by Brad Moon | January 10, 2014 2:12 pm
This year’s Consumer Electronics Show is winding down. Hardware for the “Best in Show” products at CES 2014 is being handed out. Stores are prepping for customers seeking the many cool new gadgets that were on display (much of it won’t be available for months) and marking down the stuff that just became yesterday’s news.
A few clear trends became evident during the course of CES 2014. The “Internet of Everything” was one — where everything from our cars to our homes and practically anything within — is connected. Wearable tech was also a big theme, with fitness bands, smartwatches, trackers, medical monitors and high-tech glasses everywhere.
Beyond the trends, though, it’s also time to figure out which tech stocks seem likely to come out of this year’s Consumer Electronics Show as winners … and of course, as losers. In other words, which technology companies were able to leverage the CES 2014 platform and the media coverage to get people excited about their products … and which tech stocks are going to have to make up ground?
Here’s our list of five tech stocks that marked the two extremes — clear winners and clear losers — at CES 2014.
Sony (SNE) seemed locked in a downward spiral only a few years ago, repeatedly posting multi-billion dollar quarterly losses. Its TV business became an anchor and the cachet of its other products lost their shine to new consumer electronics giants like Apple (AAPL) and Samsung (SSNLF).
But under new CEO Kazuo Hirai, SNE has appeared to post a turnaround that’s rare for tech stocks. It turned its first profit in five years, its smartphone sales began to pick up and its Playstation 4 game console was a holiday hit.
Sony has some of its swagger back and, at CES 2014, the company was one of the tech stocks on the offensive instead of on the ropes. SNE announced the Playstation Now streaming video game service that brings the massive catalog of older Playstation games to the PS4 — and potentially to other devices as well.
Plus, its 4K TV offerings were well-received and, if they lacked the grandiose appearance of rival Samsung’s massive sets, Sony positioned itself in the sweet spot as a premium but still affordable brand. SNE also showed off a virtual reality headset that it plans to pair with the PS4, impressed with the new Xperia Z1 Compact
smartphone and showed off a new bracelet fitness tracker.
If 2013 was Sony’s turnaround year, CES 2014 showed a company returning to form. People are excited about SNE and that bodes well for 2014.
Questions arose about Samsung (SSNLF) — the seemingly unstoppable South Korean company — last year. As predictions began to rise that we’d reached “peak smartphone” or at least peak flagship smartphone, Samsung (which derives over 70% of its profits from its mobile division) seemed like one of the tech stocks particularly at risk.
But at CES 2014, the company was everywhere, reminding people that it’s about a lot more than the Samsung Galaxy S4. Its 4K TV displays may have been over-the-top, but the 105-inch, curved Ultra HDTV monster it was showing off was probably the most photographed object at the show.
Samsung also announced a Smart Home platform that leverages its mobile dominance along with its presence throughout the home with appliances, PCs, TVs, cameras and other devices … making a convincing play for centralizing home automation.
Plus, SSNLF is coming hard at Apple (AAPL), Amazon (AMZN), Goole (GOOG) and other tablet leaders with supersized, 12-inch Galaxy tablets for the education, business and prosumer markets. It also showed off compelling PC hardware, including a slick aluminum-clad ATIV 9 Book Ultrabook and a futuristic-looking Windows 8 ATIV One7 all-in-one PC.
For the cherry on top, Samsung spoke to the press about the Galaxy Gear smartwatch disappointment (there’s a new version coming in 2014) and talked about the new Galaxy S5. Samsung says it will address complaints about the use of cheap-feeling plastics.
In short, Samsung was one of the poster tech stocks for all the cool stuff at CES 2014, it showed that it’s about a lot more than just a smartphone and it managed to do a decent job of setting expectations for making its current smartwatch and flagship smartphone better.
Intel (INTC) went into CES 2014 as an underdog in the mobile space. Many people considered INTC a dinosaur among tech stocks — one that had become so fixated on the PC that it missed smartphones and tablets altogether and was attempting a seemingly impossible comeback against ARM (ARMH) mobile processors.
But INTC and new CEO Brian Krzanich came to the Consumer Electronics Show with a plan to show that Intel was leapfrogging beyond the whole mobile thing to become central to the next big waves: wearable technology and the Internet of Everything.
With the remarkable Edison memory card-sized PC, a slew of proof-of-concept gadgets (including connected baby monitors, coffee cups and its own smartwatch) and a contest to drive development of new wearables, Intel did a good job of convincing CES 2014 attendees that it things all figured out and has positioned itself as a driver of the trends.
It still displayed PC technology, but made the point that understand the future of tech stocks by announcing its PC processors can now run Android … and switch between Windows and Android at the push of a button.
Microsoft (MSFT) used to be synonymous with the Consumer Electronics Show. The company provided the opening keynote for 12 years straight, before dropping out last year (well sort of — Steve Ballmer did spend a lot of time on stage last year). And this year, MSFT didn’t even have a booth. The argument can be made that the Windows logo was everywhere at CES 2014, making Microsoft’s presence felt anyway, but …
The company had a really bad year in 2013, then managed some positives towards the end of the year it could have showcased and leveraged. Windows 8.1 is an improvement over Windows 8, the new Surface tablets are selling better than the old and the Xbox One did pretty well over the holidays.
Instead, Microsoft let other tech stocks steal the spotlight. It let Sony (SNE) tell everyone that the PS4 outsold the Xbox One, then announce the Playstation Now game streaming service that instantly gives PS4 owners a huge back catalog of games. With no Xbox presence at CES 2014, Microsoft essentially ceded the points to Sony and let the Playstation 4 gain serious cred in the public eye.
Intel’s move to dual-booting CPUs at CES 2014 also hurt Microsoft in a big way, offering an easy way onto the corporate desktop for Android. This is a first step that could hurt Windows sales and definitely eat into Office sales. Worse, LG trotted out a desktop PC that runs Android exclusively (using free apps that offer Office compatibility) — no revenue at all for MSFT there.
Even though it wasn’t at CES 2014, Microsoft was one of the tech stocks that came out as a loser — a company that failed to push the products that might help it to regain momentum, while allowing a dangerous rival to its core businesses have the spotlight, uncontested.
Apple (AAPL) doesn’t do the Consumer Electronics Show. Obviously, that hasn’t hurt it in the past. But AAPL is in a market today full of rival tech stocks and far more competitive for its most profitable products.
Already, Apple is losing market share in smartphones and tablets. And by staying away from CES 2014, it let rival Samsung (SSNLF) look like a tablet leader and show off 12-inch prosumer models. It also let PC makers show off their cutting new industrial designs and mobile integration — without having an iMac, MacBook Air or iPad to show Apple does product design better than most.
Apple used to be the alternative choice for PC users and the BYOD movement helped iPhone users convince IT departments to buy MacBooks. But with Dual boot PCs flipping between Windows and Android everywhere at CES 2014, Android is suddenly looking like a threat to the Mac as well as the iPhone and iPad.
There was no Apple TV to show off against the collection of Android-based media streaming devices, either. And AAPL missed the chance to brag about its iBeacon technology being used to power the CES scavenger hunt. If nothing else, an appearance at CES 2014 would provide a boost to the companies using the Consumer Electronics Show to show off Apple accessories. After all, that healthy market of add-ons made specifically for iPhones and iPads is a significant part of the iOS appeal.
In 2007, Apple Computer changed its name to Apple to reflect the fact that it was now a consumer electronics company. I think it’s time that Apple starts joining other big-name tech stocks at the Consumer Electronics Show. Maybe it will if and when it finally releases that Apple television we keep hearing about.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.
Source URL: http://investorplace.com/2014/01/ces-2014-tech-stocks-aapl-msft/
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