What’s different at CES 2023
The party ends after 56 years at CES. “The economy – and I don’t think the general mood – gives technology a proud place”comments Carolina Milanesi, president and principal analyst of consumer technology research firm Creative Strategies, upstream of the well-known Consumer Electronics Show from Vegas. CES 2023 marks a sea change where profitability has replaced hype, and experience has replaced product.
From January 5 to 8, the pinnacle of technological innovation, held since 1967, opens after two years of 100% physical absence. The atmosphere, despite the many new gadgets and the presence of over 100,000 visitors, has changed a lot. The opening, first to the press on Tuesday 3 and Wednesday 4 January, was “less flamboyant” to journalists who were present at the venue. Previous years indeed marked the past.
Technology has progressed, the economy has reversed course. Caught in size inflation, consumers are looking more to tighten their belts than to spend on a hot new product. However… innovation has never been so sustainable. France, with its 170 startups, was presented this year as the largest international delegation. And compared to 2020, this event has never been so international.
What investors don’t want to see anymore
Historically, CES was a meeting place for today’s craziest gadget lovers. There are a lot of connected objects. But unlike other issues, 2023 comes when venture capital fundraising is far more coy, and a time when investors no longer want to make the same mistake. The Nasdaq has fallen, hundreds of trillions of dollars have evaporated, and its helicopter-money stimulus policies are far behind us. Now investors are no longer drowning in free money. Consequence: they want something concrete, marketable. They want demand, market and profitability.
No more projects coming to CES for the hype, for the coup com’. Make way for a product that needs to sell quickly – as French brand Withings is betting on its new urine analysis system. An increase in interest rates, to fight inflation, makes investment more selective. “This really pushes companies to focus on real value for customers”added Carolina Milanesi.
“I didn’t think this utopian, super cool, super fictional gimmick would go away”commenting for his part Peter Csathy, of consulting and analysis agency Creative Media. “However, they are not receiving the allure they should have in a dynamic economic environment,” he added.
The themes raised by startups are also in the midst of upheaval (at CES, the locomotives are cars, health, and the metaverse), due to the very unequal distribution of capital. Investors are increasingly suspicious and critical, especially when the company’s activities involve selling physical products. Various scarcities and the explosion in raw material prices cast doubt on the durability of a box. To the extent that it further increases the importance of experience.
From the Consumer Electronics Show to the Consumer Experience Show
CES in Las Vegas stands for the initials Consumer Electronics Show. That said, this year in particular, some people prefer to talk about it Consumer Experience Show. The pinnacle of technological innovation has followed its generations and over time, software has led hardware. To the extent that it becomes central and changes the approach of both consumers and brands.
We’ve even seen it in cars: today, cars no longer stand out for the technical side (the batteries come from the same supplier, as the motors) but for the design and interface inside. This would be more the case when the car was more of a shared item (as at Lynk & Co) and driving was left to the machines. At CES 2023, it’s not without reason that BMW presents a concept car that doesn’t highlight its design but its human-machine interface.
“CES is moving away from a consumer electronics event and increasingly into a consumer experience event”commented Ramon Llamas, director of IDC Research, to CNN. “We will see new devices popping up here and there, big TVs, cool cars and gadgets galore. But the salon’s secret sauce lies in what the software can do” he added.
On this subject, artificial intelligence is on everyone’s lips. And make no mistake: talking about experience in technology will be a way of diverting the conversation about AI. This will “give meaning to consumer behavior and configure device experiences to better meet their needs”, ultimately explained Ramon Llamas.