CES 2011: Day 1

Struggles in Mobile Devices

CES 2011 has 28 conferences within the event. These provide an opportunity to explore technologies and topics in more detail. One was the Smart Phone and Tablet Conference. It began on Wednesday January 5, 2011; one day before CES actually opens and ran 2 days. This is a report from the first day.

CES 2011, Las Vegas

There were 5 sessions focused mostly on content to smartphones and tablets, with approximately 7 individuals on the panels for each session. Given that the event was organized by Digital Hollywood the emphasis centered on content. Some of the panels also had members from hardware companies, who seemed largely out of place. Overall the panel structure resulted in a disjointed poorly organized event. Not a single presentation was given and no panel member spoke individually. The result was just talk and some audience questions. From this, however, some interesting insights surfaced.

Many of the panel members represented content providers, from news to magazines to cable. They are all struggling to adapt to the new environments presented by the iPhone, iPad and Android. Little else, in terms of platforms, was talked about. The diversity of platforms cited was:

• HTML – especially FLASH
• iOS
• Android

These platforms make it difficult for developers to create once and target for all platforms – in large part it means creation for each platform. Given the high development costs producers are being very cautious about adopting platforms outside of the big 3 above. They all asked for the “old Web” model where one could develop for one platform and it could play on all the browsers. Many cited that the ability to develop for one but target for all was essential, going forward. To them, it is seen as a technology issue.

Business models in flux. The premium subscription model was praised but few spoke of success. Over and over the free app was described as the entry. It is hoped that the forthcoming addition of micro-transactions by Apple will make the free model viable.

Another issue cited was app price elasticity. One producer stated that some copies were sold at $4.95 but as the price went to $2.95 the sales significantly increased. Now the app is free.

Examples of some of the best content cited were: Popular Science and Sports News (category). It was also asked – can these high cost content products have a positive ROI over the long term?

It is impossible to predict a priori what consumers will like and use.

Frequent references were made as to how content was disclosed on Facebook, Twitter  included, and stories WERE picked up by bloggers and the adoption of content accelerated. One reference was to how successful Twitter Parties are and when the audience was asked – do you know what a Twitter party is, only a few hands went up. The role that social networks are playing was described as “out-of-channel” distribution and marketing.

This social layer of consumer involvement involves the close coupling with consumer activities on social platforms. The problem is that consumers drive this space not the content providers.

Reference was made to a next major step – when applications can communicate between themselves. Another example of a future technology direction was in “gesture workflow” where all functions, including productivity, could be done with just a gesture interface.

On multiple occasions the dilemma of privacy and identity was cited. Complaints were made about the lack of app buyer information from Apple. On the other hand it was stated that once one registers with Google – privacy is gone. It was speculated that issues of privacy and the use of individual information will be a source of tension for the next 5 years.

Developers cited the value of Notifications. Apparently only a few apps use this and the ones that do, as mentioned on the panel, find this a valuable tool, especially to market their presence on the platform.

The fragmentation of the Android platform, due to various screen sizes, was stated to be a Google issue while it was just the opposite for Apple.

The control model of Apple was only cited in passing.

iPads were all over the room with the attendees.

Assessment

The environment was surreal. Apple was everywhere but not present. It controls the business existence of many and stands alone on its own terms.

Virtually every presenter was focused on the iPhone and iPad, but the emphasis placed on them was taken for granted. Apple has made all of this happen, the iPad is less than a year old and Apple is absent. The only way one sees Apple at CES is through the impact it has. Apple only plays by its own rules but remains omnipresent in absentia.

The issue was raised several times: what will be the long term impact of the tablet on the notebook? Most saw the tablet as a consumption device and the notebook as a creation device. One panel member was more forward-looking; the Mac Air is only a transition device. Watch when Air has a screen which rotates and lays flat and the screen has touch. This will bring iPad-like interaction to the notebook. It is then the convergence device. Bingo! Under these conditions Apple has set the bar again on the question – what mobile technology is relevant in the market?

At the same time, the stakes for any existing or new mobile device player without significant market share, is that they must have a very high value proposition for developers to support the platform. Just being different only means the ROI is difficult to achieve. Cited to illustrate this, in passing, were Nokia and Microsoft. Nokia is non-existent in the US and Microsoft has no market share. A discussion thread about Nokia and its smartphones was cut off by a moderator as being irrelevant.

Participants remain largely dependent on Apple, are caught in the tornado of iPad adoption, and just feeling their way as to what drives consumer adoption for content and apps. It’s a new world that did not exist a year ago. They are on the outside looking in.