CES Day One: Nvidia’s Bombshell
by Brad Moon | January 8, 2013 10:59 am
Monday was the day for big companies at the annual Consumer Electronics Show (CES) to hold press conferences announcing the latest new gear they’re aiming to get you to buy in 2013.
If you were in Las Vegas yesterday, you may well have heard “Where the hell did that come from?” echoing in the streets from Sony (NYSE:SNE), Nintendo (PINK:NTDOY) and Microsoft (NASDAQ:MSFT) execs wondering what hit them after Nvidia (NASDAQ:NVDA) dropped the first bombshell of the conference. It may also have come from the journalists wondering what Samsung designers were thinking when they came up with the stand for the South Korean manufacturer’s new Ultra HDTV, the world’s biggest.
As expected, TVs were front and center. Manufacturers such as Sony, Sharp (PINK:SHCAY) and Panasonic (NASDAQ:PC) all reported steep losses for the year, blamed largely on their TV divisions. Panasonic stock took a 19% dive in October on news of a near $9 billion quarterly loss — one of the largest ever for a Japanese company.
With consumers reluctant to upgrade their current flat-screen TVs combined with downward price pressure, TV makers needed to bring their “A game” to CES in hopes that 2013 will be the year they make the sale.
The primary tricks manufacturers are trotting out are size (the bigger, the better), resolution (the more, the better) and connectivity (the smarter, the better). Previous CES darling 3D is hardly getting mentioned, given the resounding “meh” from consumers, who now expect it as a standard feature.
Here are some highlights of Monday’s press conferences:
- A user replaceable “Smart Evolution Kit” puts the guts of the TV (processor, graphics processor and memory) in a package that plugs in to the back of the TV. This may sound counterintuitive (why let consumers upgrade instead of buying a whole new TV?), but given the typical time between buying new sets, Samsung stands a chance to at least grab $300 or $400 (estimated) in the meantime. That’s better than nothing.
- Samsung one-upped the other Ultra HDTV manufacturers by releasing its S9, the world’s largest 4K set at 85 inches (compared to the previous record of 84 inches). Unfortunately, it chose to make a big deal about hanging that behemoth on a stand that looks to me like an old-school metal playground swing. (S9 image courtesy of ABC News.)
- Panasonic avoided the whole Ultra HDTV thing and stuck with what it does best, plasma and LED, focusing on bigger displays.
- Panasonic’s flagship ZT60 includes a glass panel that’s fused directly to the plasma display to reduce reflection — shades of Apple’s (NASDAQ:AAPL) new iMacs — while incorporating camera-based user recognition (with a customized home screen displaying favorite content), voice control and a Home Shopping Network (NASDAQ:HSN) partnership that makes it easier to buy things directly from the TV.
- Sharp went whole hog with the “big” theme, announcing 21 models over 60 inches, two new Ultra HDTV sets, a split-screen (between Web and TV content), a 90-inch LED TV (the world’s largest) and 32-inch 4K IGZO LED computer monitors with 10-point multitouch. I suppose there might be a professional use for monitors with those specs, but it would have to be awfully specialized and for only those with deep pockets.
- LG is betting big on Google (NASDAQ:GOOG), with seven new Google TV LED sets added to its lineup. Each includes a motion-sensitive “Magic Qwerty” remote that incorporates voice recognition.
- LG also announced a laser projector that can put up a 100-inch, 1080p picture from closer than two feet from the screen.
- Sony expanded it’s UltraHD TV lineup with two smaller (and slightly more affordable models than the 84-inch, $25,000 version released in 2012). But more important, it’s using its studio clout to push “mastered for 4K” Blu-ray movies and a native 4K video distribution service. Clearly, the company recognizes that getting ultra-high-def content out there is key to moving these TVs.
- Sony also went big on near field communication, putting NFC chips in everything from TVs to speaker systems and smartphones. No Sony Wallet yet, but the company thinks NFC is the future for easier hookup of home theater components and communication between entertainment systems and mobile devices.
However, Nvidia has stolen the show so far in terms of bombshell announcements. It introduced a new Tegra 4 mobile processor, a model it claims to be the world’s fastest mobile CPU (a quad-core chip with 72 GPU cores and 4G LTE support), along with a new GRID gaming system. It’s essentially a cloud-based service consisting of rack-mounted servers packed full of GPUs for heavy-duty graphical processing.
All this is interesting enough, and smartphone/tablet manufacturers are expected to start adopting that powerful Tegra processor. The bombshell part was the unveiling of “Project Shield,” a Tegra 4-powered portable gaming system that Nvidia secretly developed. This an Android-powered device with a 5-inch, 720p display, full controller, the ability to play both Android and PC games (via Steam) and HD video output for connecting to a big, flat-screen TV. (Shield image courtesy of Extremetech.com.)
Android games are a bit of a yawner, but the ability to play PC games is a Holy Grail among console makers, and doing so on portable hardware was pretty much inconceivable.
Out of the blue, Nvidia has a completely new player and with the possibility of leveraging a huge catalog of existing games. That’s disruptive.
Pricing and other details are short, but if Nvidia’s Shield has legs, it will make things even tougher for video-game consoles and especially for Sony and Nintendo, which are already fighting casual mobile gaming’s effect on their struggling portable consoles.
After spiking in anticipation of CES reveals, Nvidia’s stock fell nearly 3% Monday on the news, so it would appear that not everyone is convinced the company can pull this off.
Stay tuned for Day Two …
As of this writing, Brad Moon didn’t own any securities mentioned here.
- SNE: http://studio-5.financialcontent.com/investplace/quote?Symbol=SNE
- NTDOY: http://studio-5.financialcontent.com/investplace/quote?Symbol=NTDOY
- MSFT: http://studio-5.financialcontent.com/investplace/quote?Symbol=MSFT
- NVDA: http://studio-5.financialcontent.com/investplace/quote?Symbol=NVDA
- SHCAY: http://studio-5.financialcontent.com/investplace/quote?Symbol=SHCAY
- PC: http://studio-5.financialcontent.com/investplace/quote?Symbol=PC
- all reported steep losses for the year: http://www.eetimes.com/electronics-news/4373507/Will-Japan--Inc--say-Sayonara-to-TV-manufacture-
- Panasonic stock took a 19% dive in October: http://online.wsj.com/article/SB10001424052970204712904578089962887027962.html
- [Image]: http://investorplace.com/wp-content/uploads/2013/01/Moon-Samsung-TV1.png
- AAPL: http://studio-5.financialcontent.com/investplace/quote?Symbol=AAPL
- HSN: http://studio-5.financialcontent.com/investplace/quote?Symbol=HSN
- GOOG: http://studio-5.financialcontent.com/investplace/quote?Symbol=GOOG
- No Sony Wallet yet: http://investorplace.com/2012/09/wheres-the-iphone-5s-iwallet/
- [Image]: http://investorplace.com/wp-content/uploads/2013/01/Moon-Nvidia.png
- fighting casual mobile gaming’s effect: http://slant.investorplace.com/2012/10/video-game-sales-nintendo-erts-znga/
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