CES 2017 is set to showcase emerging technologies like augmented reality, virtual reality and artificial intelligence and have a focus on IoT security.
New types of artificial intelligence, the insecurity of things, virtual and augmented reality, and growth in service businesses will be key stories to watch at the 2017 Consumer Electronics Show. Accenture has identified these stories based on our latest interactions with executives from the consumer electronics industry, as well as data and insights generated from our various research initiatives. Headlines for each story are directly below followed by further details.
Artificial intelligence moves to mainstream
The impact of artificial intelligence has been a growing storyline at CES in the past few years. But at CES 2017, it will be a more dramatic and pervasive story than at any previous CES. Don’t be surprised if AI coalesces into the story of the show. Without question, the importance and opportunity of artificial intelligence in consumer products and services will be top of mind with participants.
AI uses software algorithms and programs to make computers think, predict, learn and solve problems more like humans. One purpose of AI is to help companies create more personalized services and efficiencies for people. While this remains a challenge given the complexity and variability of human thought and needs, substantial progress is being made in allowing AI to begin to solve real problems and simplify lives.
At CES, expect to hear about more new AI applications technologies, products, services and applications than ever. AI applications for the automotive, smartphone, robotics, and health and fitness markets will be especially prominent. Anticipate stories about new robotics process automation technologies that improve a wide range of business processes. Look for news about AI use in a range of products that ascertain whether you have an impending issue, such as a defective device, and then alert you to the problem.
The AI market has the potential for a steep growth trajectory. By changing the nature of work and spawning a new relationship between people and machines, the technology could double annual economic growth rates by 2035, and boost labor productivity by up to 40%, according to the Accenture Artificial Intelligence Report. BofA Merrill Lynch Global estimates the AI and robot market could total $153 billion by the year 2020 – $83 billion for robots and $70 billion for AI.
AI has the potential to enhance lives of humans, drive economic growth, transform business processes by making them more intelligent and provide a more effective way for machines to interact with humans rather than the other way around.
AI can deliver more personalized experiences to the growing number of consumers. Leveraging AI techniques, companies can move customer relationships beyond superficial to deeper, more meaningful interactions and experiences that engage customers at unprecedented and hyper-personalized levels such as proactively delivering an ad to a consumer on a smartphone that is of high interest to them.
Think intelligent assistants
Intelligent assistants are one of the new types of consumer electronics devices. Designed to make our lives easier, they can do everything from tell you the weather, play music, control your home temperatures and alert you if late for a meeting. These new types of devices and services will take center stage at CES. With holiday sales of the products expected to be brisk, it’s likely there will be a gaggle of new assistants introduced at the show. Watch for storylines focused on the availability of platforms into which intelligent assistants can be plugged.
Two trends are driving demand for intelligent assistants: growing dependence on messaging for communications and the availability of platforms for building intelligent assistants. Messaging platforms such as Facebook Messenger and WhatsApp, which have become popular with more than 1 billion monthly users, could evolve to become a one-stop shop for messaging, entertainment and payments. Expect to see these platforms being more widely used in consumer electronics products.
The global intelligent virtual assistant market is projected to expand at 32% from 2016 through 2024, according to Transparence Market Research. The market amounted to $627 million in 2015, and projects to be $7.9 billion by 2024.
Insecurity of things still a very big thing
We learned at last year’s CES show that the “internet of things” is not immune to one of the market’s most vexing issues: security. The insecurity of things will again be a very big thing at CES. Don’t be surprised if the insecurity story is more profound at this year’s show than at the 2016 gathering (why?).
The IoT market must address these security challenges to reach its potential. The seriousness of these security concerns were described in a new U.S. Department of Homeland Security report titled “Strategic Principles for Security the Internet of Things,” which says:
“The time to address IoT security is now. Many of the vulnerabilities in IoT could be mitigated through recognized security practices, but too many products today do not incorporate even basic security measures. There is a lack of incentives for developers to adequately secure products, since they do not necessarily bear the costs of failing to do so. While the benefits of IoT are undeniable, the reality is that security is not keeping up with innovation.”
This underscores the serious potential impacts security breaches can have for businesses. Watch for news about companies collaborating to develop core standards for application development, end-to-end security capabilities, data capturing technology, embedded analytics to extract the full value of data, consumer-friendly interfaces with easy-to-understand metrics and higher bandwidth capabilities. Look for unveilings of end-to-end security offerings for the IoT market including application development, device and application testing, embedded hardware and software, and connected products and platforms.
The ubiquity of IoT in the home is inevitable. The potential benefits – lower energy costs, greater security and more personalized services to name just a few – are too promising for this market not to succeed. This market opportunity will one day connect more people in their homes to more devices, more networks, more service providers, more applications and more services than ever before.
But roadblocks are numerous. Consumers fear these security issues. Hacking the home video feed invades their privacy. A breach into their home thermostat can provide details about when they are away from home.
Embracing virtual and augmented reality
CES attendees will experience virtual reality and augmented reality offerings on a larger scale and depth than previous CES events. These technologies and markets are rapidly evolving. Transforming the way individuals interact with each other and software systems, VR and AR create more immersive human experiences. While already popular among gamers, expect to see more AR and VR products and services unveiled than ever at CES such as business-to-business connected worker applications.
Beyond visual devices, the products will feature human senses and offer more practical use cases than ever. For example, a company called Feelreal runs a Kickstarter campaign for its VR mask. Enabling consumers to use other senses including smell and touch, the headset is designed to create an immersive experience complete with micro-coolers, micro-heaters and water misters.
The National Basketball Association recently announced plans to show its games next season using virtual reality. Count on more CES stories about using virtual reality on smartphones.
Augmented reality is like a graphic overlay, such as 3D graphics, on a real-time view of a physical environment using a live camera fee or transparent lens. By contrast, VR is a complete immersion in a different reality and experience. AR is more likely to be used for business applications such as data visualization purposes like product identification. Image recognition, rather than barcode scanning, gives a customer more information on each product such as price and specific dietary information.
Digi-Capital forecasts the AR/VR market could hit $150 billion in revenue by 2020, with AR taking the bulk at around $120 billion vs. $30 billion for VR.
At your services
CES 2017 will feature product companies pivoting to become service businesses. Offerings from these companies will connect new types of artificial intelligence services on smartphones to new types of artificial intelligence services on fitness monitors, home thermostats and security surveillance cameras. CES will be about connecting the dots between digital, operations, technologies and strategies of consumer electronics companies. By doing so, products, services and platforms that these companies roll out at CES will perform at higher levels and lower cost and get delivered to market faster.
This year expect to see consumer electronics connecting within new digital infrastructure and services being adopted so companies can be more competitive, relevant and differentiated in the consumer electronics marketplace.
Apple’s success in the service business is a great example of how consumer electronics companies are growing their services businesses. The company’s services business, which includes Apple Music, Apple Pay and App Store, has been growing rapidly. Count on consumer electronics companies showing how they are pivoting to delivering new digital services. And this year there will be storylines around how consumer electronics companies are “connecting the dots” within their companies between digital, operations, technology and strategy.
John Curran is a managing director with Accenture’s Communications, Media and Technology business. He can be reached at john.p.curran@accenture.com.
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