Quick Thoughts: CES Day Two – Look, I’m Walkin’ Here

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  • Intel has 2 Medfield customers – yawn
  • Auto makers promise consumer electronics that are not obsolete when you drive them off the lot
  • FCC Chairman Genachowski is frustrated with Congress, but expects more spectrum soon

 

The only suspense at Intel CEO Paul Otellini’s Tuesday night keynote was which Smartphone manufacturer executives would appear on stage to pledge support for Intel’s Medfield mobile solution.  The answer was Lenovo’s Liu Jun, who was pulling double duty after appearing at Qualcomm CEO Paul Jacobs’ keynote earlier in the day, and Motorola Mobility’s CEO Sanjay Jha.  Lenovo will produce the first Medfield smartphone, already dubbed the K800, for delivery in China for the second half of 2012.  (N.B. Lenovo also pledged to deliver the first smart television based on Qualcomm’s Snapdragon processor in China on the same timetable.)  Motorola’s commitment is less concrete, but involves “multiple devices, over multiple years” according to Jha.

We have been skeptical of Intel’s likely long term success in mobile, and the fact that it has been able to sign on two manufacturers to kick the tires on its newest, greatest hope does not allay that skepticism.  First, Motorola and Lenovo collectively account for less than 6% global smartphone share, and will only promise to use Intel for a small piece of their product lines.  Second, the products are far from delivery, and any slip in schedule could be fatal in the fast paced smartphone market.  Finally, only time will tell if these products are able to demonstrate real competitive advantage.  If not, it will likely be very difficult for Intel to sign on the additional partners it would need to make a realistic go of it as a mobile silicon supplier.  For more, we suggest a look at our recent piece on mobile processors.

The automotive area at CES is typically long on flash and enthusiasm, and short on real innovation.  A quick look at Ford’s booth revealed a concept car with gull wing doors splayed open, in the auto-speak shorthand for “car of the future” that has held steady since the 1954 Mercedes 300SL and the 1985 DeLorean in “Back to the Future”.  The long design cycle for automobiles, combined with the 7 year average life span, leaves us with many 2012 models touting GPS navigation and satellite radio as selling points.  At this year’s CES, auto makers were given considerable airtime to own up to the structural problems that have stifled innovation in automotive consumer electronics and explain how they will get it right in the future.  The moderator in a panel discussion summed it up as “Cars that don’t crash, Devices that don’t distract, and Powertrains that don’t pollute.”

The work on the “not crashing” and “not polluting” is impressive, and certainly offers future opportunity for electronic component makers to continue making inroads into the bill of materials of the average car.  However, the industry could use some help on the “don’t distract” part that it doesn’t seem to be nurturing.  Car companies want to control the cockpit – what applications can be accessed and how they are accessed.  Operating systems are closed, applications are pre-selected, and outsiders are expected to comply with narrow company (and sometimes, model) specific APIs to access the apparatus in the car.  This is strikingly in contrast with the desires of actual customers, which want nothing more than to use the apps on their smartphones while in the car.  Give me a good voice interface – although even that would likely be unnecessary if I were a SIRI-using iPhone owner – and access to a touch screen on the dash that ties to my smartphone and I’m ready to go.  You can even turn off the touchscreen functionality while the car is in motion if you think that is necessary.  I don’t need a clumsily designed GUI and a limited menu of company approved apps.  Off of my soapbox for now, but I suspect that 3rd party aftermarket solutions will arise if car companies can’t get with the program.

Finally, FCC Chairman Julius Genachowski returned with a plea for more spectrum.  Despite general bipartisan support and the potential of $25B that could be raised, Congress continues to hold up legislation that would authorize the FCC to conduct incentive auctions of TV broadcast spectrum.  The points of contention are proposals that would, in one case, restrict the FCC from placing any restrictions on the bidding process, and in the other, would restrict it from designating any spectrum for unlicensed use.  Not trying to be political, I see Genachowski’s objections to these restrictions as quite reasonable.  It would seem in the best interest of consumers, whom the FCC sees as its most important constituents, to support a broadening of competition, rather than a narrowing.  The US wireless market is already dangerously close to a duopoly for users with a need for speed and coverage, and the possibility of spectrum hoarding could push it over the edge.  As for unlicensed spectrum, an awful lot of unpredictable goodness has come of previous assignments of unlicensed spectrum, such as WiFi, cordless phones, Bluetooth, baby monitors, and other basics of life.  It does seem a bit silly to put an official lid on that.  Despite the frustration with politics as usual, Genachowski seemed to have an underlying optimism that the authorization for incentive auctions would get done.  This would be good news for all things wireless.

For more see our piece on 4G wireless.

For our full research notes, please visit our published research site.

 

 

 

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