Cantor Fitzgerald analyst Brian J. White highlights the key takeaways from 2014 international Consumer Electronics Show (CES).
Last week, we attended 2014 International CES in Las Vegas and we are highlighting some key takeaways.
CES: Wearable technology a legitimate product category
In our view, the unveiling of useful wearable technology products that focused on the wrist (i.e., fitness bands, smartwatches) at this year’s show brought legitimacy to the wearable space. That said, we believe it will take Apple Inc. (NASDAQ:AAPL)’s launch of the anticipated “iWatch” to drive a more meaningful adoption rate.
CES: China-based OEMs expanding into U.S.
In our view, the leading China-based OEMs (e.g., LCD TVs, mobile devices) will be more focused on expanding their presence in the U.S. market during 2014. We believe China-based vendors will more aggressively invest in brand-building this year, negatively impacting marginal players in the LCD TV and mobile device markets.
CES: Mega-sized smartphone ramp up
Over the past 18 months, the smartphone industry has undergone a meaningful shift to mega-sized displays and this phenomenon continued last week. The bulk of the new smartphones that we observed last week were over five inches in size and Hisense showed off a 6.8-inch smartphone that is scheduled to launch this year in the U.S. market. As we indicated last week, our research checks at the event suggest that Apple could unveil two larger iPhone (iPhone 6) screen sizes this year, a 4.7-inch and a 5.5-inch. Given Apple Inc. (NASDAQ:AAPL)’s pattern of keeping at least one older iPhone model alive, this would equate to a total of three iPhone screen sizes.
CES: New TV Innovations Should Drive Upgrade Cycle
After checking out the new innovations at leading TV vendors such as Samsung Electronics, LG Electronics, Sony and a host of other TV vendors, we believe the trends around mega-sized, smart, 4K, curved, flexible, and bendable TVs will drive an upgrade in 2015-2016. We expect this cycle to benefit our LCD coverage universe that consists of AU Optronics, Corning and LG Display. That said, we believe the price points around these new innovations need to fall further and 4K content needs to ramp (we believe 2015-2016).
CES: The “Internet of Everything”
Given the early-stage ramp of wearable technology, the shift toward connected homes and new innovations around connected cars, we believe Cisco Systems, Inc. (NASDAQ:CSCO)’s vision of the “Internet of Everything” was supported by the trends last week. At the same time, we believe the plethora of data created by these connected devices provides strong underpinnings for Big Data, a key secular theme that both Splunk and Tableau are focused on capitalizing on in the coming years.
CES: 3D printing highly attractive
We felt the enthusiasm around 3D printing at last week’s show and were impressed by the technology; however, we believe this market must be viewed with a long-term time horizon. During our discussions with 3D printing companies, we were told that today’s use cases surround prototype activity and home hobbyists. In our coverage universe, Hewlett-Packard Company (NYSE:HPQ) discussed plans to play in the 3D printing market during its last earnings call in November, and our meeting with the company last week supports this notion.
