CES2014 – Tough Years Ahead for Manufacturers and Retailers
As a follow-up to the CES pre-event opinion, Euromonitor International looks at some of the more interesting products showcased at the event.
- Bendable displays
- Connected toothbrush
Source: Samsung Corp, LG Corp and Kolibree SAS
With both LG Corp and Samsung Corp launching curved smartphones towards the end of 2013, it is no coincidence that these two fierce rivals also showcased bendable televisions at CES2014. LG unveiled a bendable 77-inch OLED television with ultra HD resolution while Samsung took a different path, introducing larger sized but more commercially viable ultra HD LCD panels.
Despite the excitement, the retail prices of these bendable televisions are expected to be beyond the reach of the mass consumer. Critically, curved televisions do not enhance video quality significantly, despite the marketing hype of manufacturers. Instead, the significance of this fledgling technology is that panel manufacturers can use the know-how to mass produce flexible displays (which allows for great bending angles) in large volumes. In particular, Euromonitor International projects sales of wearable technology to exceed 280 million units in 2018, primarily driven by progress in flexible displays.
webOS started life as an operating system (OS) from Palm Inc, with the latter being later acquired by Hewlett-Packard Development Co LP (HP). LG Corp then acquired webOS from HP in February 2013, with the intention of incorporating it in its smart televisions (internet-enabled). Smart televisions have enjoyed significant success as sales have surged even in emerging markets like China and Colombia.
Forecast Sales of Smart Televisions- 2014
Source: Euromonitor International
However, a combination of lack of content, limited codec support and poor user interface have deterred users from harnessing smart television’s full internet capability. As noted by Euromonitor International when HP launched tablets and smartphones running on webOS, the key deciding success factor of OS is the availability of apps and services, which continues to be LG and webOS’s Achilles heel. The lack of compelling apps and services for large screen products (like televisions) remains a problem that manufacturers are struggling to overcome.
The electric toothbrush analyses a user’s brushing habits, showing if he/she has missed a spot, brushed the same area for too long, etc. The toothbrush transmits the information to a smartphone via an app and gives the user a score (much like a game).
While an electric toothbrush that tracks and monitors brushing patterns and relays the information to a smartphone may not seem exciting to some, the product is further testament to the concept of a connected world, where different products communicate and relay information to help consumers. Other manufacturers are also looking at appliances with network connectivity which work together with smartphones or even individually.
The Future is not Now
Global sales of consumer electronics in 2014 are forecast to exceed US$824 billion, equating to a 4% gain on the previous year, with the main driver being smartphones. Sales in 2015 are projected to grow by a mere 2%, followed by a further 1% in 2016. Companies like Sony Corp and Panasonic Corp have been struggling to achieve profitability over the past few years, while more recently even Samsung Corp provided fourth quarter financial guidance significantly lower than analysts’ expectations.
Manufacturers and retailers are in desperate need of products that can stimulate consumers’ interest and improve margins. While bendable displays, smart televisions and connected toothbrushes are interesting concepts, end consumer prices will remain high and it will take time for consumers to adopt such products. As a result, the struggle for profitability and revenue growth will remain a challenge going forward.