Dreams of consumer electronics

There was a time when CES was magical. Like all of Santa’s elves had spun-off into gadget building startups around the world and congregated to present a never-ending line-up of toys for grownups.

But now the lines already loom. And to many CES has become the one to avoid. It’s become, in fact, a vignette of seniority if you can choose your own fate and not go. Between the biz devvers, booth people, and Vegas’ general atmosphere of inauthenticity, it’s hard to look at CES with the wonder it tries to provoke.

More broadly the industry for gadgets and devices is having a hard time. GoPro’s share price just dropped to a historic low because it got hit hard by sluggish demand for its new camera (and the price protection it offered retailers) and because it is exited the drone market. VR is still a work in progress, and smart cars still look nothing like what Japan already had in the 90s. On top of that, imagine having to organize your biggest press conference of the year right as ghoulish flaws like Spectre and Meltdown haunt your customers. The Internet of Things That Don’t Work.

But herein lies the true value of this convention. This is not an informational event. We don’t come to learn anything, really. Instead, in my experience, it is a ritual where we join different grouped settings and discuss the industry’s drama. Comfortably seating behind a glass of whatever paid for by whomever, we gawk and gossip. Piercing past the glitz, we share the perspective of those who’ve seen too many Christmases to believe them anymore.

And for that CES is perfect. See you there.


Spotify files for $20B IPO
It’s been in the works for a while but it looks like it might finally happen. According to one source, Spotify confidentially filed for a public offering with the SEC in December, making this the first and likely biggest IPOs of the year. The firm is said to be valued up to $20B, which is in line with other recent media IPOs. More so, Spotify has over 60M paying subscribers worldwide and continues to outperform competitors like iTunes, and generates about $3B in annual revenue.

The soft spot in the whole thing is the tiresome battle over ownership. Spotify necessarily relies on music publishers for content and given the consolidated nature of that industry, the streaming platform will likely be permanently forced to obey its masters. Currently many of them are proving willing to play ball and license their music instead of building their own distribution solutions which is happening in digital video content. Disintermediation by one or two of the major labels is not unlikely, but it will be impossible for any of them to replicate the strength of Spotify’s user analytics and recommendation engines. My guess is the labels will eventually be happy with the insights that Spotify’s data provides into emerging music trends and consumption patterns. Link

PlayStation 4 install base now at 73.6M 
A combination of discounting, bundling and ongoing upgrades (Slim, Pro) has sustained momentum for Sony’s current hardware generation. This in spite of Nintendo’s performance with the Switch and Microsoft’s ambitious release of the Xbox One X. These figures put the PS4 roughly on par with Sony’s best-selling console ever, the PS2. More so, 2017 was the PS4’s best year yet, with 20.2M units sold compared to 17.5M in 2016. Finally, the current number of subscribers to Sony’s PlayStation Plus service has reached 31.5M, or roughly 43% of installs, which bodes well for digital earnings in the coming year. Link

Processor flaw exposes everyone’s device to god knows what
This is how the world ends. I had hoped for some HD martial arts showdown with epic music, but with no less than every device built in the last two decades vulnerable it will likely be a quiet suffocation as your gadget craps out. Somewhere between the need to keep increasing processing power and efficiency to entice consumers and keeping things secure, that latter lost out. But you wouldn’t know it because it’s all super technical and secret. All major firms have issued statements and are working on patches. This time.

Google invests in Chinese esports streaming platform
Probably because its search engine is banned from China, the tech giant has been looking for other inroads into one of the most sought-after markets. One side-window, apparently, is Chuschou, a mobile game live-streaming company. Google led the $120M investment round. (Previously Google invested in AI startup Mobvoi in 2015 and opened an AI lab in Beijing last December.) Chuschou has about 8 million streamers and 250,000 daily live streams. Link

Saudi Arabia lifts 35 year ban on cinema
Given the current state of the film industry, and in particular the changes in distribution, large cinema companies are unsurprisingly excited about tapping the Saudi market. Contenders like IMAX, The Vue Interantional, and AMC are all in talks about hitting the ground running when the ban officially lifts in March. The expectation is that around 300 new movie theaters will open by 2030, generating $24B in revenues, and creating 30,000 jobs. But the movie business there will also be unique: there’s talk about separate seating areas for “single men, families and women” and, of course, censorship. But that currently doesn’t seem to ruin the fun yet for an industry that has started to struggle in recent years in the face of digitalization, and the arguably disappointing box office revenues of one of the major film franchises, Star Wars. Link

That was helpful. I’m going to SUBSCRIBE!