CES 2019 Recap: Data & Invisible Innovation
We kicked off the new year by attending the Consumer Electronics Show (CES), one of the largest technology trade shows in the world, with nearly 200,000 attendees. The show is the epicenter for the global technology industry, featuring glitzy new product launches, innovative future concept designs, and in-depth discussions about the challenges and opportunities new technologies face. This year, we met with a variety of C-level executives, attended events and demonstrations hosted by cutting edge start-ups and industry bellwethers, and explored the endless exhibition halls – all to see what the future of technology looks like.
Despite elaborate booths and flashy demonstrations, setting out to ‘see’ the future of technology was the wrong approach. Even for a consumer electronics show focused on how ordinary people will interact with electronics in their everyday lives, the trend is clear: technology is no longer about physical improvements to gadgets. The future of technology is invisible data: how its collected, processed, and ultimately utilized.
Devices are getting Smarter
Over the last couple of years, consumer electronics companies have learned the hard way that introducing a new model that’s thinner, lighter, sharper, and/or faster than the previous version doesn’t impress consumers like it used to. All but the earliest adopters among us are unlikely to ditch our unbelievably realistic 4k TV for an even-more-unbelievably realistic 8k TV any time soon. As a result, firms have had to improve their products in a way that doesn’t show up in physical characteristics – they’ve had to get smarter.
The way to make things smarter is to connect them to the internet. With this connection, a device can take commands from an app on your phone, or via Amazon Alexa or Google Assistant. It can transmit data and updates in real time or connect to websites offering relevant products or services. It may also sense and analyze its surroundings to more capably perform tasks. TVs have long been on this trend, but falling chip costs and improving internet infrastructure (see 5G below) has made internet-connectivity table stakes for virtually all new gadgets. Even things that we never thought of as devices, like refrigerators, closets, street lights, and doorbells are now internet-enabled and capable of sharing information and receiving commands.
The key question is whether consumers want smarter devices. Electronics companies must remember that smarter is only a feature when its useful. We believe that while undoubtedly there will be missteps, the potential growth for the Internet of Things (IoT) remains enormous as internet connectivity can be transformative for a host of segments. From smart cities that actively monitor and manage energy usage, waste, and traffic, to smart homes that make domestic chores easier, there is demand for smarter devices.
5G is the New Data Superhighway
It’s easy to get swept up in the raw speed numbers for 5G – bandwidth could be 20-100 times faster than 4G. But equally as important is that 5G networks will support much lower latency (20x) and higher capacity (1000x) than prior standards. In a world where streaming high definition video to your cellphone already happens instantaneously, it’s easy to be skeptical of why this new technology matters. Yet 5G is not just another marketing trick to get people to buy more data. Telecom companies don’t spend an expected $326 billion on infrastructure and equipment upgrades for just a marketing term.1
Instead, 5G is expected to open the floodgates for data-intensive and speed-sensitive use cases, many of which are still impossible on today’s 4G systems. This includes autonomous vehicles, which require sending and receiving massive quantities of data to the cloud for navigation and entertainment, while also depending on near instantaneous communication with other vehicles and infrastructure for safety. It also includes high-stakes tasks in health care and emergency response, where operators using augmented or virtual reality could instruct a surgical robot or search & rescue robot in real-time life or death situations. It could enable new features on commercial robots in imaging or detecting objects and people, as well as mapping and navigation within a warehouse or more unstructured environments. And last, it is expected to allow for the connectivity of billions of Internet of Things (IoT) devices to collect and receive data.
All-in-all, we’ve barely scratched the surface for what 5G can enable and engineers are aggressively looking at how to leverage this new technology. Yet we believe that as this new technology emerges, it could create profound opportunities for producers of semi-conductors that enable internet connectivity, network service providers that connect devices to the internet, and device makers that will create smart devices that can take advantage of this new data highway.
Tech and the Automotive Industry Converge
Another key focus at CES this year was the convergence of tech and the automotive industry. Encompassing an entire exhibition hall, this trend was represented by dozens of car companies, parts manufacturers, and tech firms touting their efforts to transform the transportation industry. Despite head-turning car designs from the future, the pressed sheet metal and liberal use of interior flat screens was not the real innovation. Rather, the advancements came from the less-visible efforts to utilize technology and data to improve the transportation experience.
Many of these features only exist in the cloud or hidden under the car’s hood: powerful semi-conductors collecting and processing terabytes of data to improve autonomous driving and provide additional safety features; partnerships between auto manufacturers and leaders in artificial intelligence to install voice-commanded smart assistants in vehicles; smaller and lower cost LiDAR units that can image roads and detect objects more efficiently for autonomous vehicles; electric motors and batteries powering a host of sedans, trucks, and sportscars for both enhanced performance and lower emissions; smarter onboard computers that can recognize passengers and optimize a car to their preferences; agricultural applications of artificial intelligence and autonomous vehicle technology in tractors and drones.
Each of these trends signifies a major transformation in the auto industry, moving to one where performance will increasingly be measured in bytes and hertz, not horsepower and torque.
While impossible to fully encapsulate CES in a single blog post, given its stunning breadth and magnitude, the trend of data & invisible innovation was pervasive at the conference and consistent with broader global trends. Data is quickly becoming the most valuable resource on the planet, and services, software, and devices that collect, transmit, or utilize it effectively are set to become increasingly intertwined with our daily lives. With the explosion of connected devices, the focus on advancements in data infrastructure, and the application of technology to older industries, this year’s CES is likely an accurate harbinger for the future of technology.
SNSR: The Global X Internet of Things ETF seeks to invest in companies that stand to potentially benefit from the broader adoption of the Internet of Things (IoT). This includes the development and manufacturing of semiconductors and sensors, integrated products and solutions, and applications serving smart grids, smart homes, connected cars, and the industrial internet.
DRIV: The Global X Autonomous & Electric Vehicles ETF seeks to invest in companies involved in the development of autonomous vehicle technology, electric vehicles (“EVs”), and EV components and materials. This includes companies involved in the development of autonomous vehicle software and hardware, as well as companies that produce EVs, EV components such as lithium batteries, and critical EV materials such as lithium and cobalt.
BOTZ: The Global X Robotics & Artificial Intelligence ETF seeks to invest in companies that potentially stand to benefit from increased adoption and utilization of robotics and artificial intelligence (AI), including those involved with industrial robotics and automation, non-industrial robots, and autonomous vehicles.
AIQ: The Global X Future Analytics Tech ETF seeks to invest in companies that potentially stand to benefit from the further development and utilization of artificial intelligence (AI) technology in their products and services, as well as in companies that provide hardware facilitating the use of AI for the analysis of big data.
LIT: The Global X Lithium & Battery Tech ETF invests in the full lithium cycle, from mining and refining the metal, through battery production.