A Telecom Analyst’s Take On CES 2018

A Telecom Analyst’s Take On CES 2018

For most of my career, I’ve been focused on the telecom industry and its components. I’ve been to dozens of telecom-focused conferences & exhibitions, in Asia and the Americas. I had never been to a consumer-focused show, though. In order to learn a bit (and check out some cool new devices), I spent a few days at CES in Las Vegas last week.

It was as chaotic as promised, but also a geek’s paradise. Loads of new tech was shown off in AI, IoT and smart cars. Telcos had a limited presence, but another type of network operator – those building webscale networks – was well represented.

Webscale at CES

Of the biggest companies building webscale networks, most had some sort of CES presence.

As covered widely elsewhere, Google’s Assistant and Amazon’s Alexa were hard to hide from, and overpowered Microsoft Cortana’s limited presence. Apple’s late 2017 decision to postpone the launch of its HomePod (powered by Siri) prevented it from making any kind of CES splash. The absence of Apple in the market, and Cortana’s failure to withstand the competition, left the turf wide open for Google to take on Amazon.

Monorail sponsorship paying off for Google

Chinese providers Baidu and Alibaba were also standouts; both sent impressive speakers and invested heavily in booth space. Baidu’s CES presence had self-driving as the centerpiece. The company formally announced its “Apollo 2.0” platform, in collaboration with 90 partners. Its booth showcased partners’ applications of Apollo in various mobility scenarios, including passenger vehicles, public buses and shared transport services. At the event’s “Mobile Innovation” keynote session, Baidu’s COO Qi Lu expanded on the driving focus, saying the company is “scaling everything around cars”. One positive for vendors: Lu argued that the transition to 5G should accelerate because of advances in AI – and the attendant need for more speed, security, and mobility.

For its part, Alibaba positioned itself well as an industry matchmaker at CES. It sponsored dozens of tiny suppliers in its “sourcing” tent – all of which use the Alibaba platform to serve customers. These suppliers sold every type of electronic under the sun. Some don’t even have products; Alibaba GM Kuo Zhang explained that he encouraged Chinese companies with “incomplete ideas” to come to CES, to meet people. On the buyer side, Alibaba explained in a breakout session how it aims to “de-risk” transactions by providing services like virtual reality factory inspection. That not only drives commerce on Alibaba.com, it also generates lots of traffic for the Alibaba Cloud to manage.

To provide some context, Figure 1 illustrates network-related spending for the top 8 webscale network operators, in 2016. As shown, Baidu & Alibaba are among the smaller companies, but both are growing quickly.

Figure 1