The Consumer Electronics Show is the most exciting conference of the year for anyone who wants to know what tech will look like in the next few years. In today's episode of Market Foolery, Chris Hill talks with David Kretzmann from Motley Fool Canada about what he did -- and didn't -- see at this year's CES, and what it all means for the future of consumer tech.
Find out the current state of autonomous vehicles and why it'll probably be a bit longer than you'd hope before self-driving cars are available for purchase, how much of a presence drones had at the conference, what tech most of the biggest companies on the market were focusing on in their presentations, and more.
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A full transcript follows the video.
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This video was recorded on Jan. 16, 2018.
Chris Hill: It's Tuesday, Jan. 16. Welcome to Market Foolery! I'm Chris Hill. Joining me in studio, from Motley Fool Canada, David Kretzmann. Back from CES.
David Kretzmann: Made it back!
Hill: Before we get into CES, because that's all I want to talk about today, Motley Fool Canada. This is a new role for you. You were with Rule Breakers and Supernova, and we've traded you to another country.
Kretzmann: I've moved up north, all the way from the fourth floor to the fifth floor. That's been an adjustment. I'm still at Fool HQ, but up on the fifth floor now with our global team, specifically focusing on our Canadian members and services there. We're actually working on a new service now, which I think people will be hearing about more in the next week or two.
Kretzmann: A lot of fun stuff. To me, it appealed, joining our global team, a lot of stuff that The Motley Fool is doing, as we increasingly become a global company, trying to spread Foolishness around the world. Great team up there. I'm excited to have that new opportunity.
Hill: Fantastic! Let's talk CES. You spent last week in Las Vegas. You've been to CES before.
Kretzmann: This is my third time, third year in a row.
Hill: It helps when you've been to something that big. The first time, my experience with South by Southwest, which is not as big, in terms of the number of people in all that sort of thing, but, my first time at South by Southwest, I just remember there were times when I was like, "I think I need to go lie down."
Kretzmann: Oh, it's overwhelming, yeah. CES is a similar way. I think this year, there were 175,000 people. It covers over 2 million square feet across the city. You have the convention centers, the hotels. You're scrambling pretty much the whole time. You really just have to come to terms with the fact that you're not going to see everything.
Hill: And you're going to get your steps in.
Kretzmann: Yeah. I was out there with Taylor Muckerman for Motley Fool Canada. We were maybe three-quarters through the day, and we had done 16,000 steps or something like that. It's a good place to get some exercise, and get your cardio, and then see a lot of cool technology as well. This year, it was nice, because we weren't really there doing daily dispatches as much; we weren't just regurgitating stuff that we saw the day off. We really had more time to walk the floor, think, analyze and reflect on what we were seeing and what implications that could have for investors. A good time overall.
Hill: I have to give a plug right off the bat for Industry Focus. On Friday, you're going to be talking to Dylan Lewis for the Industry Focus: Technology episode. Because you covered so much stuff, Dylan and I were essentially able to divide up the topics. Check out Industry Focus this Friday, because David will be talking about stuff that we're not going to cover on today's episode. Let's start with autonomous driving. Where are we now with autonomous driving? It seems like we're closer, but I don't know how much closer.
Kretzmann: That's the ultimate question, and I'm honestly not sure if I know how much closer we are. Certainly, the technology is improving bit by bit. This year, we got a ride in a self-driving Lyft. Last year, we had gotten in a self-driving car, but it was on a pre-mapped course. We went through some streets, some of the Vegas city streets, but it was a pre-mapped course, you knew the route, and I think the car had been programmed with that route in mind. So I don't think there were any left turns with that route. And it was impressive, but still early stages.
This year, we took a self-driving Lyft from the convention center over to Caesars Palace, but it wasn't fully autonomous. You get in expecting -- by law, you're still required to have someone in the driver's seat, just in case you need to switch from autonomous mode to manual mode, and that happened several times through the trip, especially with things like a left turn. The traffic in Vegas is crazy, especially around CES, so you have some aggressive drivers. There were several instances where the driver in the front seat, she needed to take control of the car manually. So, impressive, but still, going through that, I would take the over. If you're staying within the next five years a good chunk of cars will be fully autonomous where you don't need a human in the driver's seat -- I'm thinking that's still five years out, at least.
Hill: Your personal experience aside, were their statements being given by companies? Were there speeches by any of the keynote speakers that gave any insight into their actual plans for autonomous driving? Whether it's as a vendor or creator?
Kretzmann: Yeah. NVIDIA (NASDAQ: NVDA) continues to steal the show at CES. They gave a keynote early on, Sunday night, very early in the whole convention, which really started to gear up on Tuesday. And interestingly enough, through their keynote presentation with founder and CEO Jensen Huang, who last year gave the keynote at CES and I think really stole the show last year, obviously the stock did great, up 80% last year. But in the keynote this year, they only briefly touched on video games at the beginning. Mind you, this is a company that's still making the majority of its revenue from video games. In their keynote presentation, they almost entirely talked about artificial intelligence and autonomous driving, basically citing a $10 trillion opportunity within the transportation industry. And obviously, artificial intelligence is a component of that, and really building the AI autonomous driving platform that powers these vehicles.
Then, at NVIDIA's booth within the convention center, which they host over several days, I didn't see one mention of video games in that booth. It was all AI and all autonomous driving. I remember last year, seeing NVIDIA's booth, and they still had video games essentially front and center. They weren't just brushing over it, but if you were just walking up to the booth, you would not know that NVIDIA was a video game company, or a company that made the majority of their revenue through these processors to power video games. That shows you where NVIDIA's head is at as a company. It seems to have its hands in a lot of these different emerging trends these days, whether it's self-driving cars, video games and esports, artificial intelligence, big data. NVIDIA is really trying to become the platform that powers these vehicles. I think that's a compelling way for investors to benefit from it. That way, you're a little bit more agnostic as to which automaker actually comes out ahead.
But you do have competition in that space. You have Intel still very much trying to do that. Tesla (NASDAQ: TSLA) has forged its own path. I think right now, it's hard to say where we are with self-driving cars, and how far off it is where the majority of cars or a good chunk of cars on the road will be fully autonomous. Last year, Elon Musk had said that by the end of 2017, there would be a fully autonomous Tesla that drives from the East Coast to the West Coast, from New York to San Francisco or L.A. That didn't happen. And he tweeted several weeks ago saying, "If we don't do it by the end of 2017, it'll be early 2018." But seeing some of the demos...
That's kind of the Elon Musk trademark. "Yeah, it'll happen, maybe just a few months more." But seeing some of the demos, which are incredibly impressive, and I don't want to downplay the technology at all, because it's incredible what these cars can do, it makes me think it's a little further out than a lot of people might be hoping, certainly for a mass-market outside of Silicon Valley.
Hill: I'm not a Tesla shareholder. I'm rooting for the ideas that Elon Musk has been backing for so long. But I sort of feel like, at this point, I feel like we've reached the point where Tesla's motto is moving the goalposts. It's like, "Tesla: moving the goalpost since 2011."
Kretzmann: Yeah, I think if you're a Tesla shareholder or prospective shareholder, you just assume, when they have a target date, push it back a few months or a year, and that'll be a little more realistic.
Hill: I want to get to the voice stuff in a second, but really quick, any update on drones? Was there a big presence there? When you and I were going back and forth, you were in West Coast -- no, you were in Vegas. You've done some traveling in between, so that's where my confusion comes from.
Kretzmann: I've been all over the place.
Hill: You have been all over the place. We were going back and forth on Slack, some of your early takeaways, and one of them was that 3D printing was almost nonexistent. What was the presence like for drones?
Kretzmann: For drones, there was a surprising amount of companies showcasing drones. To me, almost identical to the past couple of years. To me, that's surprising because, I feel like the drone market hasn't become any more mainstream. You still have people who enjoy using drones as a hobbyist, or you have photographers or people capturing video with drones. That's still a niche market. I think there are some industrial applications as well, if you're trying to survey a farm or an industrial site or whatever it might be.
But I was surprised that drones were still as prominent as they've been the last couple of years and still took up a good chunk of the convention space where they were at. There was something that was really cool, which is an underwater drone, which I didn't even know existed. This is basically a drone that can go underwater. I don't know if it's technically a drone, but it's basically a device that can go underwater and do some cool things. It seems really unfair for the fish, if you're fishing and you have a camera and you can basically go wherever the fish are and plunk your reel there. That seems like an unfair advantage for the fisherman.
Anyway, I'm not sure what takeaways I have for drones. But to me, it seems like something, I'm not sure if it's sustainable. You just saw GoPro, just several days before CES, they announced that they're shutting off their Karma drone division, they're laying off more people. Obviously, a lot of other issues going on at GoPro. But even GoPro still had a big booth, and they were still showcasing the Karma drone, which was a little bit of a head-scratcher to me. I didn't know if they're just in denial, that they'd just laid off a lot of people and shut down the drone division.
Hill: Someone didn't get the memo.
Kretzmann: Yeah. So anyway, drones are still very prominent. But as an investor, I'm not any more excited.
Hill: Google had a big presence at CES this year, according to pretty much every report I saw. Among other things, they were highlighting their home assistant. It seems like there was an even bigger presence for voice activation.
Kretzmann: Yeah. I would say, if there was one big overarching theme that wasn't so present last year, it's definitely voice. You have every big tech company from Google to Samsung to Baidu to Alibaba, obviously Amazon -- all of them were showcasing their voice assistants. And a lot of device makers, on the other hand, were showcasing that they're compatible or integrated with all these voice assistants. So it was a big theme all around. Google had taken out a bunch of ad space on the Las Vegas Monorail, different hotels, and all over the convention space.
The Google Assistant was very prominent. I think that's an interesting space to watch, because there were also a lot of robotics at CES. I can see where, you see a convergence of these voice assistants, and as these robot and physical assistants become more capable of what they can do within the home, I think a combination of those two things and you're really getting to the E.T. AI future that we all either know and love and are excited about, or are really fearful about, either way.
Hill: We're terrified by. Let's talk about what I like to call the day CES died, which is the two-hour blackout that occurred at the convention center. There's something wonderfully delicious about that. [laughs] I say that as someone who was not there. I'm sure for some people who were there, it was scary. Where were you? And for those who didn't hear, there was a blackout at the convention center for a couple of hours one afternoon. Where were you when this happened?
Kretzmann: This was late Wednesday morning, early afternoon on Wednesday. I was at the Westgate Hotel, so we were on the other side of town within the hotels, which weren't affected by the blackouts. Over the course of Monday and Tuesday, there were record amounts of rain in Las Vegas. There was about an inch and a half of rain within the span of those 36 hours or so. This is for a city that hadn't had any rain for 116 days. Their annual average rainfall is anywhere between 2 to 4 inches.
Hill: I was going to say, for most cities, that's a lot of rain in 36 hours. If you're a city that's not even remotely used to getting rain, that's scary.
Kretzmann: Yeah, it became apparent pretty quickly that Vegas is not a city built for that amount of rain. There were leaking roofs everywhere, whether in the hotel, walking through the convention center, you would be walking around and feel a drop of water coming from the ceiling. And going around the convention floor, there were just buckets that were collecting the water. So you're looking at this 8K TV, and just a few feet away you have a bucket collecting raindrops.
Hill: Low-tech solution.
Kretzmann: The blurring of the lines between low-tech and high-tech. There was something very beautifully ironic about that. So I wasn't actually at the convention center for the blackouts, but that record amount of rainfall really did a number on the city.
Hill: What was the craziest thing you saw, the weirdest thing? For folks who haven't been listening to Market Foolery for very long, if you could remind people of last year's crazy highlight from CES?
Kretzmann: Last year was Edwin the Smart Duck, which was essentially a Bluetooth speaker within a rubber ducky. You can have it in the tub with you or wherever it might be, and you essentially can speak to it. It might play some tunes, play a podcast.
Hill: Why not?
Kretzmann: There's something so wonderful about a rubber ducky that can talk to you.
Hill: Did Edwin make a returning appearance?
Kretzmann: I didn't see Edwin. That was a letdown. I might have to google to see. Hopefully the company behind it is still around, because that's a product I think the world needs.
Hill: What did you see this year that made you do a double-take?
Kretzmann: There was a lot of cool stuff within robotics. I think with robotics, there was some stuff that was so delightful. And on the other end of the spectrum, there's stuff that you really wish would work, but the technology isn't quite there. On the latter end of the spectrum, there was stuff that I would love as a consumer, but the technology still has some work to do, is a laundry-folding robot. That's just something that's like, man, if that could be an automated element of my life, that would be fantastic. I'm not going to complain with that. The product itself, I think it was about $16,000 --
Hill: Woah! [laughs]
Kretzmann: Yeah, and it's a closet that very slowly, and in not such an impressive way, folds the laundry. But I could see, maybe three or five years down the road, maybe you get to the point where you don't need a $10,000-plus closet. Maybe it can just go in the laundry room and fold up your laundry for you.
Then, on the other end of the spectrum, there was a robot that plays Ping-Pong with you. I talked to a woman who works for the company. They were showcasing a lot of different aspects of what robotics can do. She was explaining that the robot isn't built to demolish any human competition; it's actually there to help you improve as a player. So you can set the robot on different settings as a way to perfect your game by playing with a robot. To me, that opened my mind to different possibilities of robotics within the home or improving performance in general. It was just impressive seeing a robot -- it was a big setup over the table, and you saw the paddle move independently and automatically as it would play against a human player. So, kind of a cool application. Not immediately relevant to a lot of people, but I think you could see that sort of robotic, performance-enhancing tasks more and more in the years ahead.
Hill: Does the robot have the ability to go get the Ping-Pong ball when it goes past the robot? Is the robot able to pick it up off the floor, or do I have to do it?
Kretzmann: That's still a human task, unfortunately.
Hill: OK. I like this idea, and my first thought when you started talking about it was, "I wonder what this costs," because I could absolutely see this being something that at least a few of our colleagues make the case, "We need one of these at Fool HQ!"
Kretzmann: Certainly. I think you'll see more of that. Within robotics, the actual home robot assistants still need a lot of work. You need specialized robots for vacuuming with the Roomba; you have some lawn mower robots. But I think we're still a ways away from having a general personal robotic assistant that can do a variety of tasks and do them well. But, up to this point, still need those specialty niche robots. But pretty cool to see that technology. Still a few years off for a lot of these technologies or trends, but just getting a sense of where the world might be headed and what companies might be driving it, always a lot of fun.
Hill: David Kretzmann, thanks so much for being here!
Kretzmann: Thank you!
Hill: As always, people on the program may have interests in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. That's going to do it for this edition of Market Foolery. The show is mixed by Dan Boyd. I'm Chris Hill. Thanks for listening! We'll see you tomorrow!
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Chris Hill owns shares of Amazon. David Kretzmann owns shares of Amazon, Baidu, GoPro, NVIDIA, and Tesla. The Motley Fool owns shares of and recommends Amazon, Baidu, GoPro, NVIDIA, and Tesla. The Motley Fool recommends Intel. The Motley Fool has a disclosure policy.
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