Market Comment: Tech Trends from Las Vegas

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The Consumer Electronic Show (CES) held every year in Las Vegas is an opportunity for technology companies from around the world to show off their latest innovations. According to Piet Schimmel, ABN AMRO Equity Thematics expert, “the show has become a bellwether of consumer technology trends.”

Schimmel describes this year’s CES, which concluded last week, as a “building” year. “Companies continue to further develop and combine artificial intelligence, sensors and software, much of which had been introduced in previous years.” Schimmel sees two key trends coming from the 2018 Consumer Electronics Show: 
  1. More technology to control the home environment using voice commands, based on hardware and software from big, well-known technology companies, such  as Google, Apple and Amazon. 
  2. Further advances in autonomous cars, which will spur demand for more sophisticated on-board computing. Semiconductor producers and mapping software developers are in focus in these  areas. 

Talking to your house

According to Schimmel, the big technology companies, such as Alphabet (parent of Google), Amazon and Apple are retaining their competitive edge in developing voice-activated technology for the home. “Last year was a game-changer,” he says, “with the introduction of ‘smart speakers’ which combine a wireless speaker, voice commands and an integrated personal assistant.” Schimmel notes that the big platforms continue to innovate in this area, while many smaller firms are developing applications, such as for home security, motion detection and lighting. 
 
He believes, however, that more time is needed before the services of assistants such as Siri (Apple), Bixby (Samsung) and Alexa (Amazon) and Assistant (Google) become welcomed more broadly into family living rooms. It is also, up until now, a consumer segment for the largest technology companies.  “For now, the big IT firms will dominate, as they compete against each other to integrate their virtual assistant – and their platform – more closely into the everyday life of consumers.” 

Robot taxis in 2018

The development of autonomous cars has been years in the making, as a growing number of auto manufacturers and technology companies take on the challenge of developing a car that can drive itself. Schimmel believes that the first real-life application of autonomous driving will be fleets of “robo-taxis.” 
 
He points  to the consumer testing underway in Arizona by Waymo (owned by Google), which is piloting family-use of a fleet of self-driving cars. He also notes that at both the 2018 Winter Olympic Games in South Korea and the 2020 Summer Games in Tokyo, Hyundai and Nissan (respectively) are promising that fleets of self-driving taxis will be available. Hyundai has already bragged about the high-precision mapping software that will enable its vehicles to navigate the curvy roads of Pyeongchang. 
 
“For investors,” says Schimmel, “there are opportunities in the self-driving auto segment related to the semiconductor chips necessary to support the tremendous amount of computing in the car that is necessary for autonomous driving. Much of the decision-making technology needs to be within the car to make split-second decisions.” 
 
He prefers  ASM International, which is a unique player in the semiconductor space.  He also finds companies that supply maps, such as Tom-Tom, interesting. “Highly detailed mapping is essential and there are few suppliers,” says Schimmel. “There is also a high barrier to entry, due to the sizable investment  necessary to map large areas.” 

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