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CES will present us with a tsunami of products, but Steve Koenig, vice president of research at the Consumer Technology Association, the group that puts on the big tech trade show in Las Vegas, helped sort it out by pointing out key trends to watch.
Among the things he foresees: Enterprise technology will drive innovation forward and help pull us out of a recession. We’ll turn to robotics, AI, and the metaverse to deal with shortages of skilled workers and other things that have become scarce in the post-pandemic world. Koenig foresees metaverse as a service and the metaverse of things. It’s the ultimate way to combine buzzwords together.
Koenig said that innovation in enterprise tech comes from both big and small companies. But a recovery is vulnerable in part because we aren’t sure what impact the global economic downturn will have on the technology supply chain, he said.
“It remains vulnerable,” he said. “You need only look at China (and its struggles with a new wave of COVID) to see how vulnerable it is.”
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Yesterday, the CTA said that U.S. technology retail revenues will fall 2.4% to $485 billion in 2023 from $497 in 2022. This new data puts revenues slightly above pre-pandemic levels, following a three-year surge in consumer technology spending that peaked at a record-breaking $512 billion in 2021. While CTA anticipates a looming recession and inflation will weigh against consumer spending in the coming year, consumer technology industry revenues will remain roughly $50 billion above pre-pandemic levels.
Koenig noted that shipping costs are coming down and shortages from the pandemic-induced supply chain maybe be abating. He said that semiconductor demand is softening and chip inventories are rising.
“The bad news is we are moving from a chip shortage to potentially an oversupply,” Koenig said. “The downside risk of oversupply is we might see chip architectures deferred as we work through this inventory.”
He noted there is a shortage of 10 million skilled workers in the U.S., and enterprises can’t hire enough workers.
“Across the global economy, businesses are struggling to find workers. There are layoffs but humans are nice to have. And still there is stubborn inflation and rising interest rates. The Federal Reserve raised rates six times in 2022. He said 60% of economists surveyed believe the U.S. will slip into a recession in 2023.
But he pointed to an optimistic paralell. He noted that in the great recesssion of 2008 and 2009 saw consumer innovations materialize like 4G technology, smartphones, tablets, netbooks and mobile broadband. And Koenig believes that we’ll see similar waves of innovation this year with 5G industrial and internet of things applications, connected intelligence, autonomous systems, and quantum computing.
He thinks that across this decade we can expect to see digital transformation with cloud, AI, cybersecurity, software-as-a-service, supply chain, retailing on the consumer side and changes in the enterprie with 5G enterprise and industrial, Web3, smart factories, autonomous systems, and the metaverse. In fact, he suggested we’ll see the “metaverse of things,” whatever that means.
He said enterprises will deploy these technologies that will underpin the “entire global economy.”
Venturing out on a limb, Koenig said, “The metaverse is closer than you think.” He acknowledged the metaveres is a speculative term, but he said it is a real trend, even if it has been greeted with skepticism.
He noted the driver on the enterprise side is digital twins, like the designs of virtual factories that precede the building of the factories in real life for companies like BMW and Mercedes.
Koenig also said that electric vehicles and the charging system that goes will them will also galvanize economic activity. As autonomous vehicles become real, they will help offset other trends. For instance, self-driving trucks can offset the shortage of truck drivers in the U.S. Koenig also noted that entertaining people in cars and the growth of screens and subscription services in cars will be a catalyst for growth.
Koenig also foresees growth in digital health mental wellness, and virtual reality therapeutic applications. AI tech is spreading rapidly. He noted how John Deere is adopting AI for autonomous tractors that can operate 24/7 and help us deal with the need to feed the ever-growing population of the world.
And he noted that gaming will fuel growth, as the U.S. now has 164 million gamers ages 13 to 64. He said three quarters of the population plays games, and the average time played per week has gone up from 16 hours a week in 2019 to 24 hours a week now. Mobile gaming has been key to that, as has the trend around gaming as a way to connect and socialize.
Lastly, he said that the services economy continues to grow, with things like grocery delivery services catching on. About 31 cents of every dollar generated in the tech economy is now about services.