Some may have been disappointed by the absence of revolutionary products and technologies at this year's CES, but we believe that the current focus on incremental change to enhance the consumer experience will result in major disruption, leading to an exciting year ahead.
The smartphone market is set for a shake-up
Following Nokia’s jump from a ‘burning platform’1 into Microsoft’s arms just under a year ago, the new partners have started aggressively pushing Nokia’s new Lumia range of smartphones, featuring Microsoft’s latest Windows Phone 7.5 (Mango) operating system. The forthcoming 4G-enabled Nokia Lumia 900, which was unveiled at CES, may well turn out to be their first very promising offspring. The sales figures for this device will be monitored closely to assess reactions to the new Windows Phone operating system, which represents a halfway house between those offered by the current market leaders: Apple’s tightly-controlled iOS ecosystem and Google’s diverse, and occasionally chaotic, Android. In many respects, we believe that 2012 will be the ‘make or break’ year for Microsoft in the smartphone market.
But the question that will most probably be answered first this year is the future of RIM. Hampered by a desperately empty application store and less-than-exciting novelties, RIM’s BlackBerry devices have been steadily losing market share in the increasingly competitive smartphone market (at least in many developed countries, as RIM is still enjoying a certain degree of growth in several developing regions). Following a 77% decline in the company’s share price during 2011, its two co-CEOs resigned in January 2012. Investors are now pushing RIM to look for close strategic partnerships or be sold, to reverse its declining trajectory.
Intel is betting that next-generation laptops, or Ultrabooks, will bridge the gap between laptops and tablets
Many had their doubts when Apple created a new category of devices by launching the iPad in April 2010, but the tablet market has since proved its potential. Intel’s Ultrabooks are now filling one of the last remaining segments, and are designed to bridge the gap between a laptop and a tablet, possibly replacing both, by combining the power and productivity of a laptop with the portability and spontaneity of a tablet. In the short term, take-up will be constrained by the high prices of the devices, which are pretty much on a par with Apple’s MacBook Air (at about USD1000), itself basically an Ultrabook in all but name. But prices will come down within the next couple of years, which will further drive mass-market penetration, and Intel might soon reap the benefits of its heavy investments. There is therefore potential for considerable change in both the tablet and laptop markets during 2012, as increasing sales of Ultrabooks could start slowing the rise of the tablet.
The advent of Internet-delivered video content will enable a multitude of players to fight for control of the ‘entertainment screen’ in the living room
At the show, manufacturers displayed new screens of amazing quality. LG and Samsung, in particular, impressed most visitors with their large (55-inch, 140cm) yet light, ultra-thin OLED screens, while others like Sharp displayed astonishing ultra-high-definition (UHD) TVs. Although virtually all the TV manufacturers have embraced 3D, the mainstream migration to this new format has not yet truly begun among consumers.
More interestingly, the battles over the connected TV ecosystem are hotting up, such as the one between Google TV and the rapidly progressing Microsoft Xbox 360 TV experience. As a result, traditional pay-TV operators will now be obliged to build on their existing strengths and innovate in order to maintain ‘clear blue water’ between their traditional pay-TV offering and the growing ‘grey area’ that combines broadcast free-to-air (FTA) linear content with an increasing range of free and paid-for Internet-delivered content.
1 Nokia CEO Stephen Elop’s ‘Burning Platform’ Memo, The Wall Street Journal Tech blog http://blogs.wsj.com/tech-europe/2011/02/09/full-text-nokia-ceo-stephen-elops-burning-platform-memo/.