CES 2023 – Dark horses of Vegas

China.

• China stands out in that although being mostly absent from the show this year, China is the most likely to surprise this year.
• This is because almost everyone in the industry (and at CES) appears to be universally negative on China which combined with geopolitical tensions has meant that development efforts in this direction have ground to a halt.
• Tensions are so high that I have seen several obviously Chinese companies pretending to be American through the establishment of a USA subsidiary.
• However, I think that China may substantially surprise on the upside.
• The CCP has been gravely wounded by its Covid Zero policy and badly needs a win to keep the populace happy.
• This win needs to come in the form of an economic turnaround and I think the CCP will pull out all the stops to obtain it.
• Furthermore, I think that the PBOC has the tools to deliver as there is space to cut interest rates as they remain at 4% and inflation is still low.
• I expect this to begin in Q2 2023 once China begins to reach herd immunity and Covid fades into the background as it has everywhere else.
• This bodes well for the Chinese technology sector which should see demand rebound which hopefully will be followed by a rerating of its earnings.

Metaverse.

• The Metaverse was present in more volume than expected and in addition to a large range of haptics-related products which enhance the virtual world experience, three things stood out.
  • Ant Reality: which is a relatively new company working on the optical system for augmented reality glasses.
  • Most impressive is its 85° field of view, resolution and brightness even without the background being darkened.
  • The company also offers a VR/AR transition solution which boasts a 120° field of view but the optics are not yet in the same class as the 85°.
  • This marks a step towards solving some of the pressing issues that keep AR as a pipe dream for the mass market and I think that Ant Reality is one to keep an eye on.
  • XanderGlasses: which is a software company that offers a closed captioning system on the Vuzix AR glasses.
  • This is being aimed at the hearing-impaired population and I happened to come onto the stand at the same time as a hearing-impaired woman was trying the glasses for the first time.
  • The device is standalone with the voice-to-text being carried out on the Vuzix device itself with no connectivity required.
  • This is why the company is using Vuzix and why the device will cost $2,000+ when it ships.
  • This lady compared the experience to the first time that she used a hearing aid, and her reaction was emotional.
  • Unlike Google’s (unseen) product, this device is available to test and will ship commercially in Q2 2023.
  • The experience is far from perfect but the fact this small 4-person company has a product that works and knows how to iron out the kinks is impressive.
  • This is a great example of the sort of use cases that will provide the genesis of the Metaverse, which from a consumer and mass market perspective has many years to go before it has a chance of taking off.
  • Gauzy which is a German company that provides smart glass products aimed at automobiles and aeroplanes.
  • Gauzy comes to note because it is the company that has developed the heads-up display (HUD) in BMW’s concept iVision Dee vehicle.
  • This display spans the entire width of the windscreen obviating the need for an instrument cluster but is only a few inches high.
  • Historically, this has been very difficult to do which is one reason why HUDs today are tiny.
  • BMW’s is being achieved with projectors embedded in the dashboard which reflect off a material embedded in the windscreen.
  • This material impedes visibility when not on which is why it is only a few inches high at the bottom of the windscreen.
  • This limits its usability but on this topic, the HUD from Harman which is 15” x 4” in size also was of note.
  • HUDs are problematic because larger displays tend to have huge projection boxes but Harman has made progress on this front and has a pretty small box compared to the screen size it is offering.
  • I think that HUDs in vehicles offer an easier and safer navigation experience and there are plenty of other use cases that merit bigger and better transparent displays in the windscreen.
  • This projection of the virtual world onto the real world in the vehicle is another early use case for the Metaverse.

Automotive.

• Harman ReadyUpgrade wins RFM’s best-in-show prize for 2023 and takes us back to the old days of cassette radio players in the vehicle.
• This product is a hardware module that runs the instrument cluster and the digital cockpit but crucially, it can be upgraded during the life of the vehicle after it has been sold.
• 5½ years ago, RFM identified hardware obsolescence as a real problem for OEMs when it comes to having digital experiences that can compete for head to head with smartphones which are upgraded by users every 2 years or so.
• This is because the design cycle of a smartphone is 1 year while a vehicle is 4 to 5 and may be present in the market for more than 10 years after it has been sold.
• Most suppliers have tried to get around this by over-specifying the hardware at the time of design but I don’t think that this has worked very well.
• Harman is offering the ability to remove the old unit and plug in a new one in the same way that radio cassette players were replaced during the 1980s.
• RFM research has long concluded that the automotive industry needs to move in this direction in order to compete in digital services and this is the first concrete move in this direction that I have seen.
• If this is the beginning of a trend, then there is more hope for the OEMs than my pessimism currently allows.