CES' hardware focus out of step

The annual Consumer Electronic Show (CES) in Las Vegas has dominated the technology news at the beginning of the year, as usual. Despite the attention it receives, the show’s continuing focus on hardware is making it look increasingly dated, as the majority of innovation is now happening in software and services rather than in hardware design. However, one area of hardware where innovation is occurring is the smart or app-enabled accessory market. This is a market that has the potential to take off in a similar fashion to the mobile app market and become a significant part of the smart devices ecosystem.

 

CES is traditionally focused on new hardware products, which is understandable as this is where the majority of innovation has occurred in the past. However, the rise of smart devices has caused a fundamental shift in the consumer technology industry, meaning that this is no longer the case.

 

The focus of innovation has now shifted to the software and services running on these devices, rather than the physical hardware. Smartphone hardware is now generally ”good enough” for the majority of users and as a result it has become commoditized and homogenized. The market has settled on large, slab-shaped, touchscreen devices as the optimum design for smart devices, meaning there is very little ability left for device vendors to differentiate on hardware. This was point was illustrated neatly at CES, where the main “innovation” was the launch of larger-screened smartphones or “phablets” as they are often called.

 

Conversely, the market for software and services continues to grow at a phenomenal rate. Apple recently announced that 40 billion applications have now been downloaded from its App Store, illustrating users’ insatiable hunger for new applications and services. For those looking to keep track of the latest innovations in the consumer technology market, the software-focused events such as Google I/O, Apple WWDC, Microsoft Build, and Facebook f8 are now a better place to look than CES.

 

 

 

What differentiates a regular accessory from this latest wave of smart or app-enabled accessories is that their functionality generally goes beyond the simple audio features (as found on Bluetooth headsets, for example) to provide richer functionality and interaction between the smartphone and the accessory through applications running on the smartphone.

 

On a basic level, this includes the ability for both the accessory and the smartphone to receive and display notifications. However, more advanced smart accessories can both control and be controlled by a smartphone. There has been particular interest in smart watches at CES, with the Kickstarter-funded Pebble the poster child of this market, but there are a range of other app-enabled accessories either available now or on the horizon, such as thermostats, fitness trackers, and concepts such as Google’s Project Glass personal heads-up display.

 

This development could be viewed as the natural evolution of mobile apps; having exhausted the functionality of the smartphone itself, they are moving to other devices. This trend has also been driven by the reducing cost and power requirements of adding connectivity and intelligence to accessories, in addition to the availability of the low-power Bluetooth 4.0 standard. While there will be opportunities for the current smart vendors to capitalize on this market, as with the mobile apps market it will be the third-party vendors that will be the driving force.

 

One of the current hurdles in this market is the lack of standardization. While there are plenty of technologies available to connect the devices to each other, such as Wi-Fi, Bluetooth, NFC, and ANT+, there is no standardized way to connect the services running on the devices. This means that, as with the mobile apps market, such functionality is difficult to implement and generally siloed by software platform. While users may be happy to buy a $0.99 app, they may be more hesitant in buying a more expensive accessory without assurances that it will work on more than one OS.

 

Qualcomm’s AllJoyn (not to be confused with the GSMA’s Joyn initiative) is one project that aims to address this shortcoming, by providing a standard API for discovering and connecting to devices and services over local and personal area networks. Given Qualcomm’s leading position in the smartphone chipset market and involvement in mobile software development, it is in an ideal position to drive the adoption of such a standard.