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CES 2016 is all about the IoT

CES 2016 is all about the IoT
by Bill Jewell on 01-15-2016 at 7:00 am

CES 2016 last week in Las Vegas was a huge success. Over 3800 exhibitors occupied over 2.47 million square feet. Attendance was over 170,000 including 50,000 from outside the U.S. CES (previously Consumer Electronics Show) was put on by the Consumer Technology Association (CTA, previously the Consumer Electronics Association). The name changes reflect the broadening of high technology consumer goods to include more than electronics – software, systems, advanced materials, etc.

We at Semiconductor Intelligence attended CES 2016. Our daily impressions are on our website at CES 2016 .

The Internet of Things (IoT) was very prominent at CES, overshadowing traditional consumer products such as PCs and smartphones. Intel – the dominant processor supplier for PCs – featured virtual reality, fitness trackers, smart watches, smart eyewear, gaming and drones. Qualcomm – the largest processor supplier for smartphones – pushed smart homes, smart buildings, robotics, automotive and other IoT devices.

The IoT market is currently a relatively small part of the overall consumer electronics market. However it represents a major source of growth. As shown in the table below, IoT represents only 3% of the total U.S. electronics market in 2016, according to CTA. Over half of the market consists of recent growth drivers such as LCD TVs, portable computing and smartphones. Despite strong growth of UHD TVs, the overall LCD TV market growth is flat with 2015. Portable computing includes laptop PCs, tablets, and 2-in-1 PCs. CTA expects strong 48% growth of 2-in-1 PCs in 2016, but this is offset by only 2% growth in laptops and a 12% decline in tablets resulting in only 1% growth in overall portable computing. Smartphones revenues are forecast to increase 4% in 2016, a significant slowing from double-digit growth in previous years.

Wearables (smart watches, fitness trackers, health trackers) and smart home devices (security, climate control, lighting, etc.) are projected at $6 billion in the U.S. in 2016. These categories are key drivers of growth in 2016, with wearables at 20% and smart home devices at 18%. The impact of IoT devices is even more pronounced at the global level. A GfK/CTA forecast has global wearable market growth of 47% in U.S. dollars and 58% in units in 2016. This compares to total global tech device sales in 2016 down 2% in U.S. dollars and flat in units.

The Internet of Things is becoming a major driver of the electronics and semiconductor industries. All major consumer electronics companies and numerous startups are focusing on IoT. The question is which devices and companies will be successful. In many ways the current IoT industry resembles the Internet boom in the late 1990s. The IoT market will probably experience a shakeout in a few years where the weaker companies and technologies will crash and burn. However IoT will become eventually become an important part of peoples’ lives, as the Internet is today.

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