At CES this week, many manufacturers will add virtual assistants from the likes of Microsoft, Amazon and Google to their products, while others will claim they have added “artificial intelligence” to everything from cars to toothbrushes.

We are just not seeing huge swings of growth anywhere

Ben Bajarin, analyst at Creative Strategies

“Artificial intelligence could well be the story of the show,” says John Curran, managing director at consultancy Accenture’s TMT division. AI can “help jump-start some of the other categories that have met resistance in consumer adoption because the devices have been seen as hard to connect and hard to understand”.

Many manufacturers will be hoping to replicate the growing popularity of Amazon’s Echo, a voice-controlled speaker that can play music, turn on lights or hail a taxi.

“We expect an avalanche of smart speakers at CES,” says Ben Wood, analyst at CCS Insight, a tech researcher.

Yet even this promising new category is today far smaller than the hype surrounding it may suggest. In November, Consumer Intelligence Research Partners estimated Amazon had sold just 5m Echo units in the US since its 2014 launch.

Last year, virtual reality was hailed as the breakout hit of CES. Yet this year, VR’s best-known pioneer, Facebook-owned Oculus, will have no stand on the show floor, after what is widely seen as a slow start for the category in 2016.

Analysts at IHS Markit expect consumers spent $1.6bn on VR last year, rising to $7.9bn by 2020. Senior executives at Silicon Valley companies warn that VR may not begin to offer the right consumer experience at an affordable price until 2018.

Yet already, the CES hype machine is alighting on an even more ambitious and expensive kind of headset that can make “holograms” seem to appear in the real world. Augmented-reality goggles such as Microsoft’s Hololens are likely to draw crowds at many of the big chip companies’ booths this week.

Ten years ago, days before Mr Jobs unveiled the iPhone, Microsoft’s Bill Gates showed off a “home of the future” with kitchens, bedrooms and cars all outfitted with ever-larger Windows displays. “Hey, this is pretty neat,” Mr Gates said, as he changed the wall-sized screen of his mocked-up bedroom into a giant aquarium.

The demonstrations of AR and VR at this year’s show may also be neat, but there is little evidence yet to suggest these visions of the future are any more likely to tear consumers’ gaze away from smartphones than the digital aquarium in Mr Gates’ bedroom a decade ago.

“Many people in the industry have learnt the wrong lessons” from the last decade,” says Mr Bajarin. “The bottom line is, these markets just might never be as good as something like the iPhone.”


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