CES 2016: Smart homes, smart cars, virtual reality

People pass a CES sign during preparations for the 2016 International CES trade show at the Las Vegas Convention Center in Las Vegas, January 3, 2016.
Steve Marcus | Las Vegas Sun | Reuters
People pass a CES sign during preparations for the 2016 International CES trade show at the Las Vegas Convention Center in Las Vegas, January 3, 2016.

The International Consumer Electronics Show, known universally as CES, will be bigger than ever this year, expanding its Las Vegas footprint to 2.4 million square feet to swallow up 150,000 attendees for a glimpse into the future.

But unlike in many prior years, there's no single large overriding theme.

"It's actually hard to get excited about CES this year because there's no focus," said James McQuivey, analyst at Forrester.

"When you think back about some of the more legendary CES years — they were the years of the tablet like 2011, or the years of the e-reader, which was 2010 — those are years where everyone knew there was one big thing happening and you had to go see them. This year, there is no equivalent of that," he said.

Nevertheless, there are still some distinct themes this year: Products that highlight the so-called Internet of Things (IoT), the connected home, autos and virtual reality will all have a big presence.

Intel Smart Home coffee maker and tablet.
Harriet Taylor | CNBC
Intel Smart Home coffee maker and tablet.

Intel — which is aiming to be a big player in IoT — will officially kick off the event with a keynote from CEO Brian Krzanich on Tuesday at 6:30 p.m. ET.

"Intel's innovations, which power tablets, wearables, PCs, smart cars, homes, appliances, cloud computing and so much more are serving as the foundation for the burgeoning Internet of Things," said Gary Shapiro, president and CEO of the Consumer Electronics Association, which sponsors the event.

The big challenge companies face in this space will be selling consumers on the idea of the digital home.

Each will try to differentiate its smart home offerings based on the seamless nature of the user experience and, increasingly, on security. Expect new partnerships to be announced with content creators, financial services companies and e-commerce players.

"We are reaching an inflection point in this whole journey in which the consumer experience, the digital technologies and the sensor technologies are all coming together," said PriceWaterhouseCoopers principal Shahid Ahmed.

McQuivey still doesn't think the market is ready for the average consumer. "I have seen the smart home advances at CES every year for the last five years and they are impressive, but here's what we're lacking in the smart home category specifically — it is a collection of innovations, it is not a single innovation that can catalyze the interest of the public."

"You want one app to rule your entire home, and right now you can't do that and even if you had an app to do it, the devices themselves don't work together in an intelligent way," said McQuivey.

This presents a real problem for the big brands behind the smartest homes on show at CES.

"It's a marketing problem but it's also a technology problem — one that Google is working on very aggressively as the owner of some of the biggest players in that category — Nest and Dropcam. Google is trying to create a single experience," said McQuivey. Nest does not have a booth at CES but its products will be featured throughout the show floor. (Dropcam is now part of Nest which is owned by Google's parent company Alphabet.)

Nest 3rd generation thermostat
Source: Nest
Nest 3rd generation thermostat

Expect a diverse group of companies to attack this market from different angles.

Appliance maker Bosch is also positioning itself aggressively in this category. The company is hosting a news conference on Tuesday at 11 a.m. ET and, along with real estate broker Coldwell Banker, co-sponsoring the inaugural Smart Home Marketplace. Other exhibitors within the marketplace include Honeywell, Lowes and Logitech.

Samsung — best known for its screens large and small — is already generating a lot of buzz around its smart home solutions. The company is expected to unveil new products at a news conference at 5 p.m. ET on Tuesday, the official press day for the conference.

Also on Tuesday, at 3 p.m. ET Qualcomm CEO Steve Mollenkopf will host the company's news conference. He's expected to unveil new products across several categories including IoT, smart home, mobile, health care and automotive.

Volkswagen
Julian Stratenschulte | AFP | Getty Images

The automakers will also be out in force, with 7 out of the 10 biggest auto manufacturers at the show. The industry is taking over 25 percent more exhibit space than last year and executives are expected to unveil new connected car technology and driverless vehicles.

In a keynote on Tuesday at 11:30 p.m. ET, Volkswagen's Herbert Diess will unveil a new electric car and talk about the importance of electric mobility for the industry. On Wednesday at 4 p.m. ET, General Motors CEO Mary Barra will take the stage to share more on the company's next-generation pure electric vehicle, the Bolt EV, first announced at the Chicago auto show.

LG

Although far from a mass market reality, autonomous vehicles are likely to create a lot of buzz. On Tuesday at 7 p.m. ET, Kia Motors will unveil its autonomous driving program and discuss the company's progress and innovation around the connected car experience, according to a press release.

On Wednesday at 1:30 p.m. ET, Mobileye's Amnon Shashua, the company's co-founder, chairman and CTO, will reveal technology it's developing for fully autonomous driving, according to a press release. Mobileye's products are integrated into a slew of vehicles from automakers including BMW, Ford and General Motors.

Source: Apple

Wearables will once again be center stage, with one big differences over prior years: Apple has entered the market.

"While Apple's Watch has had choppy success out of the gates it has helped spearhead a major paradigm shift in the acceptance/adoption of wearables technology along with a number of other players (e.g., Samsung, Microsoft, Fitbit, Jawbone, etc.) in the space," writes FBR analyst Daniel H. Ives.

FBR believes the wearables industry represents a $20 billion market opportunity over the next three years and that third-party apps will drive adoption.

"While it remains very early days, we believe wearables represent a major tangential growth opportunity in terms of the Internet of Things (IoT), which is expected to be the centerpiece of much technology innovation slated for 2016 with Apple, IBM, Google, Intel, Cisco, and Microsoft leading the IoT charge," writes Ives.

Still, 2016 is being called the year in which wearables "disappear," becoming more fashionable and less clunky. To that end, expect partnership announcements between tech companies and fashion brands looking to break out in 2016. One example: MasterCard. The company which will showcase the ways in which it is embedding payments into consumer products, enabling purchases with the tap of a ring or flip of the wrist, building on an announcement made back in October.

Some innovations may seem a little "out there," at least for nongeeks.

For example, Child Angel will demo a tracking bracelet for kids powered by Intel. The device provides location detection and sends biometric data to parents via an app. The partnership is part of the Intel IoT Platform and illustrative of a broader trend in which tech giants will seek to own the IoT ecosystem of devices.

Proving that no space is safe from tech's tentacles, start-up Variowell will show off its new patented smart foam, designed to turn a regular mattresses, chairs and car seats into smart devices. The foam reacts to data collected by an app on a wearable device to adjust firmness according to sleep phases.

Once again, McQuivey thinks much of this might be a bit too ahead of its time. "If you survey consumers and they say 'yep I want it, can't wait,' but what they mean by that is 'I am ready for someone to hand it to me ready formed and ready to go,' and none of these technologies are delivering that fully formed ready-to-go experience for the home, for the body and for the car — not yet."

Virtual Reality
Colin Anderson | Getty Images

That said, one category analysts agree will present some excitement is augmented and virtual reality.

"The big buzz heading into CES 2016 is around 'rolling out the red carpet' for virtual reality products/headsets/software," writes Ives.

McQuivey agrees. "The one area people immediately understand that this is gonna change their lives is the area of augmented and virtual reality."

Analysts expect the battle over VR to kick into high gear as new platforms hit the market in 2016. Facebook's Oculus Rift, HTC Vive and Sony PlayStation VR are getting ready to release their platforms in the first half of the year, and the success, or failure, of those products could alter the landscape for years to come.

A Google Cardboard virtual reality headset for Android smartphones is shown during a promotional event in Paris.
Romuald Meigneux | Sipa | AP Images
A Google Cardboard virtual reality headset for Android smartphones is shown during a promotional event in Paris.

McQuivey likens the VR market today to the personal computing market in the 1990s. Everyone understands that the technology will be powerful and significant, but most households still cannot afford the real deal. That's likely to remain the case through 2016, he said.

"That doesn't mean you can't go buy Google Cardboard and put your phone in front of your eyes but that will actually make you sick. The really high-quality VR like Oculus, the really high-quality mixed reality like HoloLens, those things are immediately understandable from a consumer perspective ... it's just that we're not going to see very many of them during 2016," said McQuivey.

When VR gets to the point where it works flawlessly and is affordable, it will be "a life changer," he said.

Matthew Lloyd | Bloomberg | Getty Images

The other hot hardware item this year is drones. Correspondingly, The Unmanned Systems Marketplace will expand its footprint by more than 200 percent this year.

"Consumer drones will also be a highlight of CES, as this technology makes the transition to consumer use with a number of innovative private technology players as well as GoPro (e.g. Karma) focused on this multibillion opportunity," according to Ives.

Not to be left behind, expect the big names of years past to make a slew of product announcements as well. Panasonic will host a news conference on Tuesday at 1 p.m. ET. The company will offer tours of its booth which, in the vein of technology getting out of the way, is themed "A Better Life, A Better World" and will showcase new products and solutions. LG will host a news conference on Tuesday at 11 a.m. ET The company is promising to "shake up the home entertainment and appliance market with the launch of its new, premium LG SIGNATURE lineup," according to a press release.

When it comes to the content consumers will be watching on all these screens, Netflix CEO Reed Hastings will lay out his plans for international growth in 2016 in a keynote on Wednesday at 11:30 a.m. ET. The other big name on the content side at CES is YouTube. Its chief business officer, Robert Kyncl, will close out the conference, delivering a keynote on Thursday at 7:30 p.m. ET.