CES 2021 Day 2 – The lowlights.

CES 2021 limps along.

• Most of the action in the technology sector this week is not to be found on the digital venue.

EVs.

• The EV mania that has characterised the last 6 months has spilt over into the virtual CES to some degree with many of the big OEMs doubling down on their pledge to go all-electric.
• Mercedes was a little more cautious spending all its press conference talking about its hyper screen which is a single piece of black glass behind which are hidden three individual LCD screens.
• For a fleeting moment, I was thinking that Mercedes had gone one up on Byton, but this is another triumph of form over substance.
• Substance would have been a huge integrated user experience covering instrument cluster, infotainment and front passenger but what Mercedes has done is no different to what anyone else is doing with three screens
• The difference is that Mercedes has made it look really nice which is only to be expected from a luxury vehicle brand.
• GM, however, went all-in on EVs and talked about nothing else doubling down on its commitment to go fully electric as soon as possible.
• GM did not stop there and showcased a single person drone concept for urban transport in a nod to the fact that CES would not be CES without some hyperbole.
• The rest of the hyperbole remains missing in action.

Intel vs. AMD

• While Intel gave its spot over to rising star Mobileye, AMD used its keynote to extol its achievements over the last 12 months and show once again how it is currently beating Intel at its own game.
• Lisa Su has presided over one of the great turnarounds of recent times but at the same time, Intel has left the door wide open over the last 18 months or so.
• AMD announced an incremental upgrade (Ryzen 5000) to its mobile processors on 7nm for ultra-thin laptops and the rest was a review of the excellent 2020 the company has had with a good dose of Intel bashing.
• Its new mobile processors boast battery life 17.5 hours general use and 21 hours of movie playback showing that AMD is shooting for the Apple’s stunning M1 performance and power specifications.
• However, the real action was away from the show where Bob Swan graciously announced he would step down to be replaced by long-term Intel veteran and current VMware CEO Pat Gelsinger who was previously CTO of Intel.
• The decision whether to use Samsung and/or TSMC for advanced manufacturing will now obviously be taken by Pat rather than Bob and so I do not expect that this decision to be imminently announced.
• This decision is far more consequential for Intel than it is for AMD (who sold its fabs to GlobalFoundries) because cutting edge manufacturing has always been at the heart of what Intel is.
• This means that outsourcing cutting edge manufacturing to third parties could lead to it losing its edge resulting in an erosion of its historically superb gross margins.
• Pat will also have to work out how to respond to Apple’s M1 which has finally demonstrated what can be done with Arm processors and will have galvanised all of the Arm semiconductor makers to redouble their efforts.
• Intel is not out of the woods by a long shot, but I am kicking myself for not buying at $44 like I said I should.

Healthcare.

• By far the most disappointing theme of the show has been healthcare technology.
• Never has there been a better moment or stronger demand for technology in this area, but the virtual show is pretty devoid of ideas of how technology can get us back to normal.
• Instead, most presentations are about how things have irrevocably changed (I disagree) and how we must all get used to the “new normal”.
• It is possible that all of the smaller more interesting companies in this field have either stayed at home or are impossible to find in the haystack of 2,000 names on the digital exhibition.
• Once herd immunity has been achieved either through vaccination or recovery from infection, COVID-19 is likely to become just like the flu which I suspect has been banished by the new virus on the block.
• This means that every year the vulnerable get vaccinated and the rest of the population decides whether or not to be vaccinated.
• On this basis, I think that things will go back to the way that they were with a few tiny exceptions.
• It will be easier to work from home for those that need to and the adoption of virtual meetings as good enough in some instances will cause a cut to business travel.
• What it will also do is accelerate market demand and acceptance of remote health and remote patient monitoring.
• However, I am far from convinced that the industry and its regulator are capable of delivering to this demand any time soon.
• Against this perfect backdrop, the industry has come up with very little that was not already in development last year and progress remains pretty slow.
• This is because it is heavily regulated meaning that things move slowly and because this technology has to developed to a very high standard before it can be deployed.
• Hence, I suspect that by the time the technology is market-ready, the pandemic will be over and COVID will have been reduced to the inconvenience that pops up every year and everyone will be chattering about something else.
• Hence, anyone with a product ready to go and is looking for funding or for revenues should make the most of the current climate because I think the medium-term expectations of demand may be somewhat overstated and overpriced.