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What investors should expect from CES 2021



This week sees the latest iteration of the Consumer Electronics Show (CES), which has historically been the place where new product announcements and high-level speeches showing the product development pipeline for the short to medium term are presented. It’s pretty much an industry that is announcing the latest “new new thing” in the consumer electronics field that ranges from smartphones, TVs, laptops and other connected devices to game consoles and software.

It also means that investors who monitor the president’s accusations in Washington with one eye will use the other for what has usually been a fast and furious CES press release maelstrom.

Over the next few days we will hear from such as AMD (AMD), Intel (INTC), Microsoft (MSFT), Nvidia (NVDA), Samsung (SSNLF), Sony (SNE), GM (GM), T-Mobile (TMUS), and Walmart (WMT) plus Deere (DE) and Kohler. That̵

7;s right, the list includes agricultural equipment company Deere and bathroom, kitchen and lighting company Kohler, which serves to remind us that chips, sensors, monitors and connectivity technologies have capabilities beyond smartphones and the home, as 5G enables industrial Internet of Things (IoT). Data from Statista set the global Internet of Things (IoT) end-user solutions market at around $ 1.6 trillion by 2025, up from $ 212 billion at the end of 2019.

Smartphones

In previous years, CES has seen many new smartphones and TVs announced, with more features and enhancements to display technologies, as well as new laptops and health-related products. This trend will continue this year and is expected to have a larger selection of not only 5G smartphones, but also those with cheaper price tags – a trend we have seen before with 3G and 4G smartphones. Lower prices will lead to 5G smartphone volume, and it will benefit companies like Qualcomm (QCOM), Skyworks (SWKS), and Qorvo (QRVO) as well as other companies further down the food chain as AXT Inc. (AXTI) and Taiwan Semiconductor (TSM).

In addition to 5G, several smartphone models are expected to use organic LEDs (OLED), which provide better battery dynamics given the technology’s emissive nature. Recipients of that shift include Samsung and LG Display as well Universal screen (OLED). We could very well see that new smartphone form factors were announced, especially second generation foldable smartphone models similar to the “clamshell” format that was popular among mobile phones.

With the kickoff main theme on the morning of Tuesday, January 12, Verizon (VZ) Chairman and CEO Hans Vestberg is expected to continue the 5G discussion he started at Apple’s launch event for iPhone 12. During this event, Vestberg talked not only about the improvements with 5G in terms of network speed, bandwidth and latency, but also new services enabled by the technology. One such example was Verizon’s partnership with the NFL to use sensors, cameras and other wireless infrastructure inside and outside stadiums to enable heat mapping to improve foot traffic in public spaces, as well as increase the efficiency of concession kiosks and vendor kiosks. Investors should expect more such comments from Vestberg as well as similar announcements from other mobile operators such as AT&T (T) and T-Mobile in the next few days.

TV

While the notion of what we consider a TV (TV) has changed in recent years, partly thanks to streaming and apps, TVs will again be an eye-catching feature at CES. The trend has been for thinner and brighter display technologies with higher color resolutions. Here, too, OLED technologies have taken hold, but companies are also expected to announce QLED and MicroLED-supported screens as well as 4K and 8K versions. In the past, CES has unveiled extremely advanced TV models (remember Samsung’s $ 100,000 105-inch TV from a few years ago?), But lots of these features tend to happen over time as cheaper models are equipped with these features. And be sure to check out LG’s transparent TV that is part of the 55 ”Transparent OLED Smart Bed concept.

Pair TVs with health and portability

Binding technologies have had an impact on the TV market which has built them with app stores and streaming services. According to the latest market analysis from Technavio, the global smart TV market will grow by 293.32 million units during 2020-2024, with an impressive market growth of 21% CAGR in the forecast period. Following Apple’s announced Fitness + offering that connects and visualizes not only exercise selection but health data on the screen of one’s iPhone, iPad or Apple TV connected TV, exercise – related applications will be a new area to look at this year at CES when it comes to for TVs. Samsung announced a new 2021 TV called Smart Trainer that lets you connect a webcam to your TV so that the Samsung Health app can track your training progress and offer coaching and encouragement. The company also wants to compete with Apple’s Fitness + by connecting Samsung Health-enabled devices to Samsung Smart TVs and smartphones.

In addition to these closed-loop offers, we suspect that there may be connections between other companies to offer competing solutions. Businesses to look at that front include Sony (SNE), LG, Panasonic (6752: JP), and Microsoft (MSFT).

Cars

The connected car, as well as electric vehicles, were hot topics in 2020, and it is planned to continue at CES with the main feature of General Motors CEO Mary Barra. During her Tuesday, January 12, Barra is expected to discuss the EV strategy of GM’s various brands and how the company “lays the foundation for an all-electric future.” During the December 2020 quarter, GM announced that it would invest $ 27 billion in electric cars that would result in 30 new electric cars unveiled over the next five years. Reports suggest that GM will also preview EV concept cars, including a plug-in Chevrolet pickup truck.

In addition to GM, given that the 2020 International North American Auto Show was canceled and will not happen until the end of June this year, it is likely that there will be quite a lot of pent-up news in the automotive industry, be it on the EV front or infotainment and other binding solutions. Several car accessory companies are scheduled to debut heads-up screens and other features for consumers.

Other products

It would not be CES if there were no new announcements about robots, while other announcements will focus on games, artificial intelligence, WiFi and mobile connectivity, cameras, augmented reality and virtual reality. Because CES is a consumer-focused event, we’ll likely see these and other technologies that take advantage of everyday activities such as robotic vacuum cleaners with WiFi and cameras that also act as a mobile security system. And we mentioned the agricultural tractor company Deere above, and it is expected to introduce an AI- and robotics-powered tractor at CES.

From an investor perspective, these technologies will drive incremental chip demand, which bodes well for companies ranging from AMD, Intel, Skyworks, Qualcomm and Nvidia to chip foundries such as Taiwan Semiconductor and semiconductor equipment companies that include Material used (AMAT) and Lam Research (LRCX). It’s just a coincidence that when CES 2021 launched that Samsung announced that it would spend ~ $ 30 billion on semiconductor-related investments in 2021, a huge 30% increase from year to year.

If you’re looking for Apple at CES 2021, do not worry

When it comes to introducing new products and technologies, both investors and companies look to see what Apple (AAPL) can introduce next. Sure understandable, but Apple tends to avoid CES in favor of its own events, and that’s once again the case this year. This does not mean that there will be no Apple-related talk during CES, and given recent reports that Apple may partner with Hyundai for its “Apple Car”, it appears that the CES event is set to continue.

Who will not benefit from CES 2021 this year?

Like many recent events, 2021 CES will be a virtual event, meaning that instead of 2020’s more than 170,000 participants and 4,500 exhibitors by 2020, this year’s program will be virtual and have approximately 2,000 vendors in “virtual” booths. This means hotel occupancy and entertainment expenses at Las Vegas hotels such as MGM Resorts (MGM) and Las Vegas Sands (LVS) will not see the regular January income associated with the annual event.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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