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Panel discussion: The next big thing in consumer electronics


The CEO Forum held at China Sourcing Fair: Electronics & Components included a panel discussion where industry specialists shed light on current and upcoming trends.


Below are excerpts of the discussion.

Panel participants:
Francis Fong, President, HKITF
George Stepancich, Member of the Executive Board, Consumer Electronics Association (the US)
Dr. Allen Wong, Convener, CEA
Alex Chung, COO, Samsung Electronics Hong Kong Co. Ltd
Walter Leung, General Manager, GfK Retail & Technology Hong Kong Ltd
Moderator: Ray He, China Bureau Chief, Global Sources

Ray He: Good afternoon. I am honored to be the moderator for this panel discussion. Today, we have many participants representing the consumer electronics, communications and computer industries. My first question to our guests is will there be any clear boundary between these three industries in the future, or will they be unified into one integrated industry? I would like to invite Mr. George Stepancich to take this question.

George Stepancich: From my perspective that ship has already sailed. We already have a convergence in those 3Cs under the umbrella consumer electronics. At the end of the day, I view most products that we consume to be consumer focused and the term consumer electronics seems to be fitting. Those other elements of computing and communications are attributes of consumer electronics products, so what we see here is that smart or intelligence formation in consumer products that Alex very eloquently talked about today. Our devices are becoming more intelligent as more computing power is built into the platform.

In addition, we see emerging devices are very prevalent. The definition of an emerging device is a device that has not been invented yet. If I turn the clock back about a year, a tablet was considered an emerging device, and now one can almost say that a tablet is mainstream. So our industry is propelling us forward in space and time at an exponential rate. As we think about it, two years become four years, and four years can become 16 years in terms of the rate of growth and the rate of change.

In terms of the 3Cs, I would like to add another couple of Cs. You cannot ignore cloud-based computing as it comes to the convergence of consumer electronics and computing platforms, and communications devices. Essentially everything is connected, and most likely that connectivity will take place in the cloud. And so the cloud is going to be very important in how we integrate and how we communicate with all the various devices, be it a smartphone, a tablet or a wide screen TV.

The second C I would like to talk about is content. The viewing of content on our devices is going to define what that device looks like. If we look at the consumer being at thecenter of the universe and looking out, the kinds of things that will be consumed by those consumers is going to be content. Be it a video, be it an application. And that is going to drive the rate of change in our devices as well. We are seeing retina display by iPad, and some of the wonderful things that Samsung is doing in terms OLED.

And the third C I would add is community because we see the socialization of content being stretched across the gamut. We see companies like Facebook with close to a billion users providing this community of content. And additional new media companies will be sprouting up everyday. I think in this industry this is where the action is at. This is the place to be.

Ray He: My next question is related to Google Android. We have begun to realize that Android will be something to the next decade what Microsoft Windows was to the 1990s. It will be the software platform that will enable most of the interesting and diverse devices in the future. We would like to ask one of our specialists about the future development of Google Android. My question is to Mr. Francis Fong.

Francis Fong: All the apps and services from Google such as Gmail, Maps, Documents are for free. Their OS platform is multiplatform, and it is being used in a range of devices such as feature phones, smartphones, in-car devices, tablets and even watches. And these devices using Android are interacting with the back-end.

It has been difficult for Microsoft to follow Google’s model of advertising and marketing. But Microsoft is catching up. If Google continues this pace, they will surpass iOS.

Google, as a company has come up with very interesting and inspiring projects. The latest being Google glasses.

Ray He: Recently, we have started to hear about smart TV. Many industry giants such as Google and Apple are optimistic about its future market prospects. These products usually boast flexible software applications and Internet access capability. I am sure that Mr. Alex Chung is the right person to address this question since Samsung is a heavyweight player in this segment.

Alex Chung: I believe the smart TV is a very strong trend. Previously, for consumer electronics products, especially TVs, the main consideration was hardware such as the features, frequency and design. But currently for TVs, we are also thinking about the type of OS platform.

Even though at this stage, the OS systems are very closed or proprietary. But definitely the platforms will further open step by step. Companies are thinking OS is key to deliver applications to link different devices such as mobile phone, tablet and TV.

For TVs, the OS platform is becoming more important. This is because currently TV content is not just the one-way broadcasting programs, but nowadays customers want to choose. They want to decide what program to watch and when, especially on the Internet.

In terms of smart TV, the content is more important. The content is not fixed or one way, but it is based on customer’s favorites. So content development is one of the very big developments for TV.

Second, I believe the application or eco system is important. People accessing the Internet previously would generally stay in the bed room or study room. But that trend is changing. People want to have a family gathering and do things together, such as fitness-related activities or internet games.

Third, solutions and connectivity are important. A strong Wi-Fi infrastructure can create a strong and virtual information and storage-sharing platform. That is very important for linkage of devices.

One day even our home appliances will be linked. For example, in the future, if you run out of milk, your refrigerator will access the Internet to find the cheapest price for you and alert you on your mobile phone and TV.

Ray He: We are also hearing more about cloud computing, which is a delivery of computing as a service rather than a product to the computers and other devices as a utility over a network. But what does this really mean to consumer electronics manufacturers? Are there any emerging opportunities ahead? Let us invite Dr. Allen Wong to take this question.

Allen Wong: Cloud computing is the buzzword for this year. The telco industry has been using this word for more than a decade, but it never took off mainly because there were a few missing parameters in the equation. There was a lack of ubiquitous and always-on connectivity, which we can currently resolve easily with the advent 3G and 4G technology.

And second, the lack of internet-connected devices was also a reason. Without these devices cloud computing could never take off.

And as a telco, there is definitely an opportunity. One is we provide the connectivity, and that is how we charge our data rate plan.

And secondly we are also the beneficiary of cloud computing because we have the infrastructure to host the applications.

Traditionally, telcos are not good creators of applications, particularly Internet apps. Manufacturers are definitely experts in making devices but they cannot create apps or platforms to support apps.

The only way to make use of this opportunity is to work with someone who is creative enough to come up with an app to put on the server as a cloud service, and leverage on the proliferation of devices and ubiquitous connectivity provided by telcos.

I can share with you some of these popular applications. Web-based video is one of them. As an operator, we are happy and wary about this. We are happy that people are making full use of Web-based video services.

We also see behavioral changes when people are taking pictures. And that is another upcoming trend. Companies are promoting Wi-Fi cameras, which people can use to upload photos with the location and other details such as time stamp. This will be another way to create a successful cloud app.

Also, I would like to share some notes from CES. The vehicleindustry has some opportunities, particularly in intelligent transportation systems. There are many manufacturers making these devices. Together with location-based services, these can be used by the vehicle industry, or even the government to better manage the traffic flow.

And social networking for sure will continue to grow.

The gaming industry has also some possibilities. In the future, people might not need game consoles with strong processing power because the processing will be in the server provided by the cloud service provider. All you need is connectivity and a rendering device with a high resolution screen. We have already seen successful products like this.

Ray He: Another trend we hear in the industry is the Internet of things. We would like to invite another industry specialist to help us decode its implication for consumer electronics. Let us invite Mr. Walter Leung to take this question.

Walter Leung: Thanks to the smartphone, the Internet has become very personal and accessible. But how has it actually shaped the lifestyle of consumers. So far there has not been any research solution to successfully monitor and measure Internet usage. And that is because of the nature of the Internet itself. The data sources are often fragmented and it is hard to get representative and comprehensive granular data to paint a clear picture of Internet usage.

However, in recent years, because of the smart phone and tablet, mobile Internet has become very prevalent. We see data volume going up in leaps and bounds every quarter.

We believe mobile Internet will be a dominant way of accessing the Internet to make purchases, look for information and to connect with friends.

Mobile Internet itself is much easier to track because all the data sits with the carriers, and there are only a definite number of carriers in every country.

If a research company can work with carriers to collect data, those will be very granular, accurate and representative of how people use the Internet. That can provide powerful insight for content and app developers.

But it has not arrived yet because we have to tackle different issues such as deep packet inspections, how to extract the data, and how to filter the noise.

Market research companies need to reinvent themselves to catch up to the digital age.

Ray He: My last question is open to all our guests. In the past decade patent royalties were affecting industries such as DVD players and Bluray players. But now as the industry is more inclined toward open source, do you think this will continue to be an issue?

Francis Fong: Although more open platforms are being adopted, major companies are still fighting over intellectual properties. This demonstrates that not everything is for free. The platform is free, but the business model is shifting where now the advertiser is paying for the revenue of the platform.

Allen Wong: In a nutshell, it is also a way to deter opponents in the market. But this is not a healthy situation and does not benefit consumers.

George Stepancich: IP is at the core of the discussion here. Competing standards have always been and they will always be. Android versus iOS is some form of a debate and consumers usually vote with their wallets, and that is how it is settled in a free market.

But I will say that there is some caution and concern in terms of IP because we are looking at changing IP laws in the US. It is going to be a first-to-file system very much like the rest of the world. And I fear a little bit for the innovation aspects, because so much innovation occurs at the micro level in the US. You have small companies that develop the innovation, and hope they can file the IP, which is very expensive.

My concern is if only the big companies like Google, Facebook and Microsoft can file patents just because they can afford to file patents, then I fear that some of the little guys will not be able to innovate as quickly because they will be snuffed out even before they get started.

Ray He: Should chipset makers whether they are in China or outside pay more attention to this issue?

George Stepancich: Chipset manufacturers are always going to try and protect their IP. Enforcement of the IP is also the flipside of that coin. My understanding is that China has the strictest IP laws, but the enforcement of the laws sometimes gets in the way.

Ray He: Thank you all for your time.

Note: This article "Panel discussion: The next big thing in consumer electronics" was originally published by Global Sources, a leading business-to-business media company and a primary facilitator of trade with China manufacturers and India suppliers, providing essential sourcing information to volume buyers through our e-magazines, trade shows and industry research.

All price quotes in this report are in US dollars unless otherwise specified. FOB prices were provided by the companies interviewed only as reference prices at the time of interview and may have changed.

Disclaimer: All product images are provided by the companies interviewed and are for reference purposes only. Those product images featuring products with trademarks, brand names or logos are not intended for sale. We, our affiliates, and our affiliates' respective directors, officers, employees, representatives, agents or contractors, do not accept and will not have any responsibility or liability for product images (or any part thereof) which infringe on any intellectual property or other rights of a third party.

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