Its too hard to break through consumer electronics with services and ecosystem as the main players

 Its too hard to break through consumer electronics with services and ecosystem as the main players

Netease science and technology news on January 7, according to foreign media reports, new categories and sensational consumer electronics products are increasingly difficult to produce, Fitbit, magicleap and other start-ups have made little progress in recent years, financing is cold, the current driving force for the development of daily consumer electronics is service and ecosystem.

Ces in Las Vegas is an annual technology and electronics carnival. Through this event, you will also find that new products are becoming more and more rare and difficult to produce.

More than a decade ago, one of the most popular products at the show was LGs watch phone, which has a music player and a built-in camera for video conferencing. It turns out that integrating these functions is much more difficult than it seems. The genius of apple is that it can effectively integrate various technologies into the apple watch, making users get a smooth and consistent wrist wear experience for the first time.

With the coming of the new decade, the fans of electronic products will come out again. But the factors that stimulate the consumer electronics market have changed. The main driving force behind these essential products today is not technology and equipment, but services and ecosystems. Usually, its the technology and media giants that dominate all this behind the scenes.

One sign of this change is that breakthrough innovations - what audiences want most - have become increasingly scarce. In the new world of connected devices, independent devices that break the rules have become scarce. Even with breakthroughs in new products, such as GoPros wearable cameras, its hard for them to stay ahead unless they can provide an attractive service to keep consumers interested and encourage them to buy more.

In 2019, a series of disappointing performances by consumer electronics start-ups proved this. Anki, one of the most technologically successful companies in the field of personal robotics, closed down despite its once popular robot toys. Fitbit has been struggling to turn its fitness tracker into a more practical health device, but failed to do so and eventually had to sell to Google. Augmented reality fans have been waiting another year for magicleap to open a new ar ecosystem of devices and content. Magicleap has raised more than $2.5 billion since its inception.

No wonder start-ups have lost enthusiasm for the industry. U.S. investors invested $1.74 billion in consumer electronics startups last year, the lowest level in four years, down nearly 30% from 2018, according to CrunchBase. It has always been very difficult to set up a company in the field of low profit and popularity supported hardware, but it is even more difficult to set up a company in the field of Internet equipment.

Peloton, a sports equipment maker, has had an unexpected success, with a successful IPO (initial public offering) last June, thanks to its built-in services and subscription revenue stream. However, it is too early to judge whether it can go further. This year, there will be a large number of copies of peloton in CES, so people will try to apply pelotons model to other personal technology fields at the same time.

Nowadays, service has become an important force to promote the progress of personal science and technology. For example, streaming video has become one of the hottest areas in 2019 as media and entertainment companies launch quality services. Voice assistant, led by Amazon Alexa and Google assistant, has penetrated into many electronic products and become the driving force behind them, which makes it more difficult for hardware manufacturers to differentiate their own products.

This years performance may also provide the next queue of cloud services to disrupt consumer technology. These include cloud games, where Google recently entered the market to point to most of the worlds computing power, which once disappeared at the fingertips of consumers in the data center, even though a new generation of game consoles is about to launch.

All of these services have boosted peoples demand for digital devices, but the subscription model and other new business models they support may bring service companies higher profits than hardware manufacturers.

Another driving force behind this is the power of the consumer technology ecosystem. In the field of smart home devices, the integration of brands and technologies, as well as peoples increasing dependence on personal data, make Amazon and Google become powerful competitors.

The most successful consumer technology ecosystem company is apple, for example, a large number of companies are trying to replicate the success of their wireless headset airpods. For consumers who are used to using Apple products and have lived in the apple world for a long time, none of these companies products are attractive.

All of this will not prevent the industry from competing to create the next blockbuster product. In the past few years, intelligence and interconnection have been the slogans defining the frontier of consumer electronics. With 5g connectivity and artificial intelligence for personal devices bringing new impetus, a technological revolution is brewing.

At CES, we will see some common innovation attempts, which will integrate these new technologies into the next wave of daily consumer electronics products. But when all the dust settles, most of the products will be added to the ranks of LG watch mobile phones of that year, and discarded into the digital waste pile. (ROBOM)

Source: Wang Fengzhi, editor in charge of Netease Technology Report