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Posted by James McQuivey on January 14, 2013
I know what you're thinking: CES is so last week already. But the lessons of CES will follow -- some would say haunt -- us all year long, so it's worth a sober summary of last week's events. To make this quick, I'll summarize this year's trade show in four sentences. I will then defeat the purpose of a four-sentence summary by explaining each sentence, but you are free to withdraw at any moment.
1) The Internet of Things is really an Internet of Sensors. It was Kevin Ashton of RFID fame who first popularized the phrase Internet of Things. But the way he and others explored the idea made it clear that the key element of this Internet of Things was that things were going to be individually addressable on the network. This was the core idea behind RFID, and in supply-chain management, it makes a lot of sense. But in the consumer world, we don't need an Internet of Things. We need an Internet of Sensors. With enough of the right sensors in my life, the sensors can flexibly identify the things in my environment and provide a very efficient means of addressing them. What we saw at CES 2013 was the gradual emergence of the Internet of Sensors. Consider the Flower Power sensor from Parrot (one of the most innovative companies on the floor at CES, imho). This sensor plugs into the soil in your garden and tracks sunlight, moisture, temperature, and fertilizer. It sends this info over bluetooth to a phone app which then maps the health of the plants you have told the app are adjacent to the sensor. Thus, the sensor becomes the means whereby the things are connected to the network. Do not underestimate the power of this shift away from Net-connected things to Net-connected sensors. Your mobile phone is most powerful, not when it is used as a trackable thing or addressable node on a network, but when it is used as a collection of remote sensors, as my colleague Julie Ask has written so well. Beyond the mobile, you will soon have microphones, cameras, and even air quality sensors in your bathroom, your car, and even following you via aerial drones (Parrot again). These sensors will communicate with each other to create a meta-sensor experience that will trump any particular device's claim to the future, distributing the benefits of the future across whatever range of interfaces you employ.
2) Your body is a wonderland. No, I am not flirting with you. I'm merely pointing out that for consumer tech makers and experience creators, your body is about to become a playground of sorts. That's because, even though CES 2013 was mostly a showroom for things we already knew were happening -- like 4K TV (Ultra HD, more on that later), driver-assisting cars, and 3D printers -- the one place where the show really broke out this year was in health and wellness monitoring. Fitbit and Withings, the real founders of the consumer-facing category of body monitoring, were joined this year by dozens of manufacturers, each of them offering their version of a fitness watch, a pedometer, a scale, a blood-pressure cuff, or even a fork. Technically, the now famous HAPIfork counts as evidence that the Internet of Sensors is arriving, where the fork is used as a sensor to measure the things we really care about, namely the calories and nutrients we consume, but that in turn is only useful to the extent that it tells us about our bodies. Which is what the HAPIfork is all about, especially when paired with the whole suite of devices the company had on offer, including a body tracker, a sleep monitoring wristwatch, and a HAPIbutton (which I can't really explain to you without feeling like this is the dawning of the Age of Aquarius, so I'll refrain). This is a company that understands that sensors, when coupled with our bodies, can become a completely new type of experience for individual consumers. Other manufacturers see the body as territory for your insurance company, your doctor, or even your employer to claim, so they were there, too, offering devices and apps designed to help track our aging population on behalf of institutions. Mark my words, this split -- between using body-monitoring technology on behalf of institutions vs. in service of individuals -- will become one of the most significant and divisive splits in the next decade as governments attempt to regulate anything that touches the body; institutions attempt to control access and services; and individuals respond with, "get your hands off both my body and the body of data I'm collecting." There is a huge market here and a massive fight coming; don't miss it.
3) Device makers should invest in better experiences, not better products. Yes, clients do pay me to help them develop new products, but even before CES, I had begun telling people that it wasn't really the new product that mattered. It was the total product experience that really mattered. This is so important to the future of product development -- especially in an era of digital disruption where digital tools and experiences can extend the value of even the most analog of products, including toothbrushes and cosmetics -- that I included a whole chapter about this in my upcoming book, Digital Disruption (out in hardback on February 26th). The point is painfully simple: Digital experiences can amplify the value of a product, extending its boundaries far beyond its prior limits, engaging consumers more deeply, at more times, and in more places than before. This idea is catching on. It's why GM announced it will hire 10,000 software developers, it's why Monsanto is building apps for farmers, it's why 2013 will be the year that all big companies jump on a self-promotional digital disruption binge. But some of the big companies that should have learned this lesson by now were the same companies who (mis)spent CES 2013 promoting bigger, better products rather than bigger, better experiences. Consider the entire TV category, which used CES in 2010 to promote 3D TV to little avail and has repeated the same mistake in 2013 with Ultra HD TV. I already posted on this in detail at CES and I have previously described Sony's longstanding challenge in this vein, but I repeat it here as a lesson to learn from CES to make sure that the entire industry understands that the next big thing is not a thing at all; it's an experience.
4) CES is dead -- long live CES. That's right folks, I'm declaring the demise of the largest convention in the US, the one to which more than 150,000 people flocked for now two years running. The old days of CES, wherein exhibitors reveal their big plans for the coming year and buyers haggle over prices and place bulk orders behind the scenes, have been effectively neutralized by the Internet. Exhibitors show their products online before CES, and many of them even announce pricing before the show, effectively eliminating one of the key roles of CES in the old days, that of bringing buyers and sellers together to find a market price for a new product. Instead, CES now has a new function: It is the place that executives from every industry come to kickstart the calendar year, to ensure that they don't miss whatever trends will shape the year ahead (articulated well in a post by colleague Sarah Rotman Epps ahead of CES). In the past two years, I have had more and more of my non-tech clients -- including banks, credit card companies, media companies, and consumer product manufacturers -- show up at CES for the first time. They're not buying, they're not selling. They're observing. They're making sure they can bring down from the mountain of CES whatever tablets and commandments seem to have been handed down from on high. So even as the old function of CES is withering before us, the new function of CES is bigger and better than before. And the CEA would be very smart to continue expanding in this vein; I recommend a celebrity banquet with a red-carpet arrival scene in 2014. If played right, the CEA might get more people to pay attention to this than the Oscars.