The CES show symbolically kicks off the new year for tech, providing a blueprint of what to expect over the next 12 months and beyond.
The 2023 event, however, can be defined by what happened in the months leading up to it: a series of layoffs, hiring freezes, real estate consolidation and twisting of hands in Silicon Valley and beyond. Oh, and the threat of an antitrust vote (or two) at the time of the conference, which runs Jan. 5-8 in Las Vegas.
With the annual extravaganza less than a month away, CES organizers have set a goal of 100,000 attendees, up from 44,000 a year ago, and they’re planning 2.1 million net square feet of space at the ground, against 1.3 million last year. [Prepandemic, show attendance was in the range of 150,000 to 182,000.]
Confirmed participating companies include: Facebook parent company Meta Platforms Inc. META,
Advanced Micro Devices Inc.
AMD,
Intel Corp. INTC,
General Motors Co.
GM,
Microsoft Corp. MSFT,
Amazon.com Inc. AMZN,
Alphabet Inc.’s GOOGL,
GOOG,
Google with a large outdoor facility, Qualcomm Inc.
QCOM,
Samsung Electronics Co.Ltd. 005930,
Verizon Communications Inc. VZ,
Nvidia Corp. NVDA,
Cisco Systems Inc. CSCO,
Adobe Inc. ADBE,
Delta Air Lines Inc. DAL,
TikTok and Roku Inc. of the Year
“Big companies want the physical connection. They want deeper discussions over coffee or a meal. They’re looking for serendipity,” Gary Shapiro, chief executive of the Consumer Technology Association, which leads CES, told MarketWatch.
“It’s a good place to start the year because many of our customers, like LG Electronics 066570,
AMD and BMW are there,” said Walt Hearn, vice president of global sales and customer excellence at Ansys Inc. ANSS,
a simulation engineering company with a market cap of $21 billion. Hearn has made a point of attending CES every year, even during the pandemic.
What brings Hearn and others to CES is a glimpse of the immediate future – in this case, around the themes of the metaverse, sustainability, digital health, electric vehicles and autonomous vehicles.
The Metaverse offers the most tantalizing possibilities – Meta, Apple, Microsoft and nearly every other tech company all have designs on the market – although it has been fraught with challenges as the technology is expensive and the experience difficult to explain.
“If you ask five people about the metaverse, you get six definitions,” Todd Richmond, analyst at the IEEE Association of Professional Engineers, told MarketWatch. “It’s a platform for the means to communicate, but what changes are the on-ramps. I was at CES in 2016 and we were talking about this being the breakthrough year for virtual reality. [virtual reality]. This was not the case. Will 2023 be that year? Probably not.”
Still, global spending on augmented reality and virtual reality is expected to hit $13.8 billion this year and $50.9 billion by 2026, according to market researcher IDC.
The year or years that Tech lived dangerously?
Layoffs, CEO layoffs, and impending antitrust legislation could make 2023 one of the most unpredictable and dangerous years for tech. Historians trace back to the internet implosion of the early 2000s for a comparable expanse of chaos and uncertainty.
“We’ve moved from being overstaffed and growing at all costs to a mindset where conserving cash is king,” said Andy Stinnes, general partner at venture capital firm Cloud Apps Capital Partners, at MarketWatch. “We have come out of this crazy cycle and are now moving to caution for next year at 18 months. Funds are sitting on dry powder, with public markets down 50% and IPOs dead.
“We’re in a new cycle, just like we were in 2000 and 2008,” Stinnes added. “It’s the right time to invest [that] are investor-friendly, not founder-friendly. We basically sat in 2021. Now we are active.
Silicon Valley is currently in turmoil over the precarious status of Twitter Inc. under its inflammable new leader, Elon Musk. Meanwhile, Meta is cutting 11,000 jobs as its grandiose plans for the Metaverse appear to be at least a year or two away. HP Inc. HPQ,
Cisco and DoorDash Inc. DASH,
are also among the tech players cutting thousands of jobs. The CEO tenures of Andy Jassy of Amazon.com Inc. and Enrique Lores of HP look shaky after Walt Disney Co. DIS,
dumped Bob Chapek just two years after being promoted to the company’s top spot, and Salesforce Inc. CRM,
co-CEO Bret Taylor is leaving us after just over a year in the role. And the acceleration of layoffs and real estate consolidations at Meta and HP has reignited tensions between employees who want to continue working from home and employers who want them to be on site.
It’s hard to gauge the influence of CES — or any other tech show, for that matter — at a time when COVID is still a threat and the economy is unpredictable, according to executives planning to attend on next month.
While some may question the need for old-fashioned face time in Las Vegas in an age of Zoom meetings and streaming seminars, the four-day gathering is still generating excitement among international businesses at seeking US exposure, extensive media coverage and deals.
“It’s a time of great change,” Cullen Jennings, chief technology officer for security and collaboration at Cisco, who last attended CES in 2020, told MarketWatch. Cisco plans to show Webex Hologram with Magic Leap 2 headsets.
“It’s always helpful to see products showcased in person,” Jennings said. “It takes a lot of time and energy to attend a trade show, especially one as big as CES. The principle of working from home also applies to trade shows: there are certain things people can do at distance or in person.
The legislative front offers no relief, despite the Republicans’ victory in the House in the midterm elections. While Democrats maintain control of the Senate, White House officials insist antitrust legislation to rein in Apple, Google and Amazon remains a priority during the lame session.
“We are very committed to passing ambitious technology antitrust legislation,” White House press secretary Karine Jean-Pierre said during a press briefing. in November. There’s “no reason Congress can’t act before the end of the year,” she said.
The Federal Trade Commission also continues to ratchet up the pressure on mega-tech acquisitions. Last month, Politico reported that the agency was likely to file an antitrust lawsuit to block Activision Blizzard Inc.’s $69 billion ATVI from Microsoft Corp.,
The FTC, under Chairman Lina Khan, is locked in a legal skirmish to block Meta’s purchase of virtual reality fitness startup Within.
A court date in that case is scheduled for this month in San Jose, Calif.
Perhaps no one knows the highs and lows of the annual Las Vegas tech show better than Tim Bajarin, president of Creative Strategies Inc. The consultant and technology analyst attended 47 variations of the January show, dating back to 1975. He will be in Vegas next month.
“The show is realistic about the tough times ahead, but it’s always forward-looking,” Bajarin told MarketWatch. “Yes, technology is facing a tough few years, but history has shown that it does eventually bounce back, and businesses need to be ready for now.
“I expect the show to always be upbeat and impatient, even knowing that the next few years in tech will be tough,” he added. “It’s its optimistic outlook that makes this show interesting even in bad times.”
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