The 3 Most Important Takeaways From CES 2016

By Markets

The Consumer Electronics Show in Las Vegas sets the table for the year in technology, encompassing the raw potential from innovation, major bets from industry titans, and the opportunity to see the future before it happens.

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Sometimes the most-hyped releases fall flat with consumers, but the show generally offers a valuable glimpse into the months ahead as early buzz translates into real dollars. Here are the three biggest takeaways from the show this year.

Fitness wearables are a big play
Fitbit , the biggest player in wearables (by shipment volume), received a rather lackluster response for its advanced fitness tracker, the Blaze, which will retail at just under $200. The device, which looks like a smartwatch -- and a pretty familiar one at that -- is part of what was a hot category at CES.

Fitbit Blaze. Source: Fitbit

But it'snota smartwatch. TheBlaze doesn't check your email; it's not a phone replacement; and it's not an organizer. Instead, it's a hardcore physical fitness tracker that can handle a lot more than fitness. Offering this type of device makes sense, because while people theorize that full-function smartwatches may be the next big thing, the main category where success has been achieved is in the fitness wearables space.

The launch of Blaze may have underwhelmed the industry, but Fitbit was not alone in pushing the category. Under Armour , an emerging player in consumer technology, showed off a $400 fit-tech package that includes a smart scale, a heart-rate tracking fitness band, and a heart-rate chest strap, CNET reported.

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Both companies entered a growing space where fitness trackers move beyond utilitarian looks and into the fashion statements many companies have tried to make with their smartwatches. "The show floor was filled with minimalist devices that looked more like jewelry than fitness trackers," wrote CNET's Dan Graziano and Scott Stein. "The Misfit Ray and Mira Opal, along with last year's Jawbone Up2, don't just look low-key but could live alongside a watch or smartwatch."

Of course, we don't know yet what customer demand for these devices will be. The biggest wearable success has been the entry-level Fitbit, with its rubbery look and minimalist interface, but fancier fitness wearables are clearly something the industry thinks is coming next.

Drones are here to stay
Drones were a big part of the story at CES 2015, but their presence might have been even more pronounced this year after federal regulators have begun to lay out the parameters for how people and businesses can use the technology. Countless companies showed off drones this year, but the real story was what two major players in the space had to say.

Both Alphabet and executives commented on how the government should regulate commercial drone traffic. This technology has the potential to revolutionize delivery and may affect people more broadly over the next few years, given the potential for hobbyists, commercial uses, and even personal travel.

Of course, the two companies have different ideas on how drones should be tracked, as TechCrunch reported.

  • Alphabet essentially wants drones to file a flight plan and then follow it. A centralized system would tell them when they can fly and when they must modify their plans.
  • Amazon doesn't support pre-approved flight plans and instead wants to rely more on in-flight sense-and-avoid technology.

But as much as the two companies seem at odds, both are working with the FAA on the Unmanned Aircraft System Traffic Management project. "The general idea here is to carve out a space of airspace between 200 and 500 feet that would allow for commercial drone usage and to build a system that would allow for managing that traffic," TechCrunch's Frederic Lardinois wrote.

An Amazon drone. Source:

Exactly how quickly the skies will be filled with consumer and commercial drones remains to be seen, but it's clear that something that once seemed like an Amazon pipe dream could become a reality.

This was not a revolutionary year
CES always has its share of cool gadgets inspired by science fiction. Remember the smart fork? How about curved TVs?

There were plenty of those devices in Vegas last week, but the real story is that this was an evolutionary year, not a revolutionary one. Wearables and drones have been in development for some time, as were the other notable stories, virtual reality and home automation. All of these technologies seem closer to realizing their potential, but they are far from new.

"We're in an in-between phase, where categories like drones, virtual reality, and wearables are growing and advancing, but still have a long way to go," wrote MIT Tech Review's Rachel Metz.

The BBC's Dave Lee echoed that sentiment, "[T]he big ideas -- like virtual reality, reinventing the car, or home robotics -- were promising but still half-baked, a bun in the metaphorical (smart) oven," he said. It was also similar to how The New York Times' Farhad Manjoo described CES 2016, calling it an "awkward adolescence" for emerging technologies.

This show may not have revealed the "next big thing", but it told us a lot about where the next big things of years past are headed.

So, where are we going?
After attending CES 2015 and spending many hours learning about the event this year, I think it remains unclear whether wearables will ever be more than a niche product. The niche they currently serve is fitness, but it remains to be seen whether people will pay $200 or more for a fitness tracker.

Similarly, home automation and virtual reality will have their place -- with the high-end housing market and gaming, respectively -- but whether they become everyday, mainstream technology is yet to be seen. Drones, however, are coming, because Amazon and Google have the resources to drive that technology. Their efforts might now show up in 2016 or even 2017, but by 2018, at least some packages will be delivered by drone, and by 2020, it could become commonplace.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fools board of directors. Daniel Kline has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares),, and Under Armour. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.