Trend Report Digital 2012 by Shelly Palmer

2013 Consumer Electronics Trend Report

Table of Contents

Introduction .................................................................................................. 3

Screen Ubiquity and Diversity ...................................................................... 5

Video Viewing Continues to Evolve Rapidly................................................ 9

The Smartphone as Your Personal Control Center .................................... 13

Digital Health Comes On Strong ............................................................... 15

Connected and Smart Homes Get Closer to a Tipping Point .................... 16

Cars Get Smarter ........................................................................................ 18

Trending Tech You Should Watch ............................................................ 20

Conclusion .................................................................................................. 22

BY: SHELLY PALMER, JIM TURNER & JARED PALMER
COPYRIGHT © 2013 ADVANCED MEDIA VENTURES GROUP LLC
ALL RIGHTS RESERVED

SHELLYPALMER.COM © 2013 PAGE 2 OF 23


Introduction

Welcome to the Shelly Palmer 2013 These are big numbers and they are only
Consumer Electronics Trend Report. In going to get bigger — but what do they
the next few pages we offer a brief over- mean?
view of the consumer electronics trends
that will have the biggest near-term im- In my new book, Digital Wisdom:
pact on consumer behavior. Thought Leadership for a Connected World,
I examine how three interesting ob-
Thinner, More Powerful & Higher served laws converge to offer meaning to
Res statistics like these:

For everything with a screen, the trend 1) Moore’s Law proposes that the num-
will continue to be be thinner, more ber of transistors on integrated circuits
powerful and higher resolution. But that doubles approximately every two years.2
doesn’t mean that it’s business as usual. This isn’t accurate, it’s more like one
year, and the rate of change is accelerat-
According to research by the Consumer ing. But it does speak to the idea of ex-
Electronics Association (CEA), the or- ponential growth.
ganization that stages the Consumer
Electronics Show (CES) smartphones 2) Metcalfe’s Law posits that the value
sales will see continued growth in 2013 of a telecommunications network is pro-
and will remain the primary revenue portional to the square of the number of
driver for the industry. connected users of the system (n2). The
math here is debatable too, but it is very
Shipment revenues for smartphones are obvious that the value of a network in-
expected to reach $37 billion in 2013, creases with the addition of each addi-
with more than 125.8 million units tional user, the only question is, by how
shipping to dealers, up 16 percent from much?
2012. Tablet computers also are ex-
pected to see phenomenal growth. In 3) Kurzweil’s Law of Accelerating Re-
2013, unit sales of tablets are projected turns is the thesis of his book The Singu-
to surpass 105 million (up 54 percent), larity is Near and he observes that the
resulting in $35.6 billion in shipment rate of change in a wide variety of evolu-
revenue, up 22 percent year-over-year.1 tionary systems tends to increase expo-
nentially. This is the least obvious of the

2
Gordon E. Moore, "Cramming More Components onto
Integrated Circuits," Electronics 38.8 (April 19, 1965: 114-
17
1
CEA Press Release. ftp://download.intel.com/research/silicon/moorespaper.pdf.



three laws, but understanding the expo-
nential rate of technological progress is
critical to understanding how consumer
behavior will evolve.

When taken together, these three laws,
which are not really laws, but rather ide-
as — help add context to the CEA’s re-
search. You can intuit that rapid and
remarkable socioeconomic change will
start happening faster than we can plan
for it. The speed will continue to accel-
erate, and the “network effect,”
(Metcalfe’s Law) will empower consum-
ers in ways that will stretch the limits of
our imaginations.

While reading this report, try to keep
these three conceptual laws in mind and
think about how, when taken in context,
technologically empowered consumers
will impact your business.



Screen Ubiquity and Diversity
Only a few short years ago, conventional Tablets and smartphones together now
wisdom held that people preferred to out-ship computers; over two thirds of
watch long content on big screens and Americans plan to buy a tablet, most of
short content on small screens. Today, them in the next two years.3
viewer data confirms that people will
watch content of any length on the best We will look at the devices and explore
available screen. Manufacturers are now the implications of this ubiquity and di-
using a "Goldilocks Strategy" searching versity.
for screen sizes that are, "just right" for
targeted user cohorts. Screen size gives Television
context to the user experience allowing
users to choose how, when and where The business is in transition. Shipments
they want to watch, play and interact in were down 7% in Q3 2012 and the trend
a connected world. continues. Average screen size increased
5% to 35” with larger screens steadily
Cognizant of this shift, flat screens are increasing in market share.4 This reflects
getting smarter, and content and appli- just how fast manufacturing technology
cations are getting delivered on a dra- is developing and how quickly prices are
matic range of screen sizes and device deflating—bigger, slimmer, cheaper is
feature sets. We are beginning to see de- what you need to remember.
vice convergence—smart TVs are be-
coming more and more like tablets and Major topics of discussion for 2013 in-
smartphones, and tablets and clude: OLED, Ultra HD (a.k.a. 4K),
smartphones are becoming more like Smart TVs and, of course, the new com-
televisions, thanks to TV Everywhere. petitive landscape.

However, this doesn’t tell the whole sto- Organic LED (OLED)
ry. Second screen experiences (i.e. using
a secondary connected device while us- With respect to resolution, Organic
ing another) are redefining content con- LED (OLED) TVs have been the "next
sumption and interaction. big thing" for over two years, but the
technology is still on the distant horizon.
Television devices will continue to see To understand the clarity and contrast
significant increases in size and resolu- ratio of an OLED screen, imagine an
tion along with subsequent technologi- extremely thin, flexible, bendable, very
cally-driven price deflation.
3
CEA Survey.
4
NPD DisplaySearch Advanced Quarterly Global TV
Shipment and Forecast Report.



low power LED screen with the absolute resolution of currently deployed HD
best display quality available today— sets.
that’s OLED. 5 Although a technologi-
cally imperfect example, just imagine a Size Matters
really big Apple Retina Display.6 OLED
is even better! With respect to resolution and screen
size, industry logic suggests 25” is ap-
OLED smartphone displays are already propriate for standard definition, 50” for
on the market on many Android and HD and now 84”, or larger for UHD.
Windows phones, but sizing up the LG, Sony, Sharpe and Samsung are all
technology to create OLED TVs has offering UHD sets ranging 60-85” cost-
proved difficult because pixel defects are ing between $15,000 and $25,000 USD.
common and current yield rates are still Westinghouse is touting a 110” 4K set
below 10%. for Q1 2013 as well as 50”, 55” and 60”
models. Massive 4K sets will make for
OLED might launch in a meaningful an incredible home theatre experience
way in 2013 (Samsung is rumored to for those trying to keep up with the
have a 55” model in the works). When Jones’.
manufacturers eventually get this right,
you’ll see flexible OLED screens But what does one do with a 4K set?
wrapped around products everywhere— Not a whole lot as of now. Unfortunate-
Times Square meets your local grocery ly, right now, there is almost no native
store! 4K content, so practically everything you
watch on a 4K set will be upconverted
UltraHD (4K) from HDTV (a.k.a. 2K).

TVs may finally be catching up to video Analysts believe that content delivery
camera technology with the advent of will be via blu-ray-like discs or over the
Ultra HD (a.k.a. 4K or UHD). Internet. Prices will drop dramatically
and more 4K content will surely be cre-
4K is shorthand for 4000, which repre- ated in the future. Right now, however,
sents the order of magnitude of the reso- 4K is just a very cool technology that
lution 3840 x 2160 pixels (8.3 megapix- offers a glimpse into the future.
els). This is approximately four times the
number of pixels and therefore twice the 4K May Be Bad For 2K

One immediate impact of Ultra HD
5
may be to scare high-end buyers away
You may hear the technology referred to as “Super
AMOLED,” but this is just Samsung’s proprietary name for from purchasing very large (70" – 90")
its OLED displays.
6
2K HDTV sets. Why spend $9,000
The “Retina Display” found in many Apple products is not
OLED. It is IPS, which stands for “In Plane Switching,"and USD on an 80" 2K set when an 84" 4K
is actually a premium LCD technology that’s known for set is only a few thousand more? It's a
having a wide viewing angle and clear picture.



question every high-end flat screen buyer This past year, Samsung established it-
will be asking themselves in 2013. self as the new market leader in flat
screen TVs with a near-record 26%
3D TV global market share.

For all the hype, 3D never happened. With the top five consumer electronics
With limited 3D content available, ex- manufacturers viciously competing for
pensive glasses needed and oh yeah, an every market share point, this is going to
optimal perpendicular viewing set up, be a great year for consumers.
consumers have spoken with their wal-
lets about the technology and sales are Tablets and Smartphones
fading. 3D is a passing fad -- don’t let
anyone tell you otherwise. All the hype about the mobile revolution
is probably warranted. 821 million
Smart TV (Connected TV) smartphones and tablets were sold glob-
ally in 2012 and 1.2 billion are expected
In contrast to 3D, TVs featuring Inter- to be sold in 2013. 10 Smartphone and
net connectivity (Smart TVs) are grow- tablet shipments also exceeded PC
ing in popularity. Out of 114 million shipments in Q4 and the combined in-
homes, 25 million have Smart TVs, and stalled base of smartphones and tablets
while only half are actually connected to are expected to exceed PCs in mid-
the Internet, 7 fewer still are regularly 2013.11
used for OTT viewing. Although some
headwinds exist because of a lack of in- Where’s all the growth coming from?
dustry standardization, the real problem Not the just the US and China. Vice
is content acquisition and audience George Ferreira, President and Chief
measurement. Operating Officer of Samsung Electron-
ics Africa, announced that with an esti-
Remarkable Competition mated 450 million smartphone users in
2012 that Africa is now the second larg-
The competitive landscape is in transi- est and fastest mobile phone market in
tion. Because of global geo-political
headwinds and Japan’s stagnating econ- enters recession before election - FT.com." FT.com. The
omy, the major Japanese manufacturers Financial Times, 10 Dec. 2012. Web. 6 Jan. 2013.
<http://www.ft.com/intl/cms/s/0/dd3dd156-4278-11e2-
Panasonic, Sharp and Sony are in finan- 979e-00144feabdc0.html#axzz2HA3a9NJ2>.
cial trouble. According to Bloomberg, 9
Yasu, Mariko. "James Bond Can’t Fix Sony as Japan Elec-
tronics Scrape Lows." Bloomberg Technology. Bloomberg
the trio collectively lost $15 billion in LP, 20 Dec. 2012. Web. 3 Jan. 2013.
market capitalization and will be elimi- <http://www.bloomberg.com/news/2012-12-19/james-bond-
can-t-fix-sony-as-japan-electronics-scrape-lows-tech.html>.
nating 29,000 jobs.8,9 10
Gartner Inc.. "Gartner Says 821 Million Smart Devices
Will Be Purchased Worldwide in 2012; Sales to Rise to 1.2
Billion in 2013." Gartner Technology Research. N.p., n.d.
7
NPD Group.
Web. 29 Nov. 2012.
8
Japan has had two consecutive quarters of negative GDP http://www.gartner.com/it/page.jsp?id=2227215.
11
growth. McLannahan, Ben, and Simon Rabinovitch. "Japan Mary Meeker. 2012 KPCB Internet Trend Report.



the world after China.12 Price deflation think about this new set of consumer
is driving penetration rates. For example, behaviors is simply, "people are taking
Chinese manufacturer Huawei is now their TVs with them."
offering a $50 Android-powered 3G
smartphone.13 Don’t be surprised if you
see a $20 smartphone on the market by
2015.

The tablet market is exploding too.
Two-thirds of online consumers expect
to purchase a tablet eventually, with 45%
in the next two years. 31% of Americans
own them, twice as many as last year.14

Tablets are disrupting common practices
in business, education, gaming and me-
dia consumption.

Tablets and smartphones are changing
the way we create and consume content
and our relationship with information.
Even though a video may be seen by
millions of people, you are still watching
it up close (maybe with headphones) and
having an intensely personal experience.
This new intimate relationship with
content is literally is redefining mass
media.

Tablets and smartphones are also chang-
ing the relationship that gamers have
with game consoles. One good way to

12
Biodun Coker. "Nigeria Ahead Smartphone Penetration in
Africa." Business Day. N.p., 27 Nov. 2012. Web. 31 Dec.
2012.
<htttp://www.businessdayonline.com/NG/index.php/market
s/companies-and-market/48068-nigeria-ahead-smartphones-
penetration-in-african>.
13
Lomas, Natasha. "$50 Android Smartphones Are Disrupt-
ing Africa Much Faster Than You Think, Says Wikipedia’s
Jimmy Wales | TechCrunch." TechCrunch. Aol Tech, 10
Dec. 2012. Web. 31 Dec. 2012.
<http://techcrunch.com/2012/12/10/50-android-
smartphones-are-disrupting-africa-much-faster-than-you-
think-says-wikipedias-jimmy-wales/>
14
CEA.



Video Viewing Continues to Evolve Rapidly
Combined with the explosion of screens, Monthly mobile video consumption in
big shifts are taking place as consumers bytes is expected to increase 1000% over
move more fully into on-demand the next three years (See Figs. 2 &3).
streaming consumption of video and
other content. Subscription services are Some key questions for 2013:
growing and also facing new challenges
and competition. Furthermore, new • Will all of this additional video
viewing habits make measurement and viewing burden infrastructure?
monetization of content more complex.
Advertising and marketing opportunities • What will happen to bandwidth
have expanded, but knowing what mes- costs?
sages are effective and understanding the
new currency of engagement is, at best, a • Will limited data plans stunt this
challenge. growth?
EO
VID
The Internet is for Porn! • How will the "network effect"
impact consumer behavior?
So what are people doing with all these
different screens? Mostly watching vid-
eo. (See Fig. 1) On any given night,
Netflix accounts for about one-third of
primetime Internet traffic. Overall video
traffic is expected to grow 26% next year,
and by 2016, it will account for 86% of
all global consumer IP traffic.15 (See Fig.
2) In other words, in about three years
there will be more than 1.2 million
minutes of video content crossing global
IP networks each second. Video con-
sumption is exploding across all plat-
forms, especially in the mobile space.

15
Cisco VNI, 2012.



Global Consumer Internet Video Growth of Global Consumer
2012 by Category Internet Video by Category
(PB per month)
50
4.5% 3.6% 1.0%

Exabytes per month
40
9.8%
30
10.3% 20
60.5%
10
10.3%
0
2012 2013 2014 2015 2016

Figure 1 Figure 2

Global Consumer Internet Video US New Media Set-top Box
2016 by Category Distribution
(PB per month) Game Consoles
11%
5.3% 2.8% 14%
DVR

17.8% 56% Smart TVs & Blu
40.4% 22% Ray Players
Tablets
8.4%
44%
OTT Boxes
12.8%
12.4%

Figure 3 Figure 4

Rationale for TV Content Weekly Video Consumption
Streaming by Device
92%
100%
% of Consumers

Cancelled cable 5%
75%
41%
Cut back on cable 6% 50%
25% 12% 10%
Catch up on shows
40%
discovers after 0%
Catch up on missed
73%
episodes of TV
0% 25% 50% 75% 100%

Figure 5 Figure 6

Source: CEA Research, Cisco, VNI 2012.



Content Ownership in an On- Microsoft has the unique opportunity of
Demand World establishing itself as the central home
media platform for the next five years.
The traditional concept of owning con-
tent is shifting as we move toward a fully Content Deals
on-demand world. Subscription services
from Netflix, Amazon, and HuluPlus As good as this all sounds, the elephant
are reshaping behavior (See Figs. 5 & 6). in the room has several file cabinets of
Whereas physical media sales are down existing content deals on its back. The
4%, continuing a longer trend, rentals cost of creating a virtual MSO is astro-
and video-on-demand Multi-systems nomical. Very few companies have the
Operator (MSO) are down 18% and funds to replicate a cable operator or, to
subscriptions and streaming are up realistically provide the fantasy tech-
25%.16 panacea... a la carte cable content. It
may happen, but it is going to take an
Consumers are becoming more com- astonishingly large sum of money to ac-
fortable with less ownership and more complish the task. Yes, the technology
streaming. exists. No, the deals have not been
done. Just because something is techno-
Content costs are rising and so expand- logically possible does not mean that it is
ing streaming libraries is proving to be guaranteed to happen in a reasonable
quite expensive. When consumers can time frame.
access content on a What I want, Where
I want, When I want (WiwWiwWiw), New Measurement Headwinds,
basis filters become paramount, especial- Advertising and Monetization
ly when there are mutually exclusive
content libraries available. The rapid growth of second screen and
borderless viewing is going to require a
OTT & Xbox complete overhaul of measurement
technology and a revision on generally
We will see new services that bundle and accepted content release windows. 17
filter OTT services and content very Managing release windows will continue
soon (See Fig. 4). These services could to be the best way to maximize profita-
find themselves as smart TV apps, set- bility.
top-boxes, media centers or most likely,
game consoles. Out of 70 million Xbox
17
360 units, 40 million have Xbox Live Windowing is a term-of-art that content publishers use to
subscriptions. With a new Xbox unit describe the act of delaying distribution of content on various
channels until the previous distribution channel is properly
likely to ship by YE2013. yield managed. Although, there are many, many variations, a
typical widowing schema for a major motion picture might
be: Theatrical release => DVD (home entertainment) =>
Hotel => Pay Per View => Premium Cable => Broadcast
Television => Online.
16
CEA Research.



Second screen viewing has the capability Borderless Viewing
to amplify or dampen viewer engage-
ment. But remember, unlike television Borderless viewing, the ability to watch
ratings and share, engagement is a con- the same video on multiple devices, is an
cept, not a metric. There are no gener- emerging trend and a disruptive behavior
ally accepted measurement practices or that is complicating pricing models and
pricing models for engagement. contextualization.

Multi-Tasking How should ads be priced when the two
viewing devices have different interac-
A recent study by Google, Ipsos and tive, technological and location-tracking
Sterling suggested that viewers watch capabilities and traditionally different
TV with another device in hand 77% of advertising metrics? That is "the" ques-
the time 34% with a PC/Laptop and tion. Without better metrics, we will see
49% with a smartphone or tablet.18 Apps more and more legal bouts over content
like GetGlue and Viggle attempt to cap- rights.
italize on this multi-tasking behavior,
but they lag far behind Twitter.

The Social Media Wildcard

Even as Twitter ups its efforts to inte-
grate with live network TV content,
there is still an unanswered question of
causation vs. correlation. Which phrase
is true "I Tweet, therefore I watch." or,
"I watch, therefore I Tweet." So far, the
answer is elusive and the relationship of
Twitter mass and velocity on TV ratings,
advertising and product sales has yet to
be determined or fully understood.

People have clearly demonstrated that
you can use Twitter to overthrow gov-
ernments – it is unclear if tweets can
help sell toothpaste.

18
Google Research. "The New Multi-screen World: Under-
standing Cross-Platform Consumer Behavior." August
2012.



The Smartphone as Your Personal Control
Center

Smartphones are intensely personal de- Global socioeconomic and cultural adap-
vices. They are always on, they live in tation is the major catalyst for the mo-
our pockets and purses, they even come bile revolution. It is a joint effort be-
to bed with us. Because we are insanely tween manufacturers, society and politi-
attached to our smartphones, our cal institutions.
smartphones are very "smart" about us.
Ubiquitous Access to The Network
So, when are we likely to see the
smartphone evolve into a true personal If you watch television, you are sure to
digital assistant? When will it become a have noticed that both Verizon and
control surface for our other digital de- AT&T claim 4G network dominance in
vices? When will privacy laws, cyber- the United States. Carriers and cablers
security and business rules allow us to alike are offering free Wi-Fi in public
truly enjoy the benefits of connected liv- spaces. Retailers, advertisers and pro-
ing? The answer is: now. moters of all kinds are offering free WiFi
in retail stores, coffee shops, concerts
Exo-digitally Enhanced Humans and wherever practical.

It’s curious and misleading that we still The statistics are not important because
refer to these devices as phones since the trend is clear – we are heading to a
they have evolved into something so time of ubiquitous network access.
much more powerful. Coupled with
Near Field Communication (NFC) Geeky Stuff Going Mainstream
chips, GPS and Bluetooth connectivity,
they are personal electronic command Use of QR codes has increased 350%
centers used for digital communication, since 2011 for “frequent scanners” (those
navigation, commerce, Internet access, who have scanned at least 20 QR
social networking, photography, video, codes). 19 This trend will continue as,
security, music, TV, health monitoring what was once considered "geeky" be-
and gaming. (See Verizon's advertising comes mainstream. Access to technology
campaign for HTC's Droid DNA.) As will continue to alter consumer behav-
our central communication and enter- ior. More people will Tweet tomorrow,
tainment hub, they are truly an exo- than Tweeted today. More people will
digital extension of us; they are the hu- manipulate images tomorrow, than ma-
man body’s first external digital organ.
19
CEA Research.



nipulate them today. More people will fined as "access" to content stored in a
use their connected devices to control remote location. But, it is important to
their thermostats tomorrow, than do so keep in mind that there is a remarkable
today – and on, and on and on. amount of computational power that is
being accessed remotely – this trend will
Hyper-personal Experiences continue.

Although smartphones let us share in- In a very short time, smartdevices (not
formation, connect and collaborate with necessarily smartphones) are going to
the rest of the connected world, more create a new class of smarter, better,
and more consumers are demanding hy- faster, more powerfully competitive hu-
per-personalized experiences with their mans. If you outsource your memory (to
devices. Google or Wikipedia), outsource your
way-finding (to GPS), outsource your
Thanks to innovations in big data ana- healthcare (to connected monitoring de-
lytics, our smartphones are getting vices), etc. You are guaranteed to be
smarter every day; they are adapting to better at the doing of life than someone
our own unique behaviors, interests and who is not "exo-digitally enhanced."
preferences across the entire scope of our
digital (and even analog) activities. Our tools are evolving exponentially
faster than our ability to interpret how
The Cloud Changes Everything the tools will impact our world. This
may be the most important trend of all.
Cloud storage, the ability to seamlessly
and remotely access and share files across
platforms and devices, is altering the way
we think about and do business. The
other half of the equation, and often less
discussed, is Cloud computing, which is
the ability to remotely process infor-
mation.

Taken together, virtually unlimited stor-
age and unlimited computational power
will significantly change the form and
functionality of our devices in the near
term.

Now, practically every connected device
can access audio, video and data from
anywhere in the Cloud. The concept of
content ownership in 2013 is being rede-



Digital Health Comes On Strong
The recent explosion of interest in Another awesome use of mobile tech-
healthy living, wellness, fitness and bet- nology is remote diagnostics, which
ter disease management is finding its connect you to your doctor without a
way into consumer electronics. This ar- physical visit. Continua Health Alliance
ea has grown 25% at CES since last year is an industry organization with more
with over 210 booths dedicated to this than 220 members that enables end-to-
market.20 end plug-and-play connectivity of devic-
es based on existing communication and
Alliances Taking Shape data platforms for personal health man-
agement and healthcare. The industry
New industry alliances are creating group also certifies services and publishes
standards that enable biometric sensors, standards; with 70 devices certified so
diagnostic devices, health data and rec- far, it is a huge success.
ords and healthcare professionals to all
communicate easily. Dr. McCoy's Medical Tricorder is
Almost Here
Everything Has A Companion App
Digital health and wellness is nascent,
Once again, smartphones are at the cen- but the technology promises remarkable
ter of it all receiving the information outcomes in our connected world. The
from wearable devices and tracking, trend is clear and the progress is obvious.
communicating and managing your digi- Within three to five years, we will see
tal health. this technology enhance the work of
physicians and health professionals on a
Biometrics and sensors plus a wide range global basis and, more importantly, offer
of apps connect your health profile to basic health and wellness services to an
your smartphone. ANT+ is an emerging explosively large patient population.
standard for the interoperability of sen-
sors, primarily for fitness. Organized by
a subsidiary of Garmin, it has more than
300 members including Adidas, Mi-
crosoft, Sony Ericsson and Trek. With
over 320 products, it is an example of
how industry standardization can benefit
consumers.

20
CEA Research.



Connected and Smart Homes Get Closer to
a Tipping Point

Capabilities are increasing, major players smartphone, but it won’t give you up-
are entering the market and costs are dates you on your Samsung washer and
falling for systems that provide security dryer. Expect this trend to continue as
for your home, monitor your energy us- manufacturers try to build brand loyalty
age, control your lighting and media in a highly competitive market.
consumption, monitor activities in your
home, provide remote control of locks In practice, this makes sense. Manufac-
and systems and much more. turer X wants to sell as many Manufac-
turer X's products as possible, but con-
Standards Are Emerging sumers don't want to download and use
a different app for every different device
Several interoperability standards are in their home. Third parties are already
simplifying the systems, and with the starting to create universal control apps
ability to use your smartphone as the and unless the manufacturers change
control center, as well as having it “tell” their strategic direction, this trend will
your home when you arrive and what continue. Expect a great business for
you want, these systems are growing in third party developers and a missed op-
popularity. portunity for appliance and CE manu-
facturers. Historically, the biggest man-
Smart Appliances ufacturers do not cooperate with each
other -- this is a trend that will probably
Remember George Jetson’s apartment in continue.
Orbit City? Well, we aren’t quite there
yet, but we are certainly on our way. Entertainment
Connected appliances are penetrating
the home. Conversely, much like in home monitor-
ing, smartphones and remotes are con-
Not Smart Manufacturers verging on the entertainment side of the
business. Apps like Roomie and iRule
Akin to what we are seeing in the are IP controllers that, along with Glob-
smartphone, tablet and computer mar- al Cache hardware, transform your
ket, appliance manufacturers are keeping smartphone into a universal remote. On
their platforms and ecosystems separate. the other hand, remotes are getting
smarter. Many now have touch screens
LG’s THiNQ app will work on any and smartphone-like interfaces, such as
Logitech’s new Harmony Touch. Also



worth noting is Xbox SmartGlass, which
turns your smartphone (and its key-
board) into an Xbox remote and with
some apps, into an interactive second
screen too.

Security and Control

Hello SkyNet. Of those consumers in-
terested in home automation systems,
62% said it was motivated by security,
including fire and smoke monitoring.21

There are a few home automation stand-
ards (Z-Wave, ZigBee, etc.) emerging
that are promoting a lot of co-opitition,
which is great for homeowners.

Connected consumer products for home
security, lighting and energy (by time
and activity), temperature control, video
surveillance, baby monitoring, motion
sensors, garden irrigation and locking
doors are all on the market now -- and
not only is there an app for that -- most
are controllable across platforms.

Although not at CES, Lixil has a
smartphone-controlled toilet (lid up and
down, flushing, even monitoring and
recording of bowel movements). We're
hoping this is not a trend.

21
CEA Survey.



Cars Get Smarter
New systems to “mirror” your systems based on traffic patterns in the
smartphone onto your car’s dashboard near-term.
along with biometric sensors that moni-
tor your stress, drowsiness, and driving The trend is clear. Your smartphone
needs are bringing new intelligence to and your car are both in the Cloud – the
automotive systems. auto industry is committed having the
technology work together to enhance
GM is adding “Siri” to its lowest end your experience.
cars and Ford is expanding its electronic
services across its models. Expect great strides in the follow-
ing areas over the next few years:
These two along with Audi, Mercedes,
and others all are adding systems that • Access and Egress to the vehicle
link to your smartphone to adjust the (Seats, mirrors, heat, door locks,
car’s settings and services to your needs trunk)
as well as your specific location.
• Way-finding (Enhanced GPS,
144 million Americans spend approxi- cartography and mapping)
mately fifty-two minutes driving each
day, and 76% of them drive alone. The • Vehicle service (needs analysis,
car is quickly becoming a member of our appointments, locations)
personal digital ecosystem in a safe,
smart and enjoyable way. • Relevant, contextual location-
based advertising
Touch screens and voice recognition are
helping our car computers feel more like • MoSoLo (Mobile/Social/Local)
our smartphones. features

There are also improvements in safety in • Personal preferences (memory,
the works. Mercedes Benz already has intelligence, learning)
Attention Assist, which monitors a driv-
er’s drowsiness. Toyota is testing ges- • Enhanced entertainment (music,
ture-based controls and face recognition games, video)
systems. Ford is rumored to be testing
seat-belt respiration sensors and steering
• Connected living features (social
wheel heart rate sensors. In addition,
networks, email, txt, apps)
Ford will be rolling out phone-disabling



• Driver safety (inter-vehicle
communication)

• Vehicle movement (traffic Jam
avoidance, parking space reserva-
tions)

• Interfaces with other modes of
transportation (railroads, airline
schedules)

And, expect the entire industry to work
hard to figure out how it can do all of
this while complying with new National
Highway Traffic Safety Administra-
tion guidelines around distracted driv-
ing.

Paul Mascarenas, Chief Technical Of-
ficer at The Ford Motor Company says,
"Eyes on the road, hands on the wheel,
is our first priority." On this issue, he is
clearly speaking for the entire automo-
tive industry.



Trending Tech You Should Watch

There are several interesting technolo- Payment Systems
gies that you should pay attention to this
year. Some are already very mature, oth- The mobile payment system market is
ers are nascent, but topics listed here are booming. 1 in 5 mobile users purchased
newly relevant in the context of how something on their smartphone in
they will impact consumer behavior and 2012.22 Square Inc. tripled its user base
the doing of business in 2013 and be- last year. With 3 million users, 7000 new
yond. Starbucks locations and 250,000 mer-
chants using Square Wallet, the compa-
Robotics ny is processing over $10 billion in
transactions annually. Square is currently
Consumer Electronics robotics is still experimenting with taxis and will be in-
mostly about robopets and automatic troducing gift cards too.23
vacuum cleaners, but it won't be for
long. Anthropomorphic robots have Gesture and Face Recognition
been popularized by science fiction mov-
ies, but robotic helpers do not need to be Now that practically every device in-
in human form to be useful. cludes a camera, gesture control and face
recognition software is starting to im-
prove. While still more of a parlor trick
3D Printing
than a paradigm shift, the trend is clear
– our tools are going to know how we
As it becomes more user-friendly and move and react to our movements. This
cheaper, 3D printing has the potential to will change research, as well as gaming,
upend traditional economic concepts of and almost every field where tracking
supply and demand. Users will be able to movement makes sense.
create just about anything as long as they
have the designs and composite material. Connectivity Expansion: NFC and
The "maker movement" is just begin- WiFi
ning.

Spare parts will give way to printed re-
placement parts, and piracy will take on 22
CEA Survey.
a whole new meaning when someone 23
Rao, Leena. "Square Now Processing $10B In Annual
steals your CAD/CAM file and prints Payments; Added $2B Over Past Month (And That Doesn’t
Include Starbucks) | TechCrunch." TechCrunch. Aol, 14
the necklace it took you two years to de- Sept. 2012. Web. 6 Jan. 2013.
sign. <http://techcrunch.com/2012/11/14/square-now-seeing-10-
billion-in-annual-payments/>.



A fascinating use of NFC is Samsung's UnGaming
TecTiles, which allow users to create
their own NFC Tags. These stickers Handheld games have come along way
when tapped by an Android powered since the original Nintendo GameBoy.
Samsung smartphone execute a pre- Apps have replaced cartridges and with
determined task on the device. Users can better and better screens and graphics
create TecTiles to launch an app, make a cards, come better and more fun games.
phone call, send a text message, check in Smartphones and tablets have all but
on Foursquare, update a Facebook sta- turned the stand-alone hand-held game
tus, play a song and a whole lot more. market into a super low budget kids-only
TecTiles are a great example of how our business.
mobile devices are letting us interact
with our physical environment in new The Fading Camera and Stand-
and unique ways. alone Navigation Markets

WiFi’s growth has been extraordinary Phones are replacing both point and
with 1.5 billion devices shipped globally shoot cameras and GPS devices. Again
in 2012 (up 5x in just 4 years), and it is we are seeing functionality convergence
still getting better. 802.11ac (a.k.a. “5G on both sides. Android-powered camer-
WiFi”) is now the fastest WiFi ever, but as with WiFi are hitting the market and
so far there are no hardware devices to camcorders aren’t dead yet. However,
use it yet. WiGig is on the horizon. It’s manufacturers are focusing on mainly
7 times as fast as wired Gigabit Stand- the enthusiast and professional market.
ard. Remember, the speed of infor- The days of the dedicated point-and-
mation is directly equated to economic shoot camera are numbered. As for
success. stand-alone GPS units, and even factory
installed GPS, the clock is ticking. It is
WirelessHD (a communications proto- just a matter of time before these devices
col that uses a 7 GHz channel in the 60 are replaced by the GPS function in your
GHz Extremely High Frequency radio mobile device. The timing will be faster
band) is also trying to become a stand- than the demise of the dealer-installed
ard. Several major manufacturers are cell phone.
promoting the technology so, it is worth
keeping an eye on.

Bluetooth may seem like old hat, but
people are actually starting to use it now.
Bluetooth-Enabled Device Shipments
Expected to Exceed 2 Billion in 2013.24

kets: Bluetooth 2011: Rapid Growth for Established Interface.
24
Wood, Laura. "Research and Markets: Bluetooth 2011: N.p., n.d. Web.
Rapid Growth for Established Interface." Research and Mar-



Conclusion

The story of humankind is segmented by In practice: There will be more connect-
our tools -- from the Stone Age to the ed devices tomorrow than there are to-
Bronze Age to the Iron Age to the In- day. Networks will be more powerful
dustrial Age through the Space Age and tomorrow than they are today.
into the Information Age, we have al-
ways described and defined ourselves by More people will have access to content
our technology. and to each other tomorrow than they
have today.
The trends outlined here should be
viewed through a single filter, Technol- Every industry expert can tell you "what"
ogy is meaningless unless it changes the is eventually going to happen, the hard
way be behave. part is telling you "when."

If you understand a how a technological If you apply Moore's Law, Metcalfe's
trend will change how we do life, then Law and the Law of Accelerating Re-
the technology matters. If it doesn't turns to what we've covered here, you
seem life changing to you, make sure you should be able to gain some insight
truly understand how it will be used be- about "when" this technology will truly
fore you dismiss it. change the world.

ShellyPalmer is an industry-leading advisory and business development firm that of-
fers deep-knowledge subject matter expertise and strategic counsel to brands, media, ad-
vertising, entertainment and technology companies with a special emphasis on digital
media, social media and empowered consumers. Our mission is to help you succeed in a
connected world. For more information, please visit shellypalmer.com


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