I came back from the Consumer Electronics Show in Las Vegas exhausted and more than a little frustrated. The show has become ridiculously big, and splitting events between the Venetian and the Las Vegas Convention Center required an irritating amount of transportation back and forth. (The monorail rules, but it needs to go to the airport, and around the other side of the Strip.) Maybe next time I should rent a car. More than that, I didn’t spend enough time on the floor of the show; and in my zeal to set up meetings, I didn’t leave enough time to write, the result of which is that I will be trickling out some more interview pieces over the next few days.
Anyway, that is all prelude to a roundup of some of the CES-inspired Street research that has been piling up in my inbox. Since I couldn’t be everywhere, I’ll consider them all my deputies.
- Darren Aftahi, ThinkEquity Partners: It is clear that video has become the focal point of consumer electronics…long term, the Internet will indeed supplant linear broadcast as the distribution channel of choice.
- Thomas Eagan, Oppenheimer: The new products and services announced at this year’s CES conference are more likely to act as a complement than a substitute for cable/satellite subscriptions.
- Tim Luke, Lehman: The show exhibits appear to revisit and develop many of themes for growth from last year’s exhibition (mobile TV, 802.11n, HDTV, navigation) rather than introducing significant new product drivers for the semiconductor industry.
- Jay Srivatsa, Roth Capital: LCD TV, IPTV and Digital Convergence were the three major themes…the trend toward flat panel TV penetration favors IC companies catering to this market. However, it is our view that the market flat panel TV ICs and in particular LCD TV ICs could become more competitive in 2007 than in past years.
- Mark Lipacis, Prudential: Our perception was that the show was slightly less crowded than last year. Themes largely centered around video on handsets, large screen TVs, and more handheld devices for accessing the Internet. We remain Neutral the sector.
- Krishna Shankar, JMP Securities: The dominant semiconductor industry theme at the 2007 CES show was the emergence of software-rich, system-on-a-chip semiconductor products that provide much of the intelligence behind the convergence of content in the PC, TV cell phone and set-top box ecosystem linked by a rapidly evolving broadband Internet connection. In our opinion, the PC will continue to be the entertainment and distribution hub for content around the home, especially with the arrival of the powerful and secure 3-D media oriented windows Vista MSFT operating system. We believe that powerful dual-core and quad-core PC processors and an abundance of memory ill be driving forces behind the Home upgrade cycle.
- Christopher Danely, J.P.Morgan: Most companies stated overall demand appears solid, but there appears to be an inventory build in handsets…we believe downside risk to consensus estimates remains.
- Ryan Hutchinson, W.R. Hambrecht: The trend towards home networking is hastening, driven by the need for new products that converge home computing and traditional media devices into platforms capable of bringing digital and next-generation media across the home…we come away from CES 2007 with the impression that home networking is poised to have a breakout year and would not be surprised if it is even bigger at next year’s CES.
- Britz Pitz and Brian Fitzgerald, Bank of America: The mobile Internet will be a key driver for online businesses looking to grow their international presence and reach among the Y Generation. Although it is still the early innings, mobile content and services could impact both fee-based/subscription and advertising revenues for Google (NASDAQ:GOOG) and Yahoo (YHOO).
- Jesse Tortora, Prudential: Most companies we met with highlighted seasonal demand strength in Q4 and expect normal seasonal declines in Q1. Expectations for an uptick in PC demand for ‘07 due to Vista were low.
- Matthew Kather, W.R. Hambrecht: Digital content is a big underlying theme at CES. The digitization of pictures, music and video continue to drive demand for storage…[but] in looking for additional standalone consumer electronics devices that use greater HDD storage capacity points, we were somewhat disappointed. Specifically, we found no evidence at CES that HD-DVR offerings were slated to move up from 80/160 GB to a 350GB-plus level soon. The HD-DVRs from the satellite providers continue to be stale in terms offering no greater storage for the growing HD content.