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We’re almost a month removed from the 2016 International CES, which was quite the crowded bazaar of electronic gadgets. I’ve already reported on what I saw at the show; now, I want to take a few minutes to do some “Monday morning quarterbacking.”

Quarterly reports in this week from two of the CE world’s titans – Apple and Samsung – aren’t very rosy. In fact, both companies are predicting a slowdown in sales of smartphones, which was arguably the hottest CE category over the past six years (even more so than televisions). Although shipments of smartphones are predicted to rise this year, consumer demand for them is in decline.

That shouldn’t be surprising. I bought a Samsung Galaxy V in December of 2014 and it’s still serving me well. In fact, it can do more things than I need, so I’m not likely to replace it when my service contract expires this coming December. (Yep, I’m one of a dying breed of two-year service contract holders!) And I suspect that many other smartphone owners feel the same way.

Tablets were also supposed to be hot prospects for 2015, with some analysts predicting 18% year-to-year growth. Yet, tablet shipments actually went into decline, while sales of laptop computers actually exceeded predictions. Once again, if you have a tablet that’s a couple of years old, there’s no real reason to replace it unless the battery goes dead.

The only drawback with some of these products is inadequate memory capacity. Most phones and tablets start with 16 GB of memory, expandable with micro SD cards. Yet, given how quickly apps and downloads can gobble up that space, it’s wiser to start with 32 GB and maybe even 64 GB these days. After all, memory is cheap (unless you buy it from Apple).

So – mobile devices aren’t providing the stellar sales and returns we all hoped for. How about televisions?

There’s no question that shipments and sales of 1080p TVs are in a slow decline, and have been for a few years. Practically speaking; if you bought a big (46” and larger) “smart” Full HD LCD TV in the past five years, you already have fast Wi-Fi connectivity, Netflix and possibly Amazon streaming, and three or four HDMI inputs – most of which you’re probably not using, if you stream video.

So why would you shell out money for a new Full HDTV? You wouldn’t, except that you can now buy a much larger screen for the money. But that’s not what’s happening – people are opting to move up to Ultra HD resolution, as the prices for these sets have just about reached parity with same-size Full HDTVs. And not surprisingly, Ultra HDTV sales have been strong and are growing by double digits each year. Still a small portion of overall TV shipments, but essential to the bottom line of Samsung (37% UHDTV market share through June 2015), LG (17% share), and Sony (10% share).

What’s new this year is a stronger presence from China Inc. brands, notably TCL and Hisense. The former acquired the Sanyo brand and factory from Panasonic, while the latter now owns Sharp’s US TV business and a former assembly plant in Mexico.

Excepting Ultra HDTV, it’s very difficult to make any money in the TV biz these days. What we’re seeing is more manufacturing and display panel sourcing from China, as the quality of LCD panels for TVs made at BOE, CSOT, Hisense, and TCL is very good. (And they’re cranking out Ultra HD panels, too.)

2016 will be the year that OLED TV technology finally goes mainstream. LG has placed some big bets on their white OLED / RGBW process and is also selling OLED panels to five of the largest Chinese TV manufacturers. Prices continue to fall stateside; LG just announced a Super Bowl promotion through February 13 that will snag you a 55-inch Full HD curved set for $1,999 and a flat or curved 55-inch Ultra HD model for $2,999.

OLEDs are already in wide use in smartphones and tablets (both my Samsung tablet and smartphone use them) and we’re seeing them in smart watches, too. LG Display’s demonstrations of super-curved, warped, and roll-up OLED displays at CES shows the promise of this technology for mobile displays, particularly in transportation applications.

For displays, we can expect more of the same in 2016 – ever-larger TV s at lower prices as retailers try to stir up sales of hat has become a disposable commodity. You can buy a 50-inch Hisense Full HD set now for $399, amazingly, and 42-inch TVs are getting ever close to the $200 price barrier.

So what’s going to change? It will take a while, but the 60 GHz wireless technology demos I saw in Las Vegas are very promising. Imagine streaming Ultra HD content with high dynamic range from your Ultra HD Blu-ray player to your 65-inch 4K OLED without cables. Or showing video clips from your phone or tablet the same way.

Better yet, how about downloading an HD movie before you travel in just 5 to 10 seconds? It’s possible with the new 60 GHz 802.11ad protocol, as demonstrated by Qualcomm with a bumper crop of tri-band (2.4/5/60 GHz) modems at CES, and a suitably-equipped phone or tablet. This one’s a game-changer, but I don’t think you’ll see many products with this feature until a year from now. Peraso’s aftermarket 60 GHz USB wireless links might help, as they can retrofit to any laptop or desktop computer.

The other category you’ll want to keep your eye on is the Internet of Things. It seems like every gadget has an IP address and can be controlled by an app. Through in Wi-Fi, and you have home security systems you can install yourself for about $250 bucks. Or wireless doorbell cameras, or LED bulbs that double as cameras and motion detectors. (And even alarms that monitor your alarms.)

This continual downward pricing pressure (again, led by Chinese manufacturing) will shift profitability away from hardware to software. Verizon Wireless, the last company to abandon annual service contracts, doesn’t really care what you send on your phone. They just want that recurring monthly revenue stream that you generate. (Notice how nobody charges for voice calling and texting anymore, just blocks of data? The increasing use of Wi-Fi for smartphone connectivity has a lot to do with it.)

I’ve said it before, and I’ll say it again: “Hardware is cheap, and anyone can make it.” Software and services are where the growth lies as we enter the second half of this decade, and you’ll see just how low prices will fall a year from now when you can buy a fully-featured smartphone for $300, you’ll be able to score a 65-inch Ultra HD “smart” TV with HDR and WCG support for $800, and a 4K “action” camera will cost less than $150.

May you live in interesting times!

Posted by Pete Putman, January 28, 2016 10:21 AM

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About Pete Putman

Peter Putman is the president of ROAM Consulting L.L.C. His company provides training, marketing communications, and product testing/development services to manufacturers, dealers, and end-users of displays, display interfaces, and related products.

Pete edits and publishes HDTVexpert.com, a Web blog focused on digital TV, HDTV, and display technologies. He is also a columnist for Pro AV magazine, the leading trade publication for commercial AV systems integrators.