Tracking New Consumer Technology Trends for 2019 CTA Market Research VP Steve Koenig previews 2019 CES at the 23rd annual event.Katie Makal ⋅ Dec 11, 2018 WASHINGTON—We are on the cusp of a new age of consumer technology, said Steve Koenig, vice president of market research at the Consumer Technology Association (CTA) during his “2019 Tech Trends” keynote at the 2018 Government Video Expo in late November. At some point over the course of the last decade, which he describes as the “connected age,” we began to take the internet for granted, expecting our consumer devices to be online. “We’re streaming audio, video—most of our waking hours are spent online either passively or actively.” Not only have we been using these devices to stay connected, they have been using us, collecting data on what we watch, where we go and what we like to buy. AI So what’s on the horizon? “Get ready for the data age of consumer tech,” Koenig said. “More and more business decisions, more and more consumer choices are guided and informed by data. Just think about your Netflix queue. Those recommendations about what you might like, that isn’t just magic. That’s all built off of data. So we look across the whole tech ecosystem, I think data is the common denominator. Whether it’s Netflix or a self-driving vehicle, data is behind much of what we do, and that’s only going to grow and multiply exponentially as we get into the next decade.” This era will be driven by advances in AI and machine learning, which Koenig anticipates will be a strong theme at the upcoming International Consumer Electronics Show, which the CTA produces every January in Las Vegas. Drawing an anticipated 180,000 trade professionals from 150 countries this year, according to Koenig, CES is probably the world’s largest consumer technology event. About AI, Koenig continued, “Companies have massive amounts of customer data … that they want to make sense of that would take us humans years and years” to sort. And AI will potentially be able to do it in real time, translating this data into instant, actionable information. Stressing the importance of AI as a technology enabling the future, Koenig mentioned a study released by the McKinsey Global Institute in September. “Just to kind of underscore the significance of AI, they likened the global economic impact of AI in terms of GDP growth globally to the invention of the steam engine or the steam locomotive 150 years ago… They go on to say that through 2030, AI will add 1.2 percent to global GDP growth. It’s such a small percentage, but what’s behind that is quite literally trillions of U.S. dollars. Trillions. That’s how significant AI is. You don’t have to look too deep to uncover other statistics about the vast majority of commercial operations that are either using AI now or making plans to.” 5G With the speed of technological progress, it’s not surprising that Koenig noted another change we’ll be navigating over the next few years, and another enabling technology. “We’re bridging into the data age, and 5G, which is the next generation of wireless connectivity, is essentially going to become the central nervous system of the data age.” The hallmarks of 5G—faster speed, greater capacity and lower latency—are all critical elements to enable emerging technologies such as self-driving vehicles, smart cities, 8K video and others. In its publication “5 Technology Trends to Watch in 2019,” the CTA noted that the U.S. “is beginning a transformation that will create lucrative business opportunities for many. 5G is coming and its rich bandwidth will reduce latency, allow a fast data stream and incentivize new services that cross the borders of all tech sectors. Combined with low-cost sensors, deep data analytics and AI, 5G will be the backbone for much of the smart city infrastructure that will help drive resilience for unforeseen disasters … 5G will also fuel the connected home, transform digital healthcare and create immersive experiences for global sports fans. Of course, AI will be at the core of each of these areas, supporting them with data to make informed actions.” Describing the many potential opportunities it may unlock, Koenig explained that 5G, deployed as fixed wireless broadband, has the capacity to bridge the digital divide in the United States and other large countries with geographically dispersed citizens. Noting that it is too expensive to lay fiber to support access to broadband internet for all the residents of the Appalachian Mountains, for example, “fixed wireless 5G brings those super-fast speeds of broadband to places that heretofore have not been able to get a robust internet connection.” [Read: 5G—The Future Is Now] He added that 4G and 5G are going to coexist for a time while networks are built out to support 5G deployments and 5G smartphones are put in the hands of consumers. Koenig predicts that by 2022 or 2023, the majority of handsets shipping in the U.S. will be pure 5G. 8K Koenig positions the 2019 International CES as “the coming-out party for 8K TV,” based on monthly shipment data CES tracks in the U.S. market: “In the October year-to-date data for TV shipments, we have breached the 1 million mark [for the first time] in terms of unit volume shipped for TV sets 70 inches and above,” the target screen size for 8K resolution. He admits that there’s little native 8K content now and no 8K transmission in the United States, but we were in a similar position when HDTVs first began to appear around the turn of the century. As for how many 8K televisions are going to sell in the coming year, Koenig said, “Right now my current thinking is 100,000 or less. It’s going to be pretty small simply because it’s a brand new technology.” He added, “It starts small but then we hit an inflection point. Now, when that big inflection point comes, I don’t think 8K is going to be a big majority seller simply because it’s domain is very, very large screens.” The trend in the United States is toward increasingly large screens, so 8K sets may increase in prominence over time. “Ten years ago, under 40 inches was the lion’s share of TV shipments, and that has slowly modulated to where now shipments of TVs above 40 inches are the lion’s share. The size category that’s just crushing it right now is 65 inch. Three years ago it was 55 inch. You can start to see a trend here.” Smart Speakers and Digital Assistants This holiday season, tech spending is expected to reach a record $96.1 billion in the U.S. alone, according to CTA research, a year-over-year increase of 3.4 percent. Whether it’s emerging tech like smart speakers and smart home devices, or the popular categories like TVs and laptops, tech is an integral part of our lives. CTA projects that smart speakers such as Amazon’s Echo and Google Home will sell 22 million units this holiday season, up 44 percent over 2017. Discussing consumer purchasing trends, Koenig said, “About every five or six years there tends to be a must-have consumer tech product. It has the signature of hyper-growth and hyper-volume of sales, so almost overnight, millions of households adopt it. Today that’s the smart speaker.” Five or six years ago, the must-have consumer tech item was the tablet; before that it was the smartphone, and back in 2002 it was the DVD player. Smart speakers provide an entrée into the home for AI via the speakers’ digital assistant. Microsoft’s Cortana, Apple’s Siri, Amazon’s Alexa and Google Assistant are some very capable helpers, and they are changing the way consumers interact with and even purchase new technology. “CES 2018 taught us three things related to digital assistants,” Koenig said. “The first is that these digital assistants are going into more vessels—this is everything from phones to PCs to cars.” The second point: “Support for these assistants has now become table stakes, just like connectivity was mandatory several years ago.” If you brought forward a non-connected device in 2010, people didn’t have much interest in it; it’s the same now with devices that don’t interconnect with a digital assistant ecosystem. This has become critically important in smart home products, where digital assistants have become the killer app, according to Koenig, which leads to the third point: these digital assistants are quickly establishing voice as the go-to user interface. “Voice is really coming into the user experience,” he said. “I predict that within five years, things that we normally do on a website or through an app, that all gets pushed to the digital assistant that is omnipresent in our experience. They’re in our car, they’re on our phone, they’re on our laptop, they’re in the kitchen on the smart speaker, they’re integrated into the fridge—they’re everywhere. Therefore, they’re always standing by to help. So voice and digital assistants become the new search.” Koenig isn’t simply speculating on this. The CTA conducted research over the summer that revealed several things about how American adults are using these digital assistants. Koenig noted, “The list is very long of the things that consumers are doing with these digital assistants—it’s not just a few things like checking the weather or setting an alarm. Point two: the things that they are doing are what we would normally fire up an app for or go to a website.” At least part of the time, consumers are starting to pivot to a digital assistant to make purchases or schedule their work and free time. He added, “I’m belaboring the point, but what I’m trying to say is that we are on the cusp of a major shift in consumer behavior and it’s made possible by these digital assistants, and it will transform our interactions.” Koenig will be at CES next month to track the accuracy of these forecasts. The 2019 International CES takes place Jan. 8-11 in Las Vegas.