications in the Windows 8 ecosystem in one

swoop.

While not public yet, the price might be an issue or success. Unlike Android, Windows is not open source

sotware, and the combined prices o Intel and Windows licensing will pressure the manuacturers margins

and might place the device in a difcult competitive position.

adroid. The vast majority o tablets that debuted at the show were based on Android, but, just like

smartphones, very ew new tablets oer Android 4.0 ICS out o the box. ICS upgrades or Honeycomb tablets

are scheduled or early Q2 o 2012. Two products are worth mentioning:

Lumi 900/widos 7


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CES 2012 3

The Samsung Galaxy Tab 7.7 brings Samsung Super AMOLED stunning screen technology to this tablet

ormat. Running Android 3.2 Honeycomb, the tablet oers a very high resolution and an amazing screen

quality or this ormat.

The Asus Memo 370T integrates the frst quad-core processor on a tablet, the NVIDIA Tegra 3. It will run

Android 4.0 ICS and will be oered at the very competitive price o $250. This is a powerul tablet.

BlckBerr OS. RIM unveiled the release o its PlayBook OS or its PlayBook tablet. The 2.0 release represents

a major improvement, making integrated messaging and calendar apps fnally available in the tablet. RIMsoriginal launch without these applications disappointed loyal BlackBerry ans and IT departments. (Note,

however, that to get true BlackBerry integration on a Playbook, companies will have to upgrade their

BlackBerry servers an expensive proposition.) The PlayBook also will oer a Video Store and tools or

composing and editing rich-text e-mails. The release will be available or download sometime this February.

Sales o the PlayBook tablet have been much lower than expected, and RIM is acing an increased

competition in the space. The companys road map defnitely relies on a successul release o BlackBerry 10

in 2012 as well as a 7- (and maybe a 10-) inch tablet that capitalize on this new OS eature and represent a

signifcant user experience improvement.

SCrEEn SizES And rESolUTionTablet screen size starts at 7 inches and goes up to 10.1 inches although Samsung showed o a 13- inch

device. The 7-inch group represents about 45 percent o tablets available on the market and notably includes

the Kindle Fire and the Nook e-readers. The 10.1-inch is a very popular ormat or Android tablets as well; it

represents about 38 percent o the available tablets.

In between these two ormats, we fnd the iPad with a 9.7-inch screen size. Note that Samsung also oers

a 7.7 and an 8.9 series, and some other manuacturers oer a less common 8-inch ormat. The table below

summarizes the various ormats by type o device.

devce Tye Tyca Scee Se Sae mes

Cell Phones 2 to 3.5 BlackBerry Curve 2.4

Smartphones 3.5 to 4.7 Samsung Note 5.4

Tablets 7 to 10.1 iPad 9.7 Fire 7.0

Laptops > 10.1 Ultrabooks 13 13.3

Resolution is an important actor when considering a tablet, especially or watching high-resolution movies.

The most common resolutions ound on tablets are 1024 x 600 pixels (WSVGA) or 7-inch tablets (Fire,

Nook) and 1280 x 800 (WXGA) or 10.1-inch tablets. Note that the iPad 2 currently oers a 1024 x 768 (XGA)

resolution or a 9.7-inch size, which is a little less than the best 10.1- and 7-inch tablets on the market today.

2012 will see higher resolution tablets coming on the market, with the iPad 3 being the most anticipated o

all, and WXGA resolutions (1280 x 800) in the 7-inch tablet group (Samsung 7.7 series, or example).

CoST

The iPad at the high end and the Kindle Fire at the low end set the reerence prices against which the market

aligned itsel in 2011. New entrants such as the aorementioned powerul Asus Memo 370T, aggressively


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priced at $250, could be a serious threat to existing tablets and e-readers such as the Nook at $215 or even

the Kindle Fire at $199. The 7-inch tablet landscape in this $200 to $300 range is quite crowded. All tablets

oer 16 GB o memory and an equivalent processing power and more or less equivalent connectivity options.

Some key dierentiators, thereore, will include screen resolution and quality o display, available applications

and access to content, and capability to upgrade to new OS versions such as Android 4.0.

The 10.1-inch (or equivalent) landscape is even more crowded and is in direct competition with the iPad 2

with prices starting at $400 and going up to $800, which is very close to the frst Ultrabooks (see discussion

below). The upcoming iPad 3 probably will change the dynamics in this group. Apples lead rom a designand eatures perspective and the increasing number o Android tablets in this segment might pressure the

price downward or the beneft o the consumer. However, i Android 4.0 does not live up to its promise and i

Windows 8 does not add signifcant competition and is too expensive, the iPad still will have a very good year

oUr ViEW on TAblET TrEndS

Even with all these new tablets on the market, either announced or already available, the uncertainty

around the main competitors o iOS probably will not materially aect Apples iPad sales in 2012 but

certainly will by 2013.

Android 4.0 ICS is expected to bring additional powerul eatures to the tablet ecosystem, but most

upgrades will begin in Q2 o 2012, and ICS probably will not be ully deployed in the space beore the endo the year.

Windows 8 is a promising OS, but there still are unanswered questions regarding which processors and

platorms will support the OS and the price at which these devices will be made available given the OS

licensing costs that Android does not carry.

Devices are converging. Samsungs 5.4-inch Note is a small tablet or a large phone. The Windows 8

operating system is apps-centric, moving the OS to the background as all tablets do today so that laptops

may share the same user interace with tablets in the uture. And Windows 8 will make Microsot Ofce

truly usable on tablets or the frst time.

Computing power and speed brought by new processors like the Tegra 3 rom NVIDIA or tablets or

equivalents rom Intel, ARM or Qualcomm will increase tablets capabilities, allowing them to do more

than process all orms o content and run client-heavier applications such as business and ofce type

applications.

Keyboards are coming to the tablet with products like the iHome iDM5 or iPad and Android tablets. Some

products such as the Lenovo IdeaPad YOGA go urther down the road with a PC that transorms itsel into a

touchscreen tablet, the keyboard rotating to position itsel at the back o the tablet. These products might

not get a signifcant market share this year, but there will be more o these types o devices in the near uture.

UlTrAbooKS

Ultrabooks originally were inspired by the Apple MacBook Air, the frst ultrathin laptop at 0.67 inches at its

thickest point.

Introduced in 2011 as a response to Apple by Intel, which invented and trademarked the term, Ultrabooks

are extremely thin, lightweight laptops that are gaining a lot o attention in the marketplace. More than a

dozen o these Ultrabooks were introduced at the 2012 CES, and that number is expected to explode during

the year. Intel has not really defned requirements or an Ultrabook but rather expounded a set o loose

guidelines that somehow manuacturers already are exceeding. To get the Ultrabook label, laptops must:


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Use a second-generation Intel Core processor;

Deliver ast boot times, typically in less than seven seconds, using Intels Rapid Start Technology (or a

third-party solution);

Be thinner than 0.71 inches (18 millimeters) at the thickest point;

Weigh less than 3.1 pounds;

Have at least fve hours o battery lie under general use conditions; and

Use a ash-based drive or storage. Flash-based drives are solid state drives. They use solid state memory

instead o rotating magnetic disks and weigh about hal o their hard drives equivalent with a much lower

power consumption. This technology, in act, is a key to the thinness and light weight o the Ultrabooks.

In addition, Ultrabooks borrow interesting eatures rom the tablet space such as the capability o always

staying connected even when placed in hibernation mode, thus allowing connected services such as e-mails

to download. Some Ultrabooks can be woken up rom a distance with a smartphone.

New Ultrabooks will cost in the $1,000 to $1,300 range depending on models, a price that is competitive with

the MacBook Air but still much higher than the iPad ($800 or the highest model).

Revealed at the show, the aCER aspire S5 (shown above) claimed to be the worlds thinnest laptop (or

now). It measures just 0.59 inches (15 millimeters) at its thickest point and weighs less than 3 pounds. It has

a 13.3-inch screen and a Thunderbolt port, which provides a high-speed connection to peripherals. Acer

Green Instant On technology takes it out o sleep mode in about 1.5 seconds.

Ultrabooks can be seen today as the bridge between laptops and tablets, and the uture o Ultrabooks

will be defned by the way manuacturers will be able to combine these two concepts into a single and

meaningul device, at a price that would need to be in the $500 to $900 range in order to gain a large

market share.

The Lenovo IdeaPad YOGA (shown below) might very well be the frst step in that direction with its dual

usage. Other concepts include a lightweight laptop with a detachable screen that could be used as a

tablet.


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The Leovo yOGa Ultrbook d widos 8 The Leovo yODa Ultrbook i tblet mode

The Leovo yOGa is 0.67 inches (17 millimeters) thick and weighs 3.1 pounds. Thanks to its particular dual-

hinge design, this Ultrabook can transorm itsel into a tablet or a stand-up screen, automatically shutting o

the keyboard once the screen is olded beyond 180. The Lenovo YOGA will be shipped with the general

release o Windows 8 and priced at $1,199, but any delay in Windows 8 might impact potential market success.

Although revealed long beore the show, it is difcult not to mention the aSUS Zebook amily with a sleek

design, aggressive perormance and entry price o $1,099 (available in various metallic colors, including pink).

mAjor TrEndS for TVS

Orgic LED (OLED) scree techolog (see table in endnotes) was on display at the show, and big

OLED screen televisions will be available on the market in 2012 thanks to cheaper and more eective

manuacturing technology. Both LG and Samsung showcased stunning 55-inch, ultrathin OLED TVs. These

still are at the expensive end o the TV market with retail prices in the $5,000 to $8,000 range.

as r s 3D is cocered, 3D with glasses on Samsungs and LGs OLED TVs were stunning and ar

superior to any glasses-ree technologies, which are blurry and have very limited viewing angles. But there

still is no clear winner between 3D, with or without glasses, in terms o consumer preerence, and content

is limited. Thus, 3D TVs do not seem to be ready or strong market growth in 2012 or 2013. Samsung and

other manuacturers (Toshiba, LG and Panasonic) also were demonstrating Ultra HD on large TVs. This was

a gorgeous 2D experience that almost elt like 3D.

Cotrol o the TV through voice d/or gesturig iterce. The successul Kinect or Xbox 360

interace is a promising concept that we soon should see applied to the ull control o the TV, as well asto the control o other devices. PrimeSense, the Israeli company behind Kinect, demonstrated its own TV

interace where users can control pages o content and grab the one they want to play.

Smrt TV, or iTV that can connect to the Internet and optionally other devices, is an area o strong

innovation with no clear winning concept yet. Some manuacturers at the show have built smarts into their

TV sets; others are making standalone boxes that plug into older TVs. Several companies demonstrated

Smart TV platorms at the show, most running Android OS. Google TV is one variant at the show, that, to

us, did not seem superior to other oerings.


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wht defes smrt TV is open and evolving, but the essential eatures that should be included are:

A smart user interace that makes everything easy and simple or all users, geek and tech-adverse alike,

and in the long term replaces the remote control through voice and/or gesturing;

The availability o Internet-based television programming, which might be a problem until cable

companies and networks roll out some orm o Internet-based subscription services;

The capability to interact with a TV rom another device such as a smartphone or tablet while watching TV;and

Recommendation engines and search as essential eatures o certain TV platorms such as Goggle TV,

while cloud-based gaming could be an essential component o these platorms as well.

All in all, Samsung and Google TV probably are best in class at the moment, but there was no Wow! actor

anywhere. In particular, user interaces are ar rom what they should be in order to oster rapid market

adoption, and one can wonder what will happen i Apple decides to revolutionize the space. One very

interesting aspect not yet addressed by smart TV platorms is the place o advertising in the ecosystem.

oThEr ArEAS of innoVATion Innovation in glass and OLED manuacturing technology is a undamental aspect o new devices. From

transparent home windows that also are screens to exible glass, these products open the door to many

changes in the way appliances, devices and even homes are designed. (Here is a very cool transparent

display screen demo rom Samsung that can replace a home window or be superimposed on a window.

For more o these, visit the Corning website at www.Corning.com.)

Control o smart appliances, energy, security and more generally o the ully integrated house was a big

theme at the show. Ideed, the Iteret o coected thigs m be bigger mrket or cell crriers

d chip mkers th mobile phoes, PCs d tblets re tod.

Integration o touchscreen and Internet technology will continue to evolve or cars.

Cloud-based storage and computing will acilitate access to and sharing o content.

The world o gaming benefts rom all the innovation mentioned above: display, cloud-based gaming and

gesturing interace.


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EnDnOTES

AboUT olEd TEChnoloGY

OLEDs use organic materials that emit light when electricity is applied, hence the name Organic Light

Emitting Diode. OLEDs do not need backlight and flters, unlike LCD displays, and so are more efcient and

much thinner. OLEDs are either made with passive (PMOLED) or active (AMOLED) matrix. AMOLEDs are

more complicated and expensive to make.

OLED-based screens have a great picture quality with brilliant colors, a ast reresh rate and a wide viewing

angle. They also have a better power efciency than their LCD equivalent, which makes them ideal or

battery-powered devices. Until recently, OLED-based screens have been used mainly in small (2- to 5-inch)

displays or mobile devices such as phones, cameras and MP3 players, but with recent improvements in

manuacturing technology, large OLED TVs manuactured at a more reasonable cost will be on the market

this year. According to LG, its new 55-inch OLED TV is 1,000 times aster than LED/LCD displays while the set

is only 4 millimeters thick and weighs just 16.5 pounds.

The developments in OLED technology since 2011 have been very rapid, but more is around the corner.

Companies are working on technologies to produce exible and transparent panels that will open a new

world o applications such as:

Curved OLED displays to place on non-at suraces

OLED TV screens that can be rolled up

Transparent OLEDs embedded in windows and in car windshields

Android VErSionS And CodE nAmES

pat Ce nae (Gge data as ja. 3, 2012)

Android 1.5 Cupcake

Android 1.6 Donut

Android 2.1 Eclair

Android 2.2 Froyo (phone platorm 30% o Android devices)

Android 2.3 Gingerbread (dominant Android platorm on smartphones and tablets

today 55% o Android devices)

Android 3.0, 3.1, 3.2 Honeycomb (designed or tablet 3.5% o Android devices today)

Android 4.0 Ice Cream Sandwich (unifed version < 1% o Android devices today)


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about FTI CosultigFTI Consulting, Inc. is a global business advisory frm dedicated to helping organizations protect and enhance enterprise value in an increasingly complex legal, regulatory and economic environment. Witmore than 3,800 employees located in 24 countries, FTI Consulting proessionals work closely with clients to anticipate, illuminate and overcome complex business challenges in areas such as investigationslitigation, mergers and acquisitions, regulatory issues, reputation management, strategic communications and restructuring. The company generated $1.4 billion in revenues during fscal year 2010.

More inormation can be ound at .ticosultig.com .

2012 FTI Consulting, Inc. All rights reserved.

for morE informATion, plEASE ConTACT:

John Cartoux, Ph.D.

Managing Director

Entertainment, Media and Digital Practice

+1.202.277.6158 (Direct)

[email protected]

1101 K Street, NW

Washington, DC 20005

Disclaimer: Opinions expressed herein are o the author and do not

necessarily reect those o FTI Consulting, Inc. or its other proessionals.

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