CES 2013 Preview: Whistling Past the Vegas Graveyard

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CESThe CES graveyard is full of gadgets that made a big splash in Vegas, but died shortly after the big show. In 2009, the tech media lauded the Palm Pre and WebOS, labeling it a potential iPhone and iOS killer. In 2010, the talk centered on 3D HDTVs, including the feature-rich Toshiba Cell TV, which could convert 2D into 3D thanks to its eight-core processor, and supported motion-based controls. In 2011, the Motorola Xoom and a host of other Android Honeycomb tablets hogged the spotlight and kicked off the year of the tablet. Last year it was the Windows-powered Ultrabook that was expected to revive the slumping notebook market.

To say these devices failed to live up to the hype is an understatement. One became vaporware, another’s failure led to the company’s ultimate demise, another did not revive a company already in decline, and still another fell far short of reversing, or even slowing, a market trend.

The Ugly Truth

The Palm Pre was quickly overshadowed by the Android-powered Motorola Droid, the first real iPhone killer. Following lukewarm sales of the Pre and subsequent models, HP acquired Palm in April 2010, released the TouchPad tablet in February before discontinuing all WebOS products and effectively killing it in August 2011.

Toshiba Cell TV never hit the US market, despite Toshiba’s promises to the contrary, and while 3D HDTV sales have slowly risen over the past two years, it is not because of the 3D feature. According to the NPD group analyst Ben Arnold, “3D has been a success for the television market from a sales perspective. However, few consumers cite watching content in 3D as a reason for purchasing a TV, indicating that other factors such as screen size, resolution, and Internet connectivity hold more importance.”

In other words, 3D has become just another feature, and not a reason consumers are buying new HDTVs.

Motorola Xoom

Following CES 2011, the relatively bulky Motorola Xoom was quickly overshadowed by the ultra-thin iPad 2, announced just a month later. The Xoom was sold as a 4G LTE tablet despite the fact it launched with only 3G support (users had to send their Xooms away for a 4G chip upgrade about five months after the first Xooms shipped in February 2011). On top of that, Android Honeycomb was both jittery and buggy, especially compared to the ultra-smooth iOS. The Android tablet app situation was very bleak, with only a dozen or so apps designed for the big screen, compared with tens of thousands for iOS and the iPad. Android Honeycomb was also missing very popular movie-streaming apps like Netflix and Hulu until months after launch. And to top it all off, the Xoom was incredibly expensive, with Verizon charging $600 with a 2-year agreement and $800 without.

Motorola failed to ship more than half a million Xooms in any given quarter following it release, while Apple sold a million iPad 2s its first week of availability. Motorola continued its decade-long decline since its heights as the RAZR cell phone maker, and was acquired by Google in 2011.

It’s too early to write-off Ultrabooks, but 2012 was not a banner year for the thin-and-light laptop. Analysts at IHS iSuppli cut the 2012 Ultrabook shipment prediction in half, from 22 million to 10.3 million units, citing “high pricing and a lack of effective marketing.” In addition, analysts expect tablet sales to top notebook sales for the first time ever in 2013, and Windows 8 and Ultrabooks have not provided the bounce in sales manufacturers expected.

This list isn’t exhaustive, other product categories have also fallen to the CES curse, including pocket camcorders, Windows 7 tablet PCs, business eReaders, and smartbooks. The latter two never launched product categories following the success of the original iPad, while pocket camcorders were replaced with smartphones (as symbolized by Cisco killing its Flip line of devices) and Windows 7 tablet PCs never broke through beyond vertical markets and as niche devices.

Curse of CES 2013

Samsung Galaxy CameraSo what device is poised to become the CES failure of 2013? Android-powered digital cameras are an early contender. Designed by camera makers looking to blunt the sales decline of point-and-shoots in the face of “good-enough” camera-toting smartphones,  Samsung has already launched the Galaxy Camera, and Nikon recently released the Coolpix S800c. Polaroid is will follow suit with a similar device at CES 2013.

This category has major flop potential. Each is essentially a high-powered point-and-shoot with Android smartphone capabilities, and it’s a reactionary move by the manufacturers as there is no evidence consumers are clamoring for these hybrids.

With a decreasing gap in image quality, point and shoots have two main advantages over smartphone cameras: optical zoom and optical image stabilization (OIS). However, the Nokia Lumia 920 is the first smartphone with a form of OIS, and smartphones like the iPhone 5 and Galaxy Note 2 rival mid-range point-and-shoot output in terms of picture output and low-light performance. Android-powered cameras can bring the power of image-editing apps and connectivity, but that only evens them out with smartphones, which most consumers already own and carry anyway. So the question is, will consumers carry another connected device (and possibly pay a monthly carrier data fee) for optical zoom and possibly slightly better pictures? Not likely.

Another Year for HDTV

Never mind 3D HDTV, or smart TVs, which have seen modest success after being touted by many manufacturers at CES 2012, CES 2013 will have a bevy of so-called Ultra HDTVs, with 4K resolution that blows away the current 1080 HDTV standard, from LG, Samsung, Panasonic, and Sony. The problem with Ultra HD is there is little to no content broadcast in the high resolution, and cable companies are reluctant to transmit such data-intensive programming. So consumers can’t take advantage of 4K over the air, and 4K Blu-Ray players are just starting to roll out. The other problem is that Ultra HDTVs are going to be big… real big. They have to be in order for users to discern and appreciate the pixel density. Most sets announced begin at 80 inches, and Samsung is rumored to unveil a 110-inch Ultra HDTV.

However, if anything is going to keep Ultra HDTV from success in 2013 and the coming years, it’s not the lack of content or screen size. It’s the price tag, which will likely reside somewhere north of $10,000. Sony just announced the 84-inch XBR 4K LED TV, complete with $25,000 price, and LG has an 84-inch Ultra HDTV available for the relative bargain price of $20,000.

What Else?

Looking back, CES 2013 will likely be notable not for the new products and categories introduced, but for the components and product features. Intel seemingly debuts a new chip each year, and rumors suggest the chip-maker will launch its Haswell line of CPUs, which could bring better gaming performance to Ultrabooks and other thin devices. Look for Intel to also make large steps into the Android smartphone and tablet space, as it began tiptoeing into the mobile market with a new line of Atom processers in 2012. The ARM chip makers like NVIDIA and Qualcomm will probably be busy as well, perhaps revealing the first hexa-core or octo-core mobile chipsets.

In addition to 4K, other display technologies will be a focus, as Samsung will show off its new bendable screen that the Galaxy maker will tout as “unbreakable.” Also, expect to see new accessories and devices leveraging the latest wireless technologies, including NFC, wireless charging, and 802.11ac.

One tech giant certainly not bound for the CES graveyard is Microsoft, but only because they have pulled out of the show completely. Still, expect there to be plenty of Windows 8 Ultrabooks and tablets from Microsoft partners like Lenovo, ASUS, and others, with Ultrabooks perhaps pulling off a Lazarus in 2013 and rising from the CES grave.


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