Insights from the 2018 US Consumer Electronics Show

In January of this year, Franklin Equity Group’s Jonathan Curtis and Robert Stevenson headed to Las Vegas for the Consumer Electronics Show (CES), the biggest technology trade show in the United States. Here, they report back on some of the event’s highlights, including the battle of “smart speaker” platforms, the road ahead for autonomous cars, artificial intelligence and other tech trends.

At past Consumer Electronic Shows (CES), we saw a range of products on display, from life-like robots to floating hoverboards. However, we don’t attend CES just to see all the shiny new tech gadgets, toys and tools—many of which may never even make it into the hands of customers.

We go to CES to see how leading public and private technology companies are positioning themselves for what is next, and what products are likely to break into the mainstream. At this year’s CES, we saw three key themes: smart speakers, autonomous driving and artificial intelligence (AI).

The Battle of the Smart Speaker Platforms

Google invested heavily in CES this year to highlight its emerging Google Home smart speaker and home-assistant platform. The search giant is spending aggressively in this new category, which we believe is to ensure that it maintains its dominant search position against Amazon’s Echo, Microsoft’s Cortana and even Apple’s Siri as search expands beyond the PC and mobile phone and into the home and beyond.

Amazon’s Echo launched a few years before Google Home and is becoming the predominant way for customers to buy products via voice on Amazon, thus bypassing Google’s search engine. Since search accounts for a majority of Google’s revenue, if there’s an emerging way to do high-value commerce searches, it has to be part of that space.

That said, while Google is later than Amazon to the home speaker market, we believe it has some advantages. First, a majority of the world’s global smartphones run on Google’s Android platform. As such, Google has a broad set of voice samples from which its AI technology is able to learn. Second, Google has been handling complicated search queries throughout its history. Given these factors and its willingness to invest, we believe Google is likely to maintain its dominant position in search as home speakers become a new search interface.