a16z Podcast | Pulse Check on Consumer Tech Trends 2019, CES and Beyond

CES Structural Shifts

• The event functions as three distinct shows:
  • Major Tech Giants: Occupy 50% of the floor but lack innovation motivation; many (Apple, Microsoft, HP, Dell) are notably absent or present only with non-tech offerings (e.g., restaurants).
  • Grassroots Startups: The primary source of energy and "raw creativity," where founders physically hustle attendees and manage operations via family labor.
  • Component Supply Chain: A dedicated "tent" housing thousands of small companies selling raw materials (hinges, motors, packaging, PCBs) where major OEMs (including Apple) source building blocks.
• Temporal Context: Held in January to align with Q4 sales cycles, gearing the supply chain for product launches 1–2 years in the future rather than immediate consumer retail.

Display Technology Trends

• Curved and 3D TV Failure: Both trends have completely collapsed in the mainstream; curved screens disappeared from stands after a brief peak, and 3D TV failed years ago.
• Flexible OLED Emergence: LG demonstrated a rollable OLED screen that expands from a speaker-bar-sized base (approx. 12-inch square footprint) to a large display in five seconds; expected to cost thousands initially but scale down in price and size.
• Arbitrary Shape Manufacturing: Supply chain shifts from cutting fixed glass panels to custom-making screens in any shape:
  • OLED: Can be curved or non-rectilinear (e.g., wrapped around speakers, cars, or appliances).
  • LCD: Remains rectilinear but available in custom aspect ratios (e.g., ultra-wide letterbox or long strips) to maximize factory amortization.
• Modular Walls: Samsung's "The Wall" utilizes edgeless OLED blocks that can be stacked indefinitely to create screens of any size or aspect ratio (including pyramids).

TV Content & Services Fragmentation

• Unbundling Trend: Content creators (Disney, NBC) are pulling rights from aggregators (Netflix, Hulu) to launch direct-to-consumer platforms, leading to an anticipated 45+ separate apps on devices.
• Discovery Friction: No single aggregator offers universal search; Netflix's discovery engine is siloed to its own content, creating a fragmented user experience where finding specific shows across services is difficult.
• Hardware vs. Software Role: TV manufacturers (Samsung, LG) act as "feature phone" makers trying to force software integration, failing to replicate the smartphone model where Apple centralized hardware and services.
• Apple TV Strategy: Apple licensing services to third-party TVs is viewed as an extension of its hardware halo (similar to iTunes on Windows) rather than a standalone service revolution; it does not solve the ecosystem fragmentation.

Smart Home Evolution

• Security & Alarms: Successful transition from proprietary wired systems to wireless DIY kits using standard Bluetooth/3G components, driven by low energy consumption and direct consumer sales channels.
• Smart Locks: Incumbent hardware manufacturers (Schlage, Yale) outpaced software startups by leveraging existing supply chains, manufacturing expertise, and complex distribution networks (architects, contractors, locksmiths).
• Connectivity Layers:
  • Chip-Level Integration: The "connective tissue" is being built into the chip layer (e.g., voice assistants embedded in silicon) rather than hardware brand layers.
  • Voice Assistant Limitations:
    • Apple HomeKit: Failed due to strict hardware requirements that excluded most manufacturers.
    • Alexa/Google: Simplified integration (5 lines of code) but resulted in a "terminal window" experience requiring specific syntax; many devices with logos cannot actually be controlled via voice.
• Adoption Reality: Many devices (e.g., ovens, smart lights) have voice capabilities installed but remain unused ("VCR flashing at 12") because the utility of basic commands (timers, unit conversions) lacks strategic value for platforms like Amazon or Google.
• Strategic Question for Platforms:
  • How to move from having endpoints in millions of homes to driving tangible economic value (e.g., delivery access, increased Prime loyalty).
  • Risk of platform divergence: As Amazon and Google introduce unique features, the "5 lines of code" interoperability will break, forcing hardware makers to choose ecosystems.

Consumer Behavior & Experimentation

• Discovery Phase: The industry is testing which categories warrant connectivity; many "smart" gadgets (electric carving knives, smart toilets, talking beds) will likely fail to achieve critical mass.
• Scripting Complexity: Automation scripts requiring complex "if this, then that" logic are predicted to fail with the mass market, similar to how 98% of the population would not use complex smart home scripts.
• Long-Term Prediction: Connectivity will eventually become seamless and automated (machine learning-based) rather than command-driven, though this is likely years away.

Anecdotal & Cultural Observations

• Novelty Gadgets: Presence of novelty items like "unicorn poop" emoji power banks and Japanese electronic clapping hands for hospitality, highlighting the "maker" hustle and experimentation culture.
• Hustle Economy: Founders from diverse regions (e.g., Ukraine, Taiwan) invest heavily in CES travel and booth costs to demonstrate products directly to buyers, showcasing intense entrepreneurial energy.
• Supply Chain Transparency: The show reveals that a "complete" smart speaker can be assembled by walking through the component hall, buying screens, chips, batteries, and packaging separately, with no single vendor selling the final device.