Sunday, January 10, 2016

Consumer Technology in Focus As Global Markets Falter

  • Last week, many global markets performed poorly, and the S&P 500 stock market index declined about 6% for the week - the worst start for a new year on record.  Factors contributing to the performance were problems in China (an unstable currency, a slowing economy and a volatile stock market), declining energy prices, weakening manufacturing trends, tensions between Iran and Saudi Arabia, and nuclear testing by North Korea. Potentially positive news came on Friday, when the U.S. reported better than expected job growth.
  • Separately, over 165,000 people attended the Consumer Electronics Show (CES) in Las Vegas to see the products and hear the visions from over 3,600 companies. Technologies were represented in the areas of 3D printingaudioautomotivefitness/sportssensorssmart homeroboticsvideovirtual realitywearables and wireless communication.
  • Notable announcements included 1) a keynote presentation by Brian Krzanich, Intel CEO focusing on their opportunity in many markets - but never mentioning PCs or smartphones, 2) Fitbit’s entrance into the smart watch market - which drove its stock down 18%, 3) EHang’s autonomous drone that can carry a payload of 286 pounds including a single passenger, 4) Lego's WeDo 2.0 – an education kit for learning to build robots and 5) Richard Yu, CEO of Huawei’s consumer business group saying, “Every month, every year we are increasing our market share [in smartphones] … maybe within two years, we have a chance to be number two.”
  • Regarding market volatility –  my most recent weekly note (Dec. 20) highlighted several of these market concerns, along with the potential for increased market volatility in the short to medium term.  
  • Regarding U.S. job growth – wage growth remains weak, and most of the job gains came from part-time hiring.
  • Regarding CES – 1) Intel seems well positioned for the post-PC era, 2) Fitbit should maintain its focus as a leader in fitness tracking (both hardware and software), rather than the the crowded smartwatch market, 3) EHang provided another view of Jetsons' futuristics lifestyle (see video here), 4) Lego will likely benefit from the need to develop robotic and engineering skills and 5) Huawei will likely continue to increase its smartphone and tablet market presence globally.  

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