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SP360: Service Provider

The annual Consumer Electronics Show, held last week in Las Vegas, has been called the “Super Bowl of Technology.” This year’s event was no exception. The largest in the 45-year history of CES, it featured 3,250 exhibitors, 150,000 attendees, and more than 20,000 new products unveiled. But while it may have been impossible to nail down every trend, breakthrough, and future implication, some key themes emerged as I wandered the sea of vendors and engaged in many customer discussions.

Particularly from a service provider perspective, here are a few of the most important trends that seemed top of mind throughout the show:

  1. An Explosion of Endpoints. In recent years at CES, particular devices, such as the iPad, or new technologies, such as 3D, proved dominant. This year, however, the show was characterized by the sheer, massive breadth of innovative new devices. This vast permutation of media-rich gadgets is the result of accelerated innovation that is bringing ubiquitous, mobile access to all endpoints. Even the TV is “becoming mobile” as it gains the ability to access content wirelessly. At the same time, these devices are getting “touchy-feely,” if you will, as touchscreen technology grows equally ubiquitous.
  2. Going Ultra. One new technology, however, did stand out: 4k. Ultra-high definition (UHD) television—which doubles the resolution of HDTV both vertically and horizontally—seemed to be everywhere, and is clearly benefiting from a major push from manufacturers. This has big implications for service providers, considering the impact on bandwidth, but will also affect content providers and broadcasters. After all, that growing legion of consumers with 4k monitors or 4k TVs will want to access 4k content. A concurrent trend is the spread of low-cost high-definition video cameras along with related and equally powerful postproduction software.
  3. All in the Context. Knowing the customer has always been crucial in delivering meaningful media experiences. But we are rapidly approaching an inflection point in understanding consumers in ways never before possible. Beyond simply knowing the devices they are using or the kinds of media they are accessing, consumer behavior will be tracked in a contextual dimension. This will include understanding the behavior of nearby consumers, which other devices are involved, social-media links, and even a consumer’s current mood. As this type of Big-Data-driven contextual information becomes increasingly accessible, it will foster a new level of monetization opportunities built around personalized experiences and advertising (while also raising potential issues around consumer privacy). Increasingly, Wi-Fi will loom as an important element in this area as microlocation-based services track consumers with great precision around a specific site, particularly inside buildings.
  4. A World of Connections. Speaking of Wi-Fi, almost everything is soon to be plugged-in and Internet-connected—whether sports bracelets, low-end cameras, home lighting, health-monitoring devices, cars, you name it. This will represent a crucial trend for service providers, if they explore the kinds of value-added services that will need to be created.
  5. Follow the Crowd. Many important new innovations at CES this year—including smartphone attachments, home-monitoring software, and gaming devices—were the result of crowd-funded investment services such as kickstarter.com. We expect this type of crowd-sourced financial backing to play an increasingly important role in future innovation.
  6. A Call for Content. Consumers are getting more and more accustomed to purchasing and streaming professional video content, particularly movies and television shows. This includes both one-time downloads and subscriptions. From a media company perspective, it is essential to provide a breadth of content that is easily accessed on multiple devices.

As always, CES is a great barometer for where the industry is heading. The main themes at this year’s show should presage another year of explosive innovation and rapid change, along with a need for agile adaptation.

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