The Six Five team discusses CES 2024 ruminations.
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Transcript:
Daniel Newman: CES, what caught your attention?
Patrick Moorhead: So folks, this is going to be kind of a ruminations. We’re going to give you exactly, what did we see? So I think the biggest thing that I saw was this increase in interest for PCs like I haven’t seen in probably five or six years. And I want to separate that from the reality when the business was just hitting big time about three years ago during the shutdowns. But this is about something brand new and it’s about the AI PC and Intel and AMD. And for a little bit, NVIDIA gave effort at CES on this topic. Not a whole lot of stuff from Qualcomm because they had their event in Maui where they came out with a lot of the content. But that was the biggest source of industry discussion for me.
It’s funny, after the day, you walk by a bar in the Palazzo and you see people from Intel, AMD, Qualcomm, Lenovo, maybe some HP and Microsoft folks in there, maybe some Dell folks. But all in there, the talk was all about AI PC. I did a panel Intel, and I had the presidents of Dell, Lenovo and HP on there to discuss this. But macro, it was good to see the industry coming together to be able to invest in this. And the way to look at the AI PC is, don’t just start off from what you see now. Now is the start. You have core ultra. Even AMD had a release and has systems on the shelf that has a lot of AI capabilities. This is the beginning and not the end.
I can relatively, with high precision, talk about what this will look about now till 2025. But the TLDR is, six-month increments you’re going to see new chips, new capabilities, new software and new experiences hitting here, and I think probably crescendoing in the second half of 2025. But I do believe that we are going to see a resurgence in the PC market in likely the second half and fourth quarter, based on all the excitement about it that quite frankly started today. And you’re going to see a big surge in May and June. You’re going to see a big surge in October and September for the holiday selling season. So I would say, yeah, first and foremost, Dan, I’ll just pong it over to you. I have a few other topics we can talk about, but what were your thoughts?
Daniel Newman: Yeah, I’ve said this a lot now, Pat, but I feel like what we saw was this kind of and inflection. Last year, you quoted me so well, but the year of the GPU, it was the training year, it was the infrastructure investment and deployment. It was a ton of infrastructure on AI being bought by a small number of companies in order to deploy solutions that ultimately could be monetized. Of course, coolest device. I was on Liz Claman, and I said, “What is the coolest thing I saw?” I think it’s these LG or Samsung, I can’t remember which one’s making it, but it’s these transparent TVs. They’re going in the sensors, and the chips are right in the glass and they’re basically completely opaque, or clear. Which one’s clear? Not opaque. And you cannot see the sensors at all in the windows, but you can actually see the content everywhere. I just see so many applications for that in glass. And I think it was just cool. Remember when CES used to be about cool, just seeing things that were just different?
Patrick Moorhead: Well, there was part of that, as you talked about, right? Like see-through OLED, right?
Daniel Newman: Yeah, that’s what I’m talking about.
Patrick Moorhead: No, no, no. I know. That’s exactly what you were talking about. And even the Lenovo, I don’t know if you saw that, they’ve got a detachable where it turns into, you take the display off the PC and it converts from a Windows PC to a Chrome tablet, or sorry, an Android tablet. Just stuff like that that’s visually appealing.
Daniel Newman: Yeah, absolutely. So beyond that, I think, Pat, you and I came into this knowing what was going to be pretty hot in our space. There were some really cool sort of latency free personal assistant type devices powered by generative AI. And that stuff’s really cool. I mean, when you have an assistant, some of them roll around with you, some of them are more like theoretically in your pocket, everything from your personal trainer, a dietician, nutritionist. Intel showed a cool demonstration for people that are deaf and are hearing impaired to be able to get more communication through generative AI. And that stuff’s really great.
And of course, there’s going to be this debate about cloud or prem, what’s going to happen in the cloud, what’s going to happen on-prem? And when I say on-prem, in this case, it’s on the device, right? Because hearing a ton about this AI PC. And Pat, we knew AI PC was going to be a super hot topic. I’m going to put a little stress back on the OEMs and say, look, I have no doubt, and I agree with Pat, I agree with your notion on stage, you did the Intel event, you had all the chiefs of the biggest OEMs in the world, did a great job. You would’ve made Mr. Rogers proud with that presentation. But the communication of where value is going to be derived in this AI PC still has some work to do.
Patrick Moorhead: That’s why it’s the beginning, not the end.
Daniel Newman: It’s the beginning. And it’s the beginning because there are those that really do think that with the right silicon design, a lot can be done in the cloud with low latency. And of course, with these robot tools, nobody wants to wait. So if you can do zero latency or near zero latency, and I call it near zero is when you don’t see latency. So when you don’t feel latency, in my opinion, there’s no latency. It’s kind of like how high resolution can a monitor be before your eyes can no longer appreciate the higher resolution? There’s a little bit of that going on. But I do think the push to new experiences, new designs, new software, new applications that are going to be powered by not only an NPU, but just the whole chiplet and multi-semiconductor designs that incorporate camera technologies and vision technologies and GPU and rendering, et cetera. So there’s a ton of that going on, Pat.
And of course, I’ll just make a really quick pass. Automotive’s always cool, but I think it was just more software defined vehicles, more sort of stacking of moving from more blackbox to custom building blocks. But that’s what we’ve seen Qualcomm doing. Intel’s getting their hat back in the ring. NVIDIA’s, I think, been half paying attention to automotive. They kind of slowed their attention to it when the GPU took off. They didn’t really, the automotive people would be offended by that, but it felt that way. So anyways, I digress. Big topic. We could ramble on for quite a long time.
Patrick Moorhead: Listen, Dan, we’re not rushing this one because I’ve got a couple more topics I wanted to hit.
Daniel Newman: All right, let me kick it back to you because I kind of just gave you the whole rundown, and maybe see if you spark any more memories of things to come.
Patrick Moorhead: Yeah, so CES became the Detroit Auto Show about a decade ago, kind of coincidental, when NVIDIA started talking about what it could do inside the car. Actually, it was 12 years ago. And I remember it really well. And everybody’s like, “Well what is this? The auto show?” Well, this year was again about the auto show, an entire building dedicated to automotive. Funny, tractors, we saw John Deere was back again.
And what it did there, and a couple big statements there. So Intel is back in automotive after spinning out, doing a soft spin of Mobileye, which we’re going to talk about later. And essentially what they did is they committed to compute. And this theory that, by the way, is not new, that we agree with, that we’ve talked about, which is instead of having 25 ECUs that are incompatible that have to talk to each other and have a lot of duplication, centralize that compute. That’s Qualcomm’s strategy as well. And it just makes sense. So with all the new IP that Intel has, that’s a lot more competitive, adding that to the distributed architecture where they can slot in IP from, let’s say, a Ford or a Volvo into the chip and call it a day.
A lot of work and a lot of proof that Intel has to show because the view out there is that Intel got out of automotive and seeded it to Mobileye. Given the troubles that the company was having, it made sense overall. The funny part is that Intel actually kept building and selling products to automotive companies, but just really didn’t talk about it a lot, right? They seeded that conversation to Mobileye. If you want more information on what Intel’s doing, we published a white paper, you can find it in the show notes.
For Qualcomm. It was a reaffirmation that we are becoming the dominant player in this market. And while there wasn’t a lot of huge news, it was more about the momentum. And interestingly enough, I put out something on X, it gets 23,000 people to look at it. So 350 Qualcomm vehicles on the road, in it for 20 years, over 75 models out there. And for them, it was really a time to say, “Hey, we are big and we’re bad. We don’t have huge news to break, but don’t forget how big and bad we are.”
Daniel Newman: All right, are you done on CES or you want to hit a little bit more?
Patrick Moorhead: Maybe just one more, maybe just a final note on this is about XR. So even though Apple says that CES is insignificant, they always drop some of their biggest news. And one of the bigger news stories during that was that Apple Vision Pro will be available on February 2nd. It was literally the only thing that you could see and heard of on a Monday. In addition to that, Qualcomm brought out its new 4K per eye XR2 platform. This is a big deal, folks. 4K per eye is when it gets real, the experience. If you can do that at the right power budget, it gets quite compelling. We’ll talk about Rabbit next time, if we even have to.
Daniel Newman: Yeah, so I did think it was interesting. I did have a bit of a thematic VR is back, XR is back. And look, I said Apple is not always as innovative as people give credit it for. People always say, “They’re so innovative.” They were pretty late with XR. But I think what they do successfully accomplish that so many other companies don’t is they make markets.
Patrick Moorhead: They were 10 years late with smartphones. You’re right.
Daniel Newman: But when they have their smartphone, they timed the inflection point. And so if they’re right, as they’ve historically been, they’re timing the inflection of where we go from very small niche, sort of early adopter use cases, fringe use cases, to high volume. Their pricing doesn’t really enable that. But I think they’re also maybe creating this little bit of what I would call buffer zone for the app developers to create enough apps and usable things so that when they do drop a $1,500 headset at some point in the next two years, scale can come up with it.
Author Information
Daniel is the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise.
From the leading edge of AI to global technology policy, Daniel makes the connections between business, people and tech that are required for companies to benefit most from their technology investments. Daniel is a top 5 globally ranked industry analyst and his ideas are regularly cited or shared in television appearances by CNBC, Bloomberg, Wall Street Journal and hundreds of other sites around the world.
A 7x Best-Selling Author including his most recent book “Human/Machine.” Daniel is also a Forbes and MarketWatch (Dow Jones) contributor.
An MBA and Former Graduate Adjunct Faculty, Daniel is an Austin Texas transplant after 40 years in Chicago. His speaking takes him around the world each year as he shares his vision of the role technology will play in our future.
