From Smart Homes to Invisible Computing, Our Destiny is Digital, CES Asia 2017 Chief Economist Says
Benjamin Roberts
/SOURCE : Yicai
From Smart Homes to Invisible Computing, Our Destiny is Digital, CES Asia 2017 Chief Economist Says

(Yicai Global) June 9 -- This century has given birth to the digital native, those who have not known a world without the internet, the smartphone, the laptop or the computer. People in their early 40s only experienced the internet as mid to late teenagers, with the advent of the web in 1993.

How widespread tech has become integrated into our quotidian lives is a fascination of Dr. Shawn DuBravac, the Chief Economist and Senior Director of Research of the Consumer Technology Association who wrote of the profound changes technology has wrought in his book Digital Destiny: How the New Age of Data Will Transform the Way We Work, Live, and Communicate (Regenery, 2015).

In an interview with Yicai Global, DuBravac outlined the highlights of this year's Consumer Electronics Show Asia (CES Asia), held this year from June 7-9 in Shanghai's New Exhibition Center.

Q: Could you give us a gloss of the themes in his book where you write of how widespread technology has affected the economics, health, travel and culture of humanity.

A: The premise of Digital Destiny is that a bunch of forces that had been building, that had been percolating came together at right about now and they're all really poised to change the trajectory of what the future looks like. And up till about now, the focus was on digitizing devices, now we're shifting towards wide deployment of sensors, digitizing objects, digitizing physical environments, digitizing physical spaces and the implication is that ultimately the lines between what's physical and what's digital is blurring.

DuBravac, prior to his CES role taught as an adjunct professor at George Washington University's MBA Program, at the University of Mary Washington and George Mason's MBA program.

Q: Do you think societal barriers to technology will also break down? An example would be in the education sector where at Darden School of Business at the University of Virginia for example, blended learning, a mixture of online and offline is becoming the standard. Do you think wholly online courses will have the same reputation at some point in the future?

A: I think there will be lots of changes that take place, certainly that could be one of the changes – that the cachet between online and offline dissolves. There are really good programs that are both online and offline, and truthfully there will be probably both, there will be online and offline. When I taught, all the students had their laptops open anyway, so it could have been an online experience (laughs).

Q: Consumer electronic spending has leveled off in the US and Latin and South America – what do you see as growth sectors in emerging markets in terms of products?

A: What you see is the core products slowing down globally, smartphone growth is slowing as adoption has been accelerated, it's maturing, becomes more of a replacement market. That's true with traditional computing products, desktops, laptops, true with tablets.

Q: People are upgrading or replacing not buying into something new is the picture.

A: Yes, it's become more of a replacement cycle. most people who want them already have them, so you don't have a lot of new, first-time buyers of those categories. But, you do see a shift towards some of those more emerging categories, a large number of emerging categories.

If you look at the US, about 5 products represent about half of the industry volume, in terms of dollars and the rest of the entire industry makes up the other half.

So, you've got a lot of different growth areas. One would be digital assistants, things like Amazon's Alexa, Google Home, that hasn't materialized outside the US as much as inside. But I think that will change in the next 24 months, speech-recognition is getting better across the board, so you will start to see more and more dedicated devices. Virtual reality is another area that's obviously been percolating and will continue to grow. Drones is another area that's seen some growth and we're still determining what its use-case scenario might look like. Wearables, smart homes, all the Internet of Things (IOT) would fit into the area of potential growth in the coming years.

Q: You say that these have taken off more in the States rather than outside? How about in China?

A: Well, wearables is an area that's actually done pretty well in China, the market was up by about 50% last year.

Q: The growth is in fitness, elderly care A: Yes

Q: In China and India, technology has reached the stage where it is integrated into the daily lives of large amounts of the population – what new products can capitalize on the growing market for entertainment?

A: I mentioned voice-recognition and we've seen it in the US. I think that could easily pick up outside and in other markets like India, China, they have an entertainment aspect to them, typically it's an audio experience. You really start to see the gamification of a lot of different activities and services. I think the thing to remember is that they (China and India) are both very big markets with unique cultures and dynamics and so there is a lot of opportunity there, I think.

Q: Last year CES identified the appetite for innovation in the Chinese market – the year before 'proof of concept' was a theme – What is the overriding ethos of CES Asia 2017, or is there any particular tech sector that may come to define this year's expo?

A: So, I think there's a couple of areas – one I called invisible computing, which is computing moving beyond just traditional devices of smartphones and computers, which are showing up and being embedded into the technologies in new ways. What I would call algorithm, decision-making and algorithm driven experiences is an area of interesting growth. Things like self-driving vehicles. You've got a large number of auto manufacturers at CES, many of them first time exhibitors (BYD, Honda and Hyundai). So, you're seeing that space grow. Immersive technologies. Virtual reality and augmented reality are both areas that are still very new that could grow. Those have immersive, entertainment aspects to them, so that's something to watch.

Broadly, just the digitization of our daily lives, I think you see that showing up in a lot of places.

Q: IOT is an emerging growth sector – Last time, a viral hit was autonomous luggage.  This show will place more emphasis on smart homes. Can you give any predictions for the IOT market in China, or what innovations in the field are of note?

A: Many of the trends you see playing out in the United States are similar to the trends you see playing out in China. Fitting within IOT there are a number of categories. There's smart home – an area that's growing in China, wearables is an area that continues to grow in China, if you include smartwatches. So those are two areas there is growth around, in IOT, that have potential.

There's an entire enterprise space where you've using sensors and automation in business settings, I think that's an area that will grow. Some of the things you see here at CES Asia look at measuring air quality. They're thinking about personalization and customization and monitoring of your own environment.

I see here more air quality measurement here in China than I see in the United States. Just looking at the products here there's clearly consumer interest in China in those type of IOT products as well.

Q: Alexa, Cortana, Siri and Alexa recently competed in a 5,000-question quiz – Alexa answered only 20.7% and Siri 21.7% correct – do you see the technology of virtual assistants in its infancy now, or is it fairly advanced at this stage?

A: I would say both – the voice-recognition part has gotten very good AND SO we're not making errors in the engineering component of the experience. Now, the big hurdle before us is switching the product from an engineering product to a consumer product, to a consumer experience and that's a difficult exercise. I think every wrong question and every wrong answer is just more information that then helps and improves the experience because there is this feedback loop. So, I think what will actually happen is, we may see it decline before it takes off because as we get comfortable with it, then we start to demand more of it. Think about cellphone technology when we first got it – we got dropped calls all the time. We were totally okay with dropped calls and we just tolerated these things because it was new. Now, we demand much more of these products.

Some of the same things will happen with digital systems – we will demand a greater experience, we will demand answers to all these questions. Right now, we're okay with it not knowing every answer as it's still relatively new and we're still figuring out how we want to use these things. The use-case scenarios are still being developed.

Q: Do you have any plans to exhibit in other emerging economies or countries such as India, Vietnam, Philippines in the future?

A: We're always looking at market places – to do CES here in Shanghai, it's such an international city, a great location, so we encourage people from those markets to both CES Vegas and CES Asia. This year, we have attendees from 80 countries, we have exhibitors from 22 countries and startups from 10 countries, so we're really starting to get a pull from the world.   

Q: What devices or phones do you recommend personally?

A: I have an iPhone and I'm always trying out different devices. I was an early adopter with voice recognition and speech recognition and I'm always trying new ones out. Apple just launched one this week that I'm sure I will be buying. I'm just waiting for Amazon to ship my Amazon Show. I've got Alexa and Google Home throughout my house. Smart home is an area that I think is fascinating. There's lots of technologies that really have a tangible benefit for consumers as soon as you take them out of the box.

Q: While working at Microsoft on the Xbox's voice recognition, it was necessary to tell the computer what people might mean. For example, it did not know the difference between 'apt' and apartment'. So, it would render strange phrases like "Her dress was apartment for the occasion". I think accent plays a big role in this and people will have to adapt to the technologies rather than the other way around.

A: Well, Google is already to the point where it can recognize different people in a household, so that will certainly get better over time. I think it will improve and dialects and accents won't be a problem.

Q: Can it now discern a male and female voice? A child's voice?

A: Yes. Do you remember Palm Pilot (a hand-held electronic organizer)? Palm Pilot had a handwriting technology that they called Graffiti. This was unique to the Palm Pilot platform. If you look at that – it' not the alphabet, it's a hybrid alphabet, so the 'A' kind of looks like an 'A' but there's no line across. The 'E' had to be upper case, so you had different elements to the handwriting technology, so that it could decipher it. So, early on, we had to adjust to it. But now you don't and handwriting technology is getting a little bit better.

Q: In China and Korea for years people have been able to use a stylus or even their finger to write characters on their phones. Google recently developed AutoDraw, which does the same thing for drawing, auto-correcting crude drawings.   

A: But I think you see the technology get better over time. So, I think the same thing will be true with voice recognition. Maybe early on we have to adjust to the technology. Even I have to do that, not so much from a language perspective, but from a question perspective - What I ask it? How I ask it? and over time, it will start to move to more natural language recognition and speech recognition and adapt.

Q: At Microsoft, a lot of our data came from the UK and there are lots of regional accents there, as there are in China, with its 56 ethnic minorities. There was an enormous range of ways people would pronounce even the word 'Xbox'. The amount of people who said 'IxBox' was amazing and 'Egg Box' was also a common one. In the States, there is a wide range of accents, so if you had a deep Southern accent, maybe Siri or Alexa wouldn't understand you.

A: Alexa doesn't do very well with Scottish accents.

Q: Yes, you need subtitles for Scottish dialogue in movies in the States. As well as tech, you also look at a country's economic position. China is the world's second-biggest economy but how much does its GDP affect the growth of consumer electronics and new tech?

A: I think it's less driven by what you see happening from a GDP perspective than consumer's preferences towards technology.

Q: China is now a consumer-driven economy.

A: Right and it's a relatively sophisticated consumer who has an appetite for technology, so that really bodes well, especially in the urban settings. It bodes well for technology uptake.

Q: You spoke before of the replacement cycle. In China, there is an emphasis on the new. People are not interested in anything second-hand, be it cars, phones, laptops, tablets, which is a cultural thing, whereas in Europe and the States people are not so concerned about that.

A: So, here in China you will increasingly see more and more people willing to allocate more of their available income towards technology and technology will be infused in many more things.

Q: There's a growing middle class here in China and they have more and more disposable income than they had before

A: Right and they will allocate more of that towards technology over time.

Q: CES always looks to the future – you have already announced plans for CES 2018 – Could you tell us about your feelings on smart cities and whether this could be the norm in a decade or two?

A: Definitely. Smart cities is an area of enormous opportunity and tremendous growth and it's a natural extension of taking all these different technologies and putting them all together. So, you'll have self-driving cars driving on the roadway, smart home happening inside the homes and so that comes out into the infrastructure. You've got people with mobile devices on the go. All those things start to feed together. 5G will be a strong growth element of driving us towards smart cities.    

 

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Keywords: AI , Tech , Shawn DuBravac , CES Asia 2017 , Shanghai , Consuer Electronics