Jason Stipp: I'm Jason Stipp for Morningstar. The Consumer Electronics Show kicks off this week in Las Vegas, and Morningstar markets editor Jeremy Glaser is going to be on the scene.
But he's here with me today to talk about some of the big themes he's going to be keeping an eye out for while he's at the conference.
Thanks for joining me, Jeremy.
Jeremy Glaser: You're quite welcome, Jason.
Stipp: So, the first thing I think may be one of the biggest stories to come out of the Consumer Electronics Show is the tablet device. Now, the iPad made a big splash this year, but there is going to be a lot of folks who are going to be following on with devices of their own. What do you expect to learn about the competitive environment with tablets?
Glaser: 2010 really became the year of the tablet because of the iPad, and 2011 is going to be the year of the iPad killers. Just as you may remember that there were a lot of iPod killers out there and a lot of iPhone killers out there--everyone and their mother is going to be producing a new tablet device, with a new tablet operating system.
I think we're going to see devices from the likes of Motorola and HTC and possibly Hewlett-Packard. I think Microsoft could release a new tablet operating system. We're going to be hearing a lot about the tablet.
I think the real interesting questions will be: How good are these devices? Are they actually ready for primetime or are they just kind of half-baked ideas, because these companies feel like they need to have a response to Apple's successful product. And what will the consumer appetite for these type of devices be? Are people willing to learn a new type of Android operating system to run on a tablet? Do people want to learn another version of Windows? Are they going to be too complicated? Something like Blackberry's PlayBook--is that going to be successful with some of the corporate users I think they are targeting with that?
I'm not quite sure what the answers to these questions are yet. I'm really looking forward to getting my hands on lot of these new devices. But certainly I think tablets are going to be on top of everybody's keynotes and on top of everyone's press conferences as something we're going to hear a lot about.
Stipp: Do you think the iPad has proven there is a niche, there is a place for this product, or is it just that this is a shiny new product, it's from Apple, which is very popular with consumers. Is there going to be the demand for all the other devices that might come out, just as its own kind of device?Read Full Transcript
Glaser: Part of it certainly is that it's a shiny new Apple product, which is why the iPad has done well. But I think it's been surprising how many uses people have found for it. I think that there was a lot of people being quite skeptical about, "okay, do I really need something that's sandwiched between my smartphone, which is very powerful, and my laptop which is even more powerful, just so that I can check a stock quote while I'm watching TV. It turns out people like checking stock quotes when they are watching TV, and they like reading books on the device.
I think that we'll see a lot of space for people who don't want the Apple product, who are looking for more flexibility, who are looking for maybe even a little bit more power, a little bit more customizable features. I think there is a category there. I think it's going to be around. How big it's going to be, I can't say. I think that's going to depend on the quality of some of these other devices.
Stipp: One consumer electronic device that really seems to have become a must-have today is the smartphone. Everyone seems to be having the smartphone. They have thrown away their old dumb phones. What do you see and what do you expect to see on smartphones at the conference?
Glaser: You are absolute right that the smartphones have become a must, must-have device, and I think the thing we're going to hear the most about are new 4G networks this year.
Now there is a lot of discussion about what exactly constitutes a 4G network, but essentially it's a step up from the speeds we see on today's 3G data networks. We're going to hear announcements from companies like HTC. There has been a lot of leaked press about some of their new phones that they are going to announce.
I bet we're going to see new phones from a lot of other makers, such as Motorola and possibly from Palm, from HP. And these are the kind of devices that are going to power a lot of earnings for the phone companies like Verizon and AT&T, if they can convince people to upgrade to these higher-price data plans, to upgrade to these full-feature higher-price phones.
These are really next-generation networks, next-generation phones. There could be a lot of excitement around them, and we're going to hear a lot about them.
Stipp: So we talk about smartphones, we talk about tablets. These are the sexy new products that kind of make the old PC sound like a dinosaur. But PCs are still a big chunk of electronic companies' business. Is there anything new on the horizon for PCs?
Glaser: The PC may seem like a dinosaur, but if you have a brontosaurus in the room, you are definitely going to notice it, and I think that's the case at CES.
Microsoft and Intel have really a vested interest in getting people to upgrade their PCs. The PC upgrade cycle has slowed considerably as people turn to their smartphones and now increasingly to their tablets to do a lot of day-to-day stuff. There is less need for ... the absolute fastest processor ... the absolute newest operating system.
I think that one of the things I'll be looking for is how these companies are going to position the PC as something that's really indispensable and something that you need to update. So what kind of new features, what kind of new functionality, what kind of new software are they going to roll out to convince people that it's worth it to shell out the money for this on top of all the other new electronic gadgets they have.
Stipp: So, Jeremy on the entertainment front, one of the things you looked at last year was 3D TV. Now 3D has made a lot of inroads in movie theaters. Is it on its way to your living room anytime soon?
Glaser: I was pretty skeptical last year, and I think I remain pretty skeptical, so I am open to being wowed by the changes in the technology over the last year that are going to make it a must-have. But there is a lot of things holding back the 3D TV from becoming a mainstream consumer device. They are still very expensive compared to a standard HDTV that you are just going to pick up for relatively cheap price nowadays.
There is not a ton of content out there. We had a few 3D blockbusters like Avatar, but a lot of other big films like Harry Potter, for example, weren't made in 3D. I think there will always be some 3D films being made, because they tend to be pretty profitable because you can charge more for the movie tickets, but I don't think there is going to be this flood of content that's going to make it a must-have to have the 3D TVs.
And finally people look goofy wearing the glasses, and I know they are willing to do it maybe in the dark of their movie theater, but in the living room, with the kids running around, it might be less enticing. It doesn't seem like it would be an everyday activity. So we don't think it's something you're going to use that much, you are not going to invest in it. I think the companies are going to be fighting hard to change this perception. It's going to be an uphill battle.
Stipp: So whether it's through your 3D TV or your smartphone, your tablet device--these are all ways of delivering content. And content really seems to be the thing that unites a lot of these devices together. What do you expect to learn about content and the future of content at the conference?
Glaser: Content is certainly one of the most fast-evolving areas in consumer electronics right now. For a while, we have been really tied to this cable or broadcast mentality: you go to Comcast or Time Warner Cable, and they deliver you this menu of channels, and this is the content that you receive, and they tell you this from on high.
One of the things that we have seen happening more and more and starting to accelerate is people are willing to explore other content sources to feel that beautiful HDTV they have. Netflix streaming has became incredibly popular; they launched streaming-only plan. Amazon has video-on-demand; Apple has a video-on-demand. Sears just launched video-on-demand service. There are plenty of ways to now get this content. Now it's not necessarily the best content right now. If you want to watch live sports, you still need ESPN, you still need Fox, you still need those broadcast channels. But a lot of other content, like movies, is becoming increasingly easy to find otherwise.
And I think at the show, I am going to be looking for new devices and new ways to get more of this core content away from the cable companies, away from the incumbent players and into more of a la carte system, where you are going to be able to just pick and choose exactly what you want and not have to worry about paying for the stuff that you don't.
I think this is really consumer-friendly. I think once people get a whiff of it, that this is possible, and this technology is there, you could see a really big move there pretty quickly. And I think this is one of the reasons you see Comcast so excited to buy NBC Universal to get in on that content. The content producers being able to deliver directly to the consumer could have a lot of benefits.
Stipp: So, sounds like the technology is there, but maybe some of the agreements that actually make it happen, those might still be in the works.
So, another kind of content, another category of content is user-generated content. The social media network. You hear a lot about the social world and how social media is important in the business world. I am not sure anyone quite exactly knows what that means, but what do you expect to learn about social at the conference?
Glaser: The Social has certainly become a really important buzzword, and a lot of corporations, when they see buzzwords, they get excited about it. And do we need a socially aware refrigerator? Probably not.
But we are going to hear a lot about socially aware products that people might actually use--something like a TV that you can update Twitter and Facebook to. This is something we saw being previewed last year, something that's starting to roll out. I'd expect to see a lot more of those types of products, a lot more of things that maybe passively update Twitter for you. So if you are watching this movie or you are watching a game, it would say "hey, Jason is watching the Rose Bowl" and that would go onto your Twitter feed. I think these are the kind of innovations that some people might want. I don't think everybody does, but I would expect to see a lot of that.
Stipp: Lastly, Jeremy one of the things I have really been waiting for is that day when robots will be able to do everything around the house that I have to do myself. And I am hoping that you'll come back from the Consumer Electronics Show with some important information about what robots are going to be doing for me in 2011.
Glaser: Unfortunately, Rosie from the Jetsons will have to remain a fantasy. Certainly, I think we'll see some stuff. iRobot is introducing a new little robot that's going to be able to clean behind the toilet, which I know is a very hard to reach area. I think we'll see a lot of stuff in home automation, which might not look exactly like the robot you are imagining, but it could help you turn off all the lights from your iPad, for example, or use your phone to open your garage door.
I think that technology has been there, but it has never really made broad mainstream appeal. I think we will see a lot of products that'll try to push this sort of home automation, home robots into that space. Will they be successful? That depends on how much people want to cede control of their house, but it will certainly be a product category that I'll be keeping an eye out for.
Stipp: Well, Jeremy thanks for the preview. Have a safe trip to Las Vegas, and we look forward to hearing your reports on-scene.
Glaser: Thanks, Jason.
Stipp: For Morningstar, I'm Jason Stipp. Thanks for watching.