03 Oct IFA 2019 Analysis: Huawei Strikes Out, Qualcomm And Roku Hit Home Runs
This year’s IFA technology trade show extravaganza, conducted once again in Berlin’s spacious Messe Berlin fairgrounds (26 exhibit halls covering 1.7 million square feet), was undoubtedly the place to be for anyone wanting to learn more about where consumer electronics technology is headed. With over 245,000 visitors, more than 1,800 exhibitors, 2,300 keynote attendees, 1.5 million meetings held and more than 6,000 media and analyst attendees, the event redefined the word “big.” Over the 5 days that I attended, I logged more than 65,000 steps and saw several very interesting (as well as some not so earth-shattering) product demos. Overall the event was a very good barometer for where tech is headed over the coming year.
With that as a backdrop, here’s my top takeaways from this year’s IFA event. Beyond the technology news, this year’s event had some additional intrigue to it that I believe deserves some attention.
Keynotes at highly visible trade show events like IFA represent a marvelous opportunity for a company to introduce a new product or solution, or provide its unique perspective on a topical, or even controversial, issue. The disclosure a few months ago that Richard Wu, CEO of Huawei’s Consumer Business Group, would be giving one of this year’s keynotes created a high degree of anticipation. It seemed highly relevant given the current trade war between the United States and China, not to mention the security and IP theft concerns leveled against the Chinese conglomerate over the past few years. For its part, Huawei has aggressively pushed back against such claims.
Given all of this, Huawei had an incredible opportunity to use its standing room-only IFA keynote to thoughtfully and carefully respond to the Western perception that the company has complete disregard for intellectual property and its technology lends itself to hacking by nefarious actors. The senior IFA management team, led by Christian Göke and Jens Heithecker, did a spectacular pre-keynote job of setting the table with comments that, without taking sides on the trade wars, were conciliatory and erudite in their tone. Göke and Heithecker were clear in their stance that the world prospers when the world’s largest economies work together in a collaborative fashion that maximizes “co-innovation” (a favorite IFA catchphrase).
All of this noted, it was shocking—and I used that term quiet deliberately—when Huawei’s Richard Wu delivered a keynote that was bereft of literally any commentary about these issues, not even a single sentence. The Wu keynote focused on the company’s 5G capability with the introduction of a mobile system-on-chip (SOC) that includes an integrated 5G modem, a new noise-cancelling in-ear Bluetooth headphone, two new smartphones cleverly designed to avoid the company’s Android ban, and a new mesh router (seemingly a tough sell to consumers in the United States who share security concerns about Huawei’s offerings). The bottom line is that Huawei missed a golden opportunity at a highly public venue to address the world’s concerns in a rational manner. I wasn’t expecting a full-on mea culpa, but I also wasn’t expecting a 55-minute sales pitch. All in all, it created more questions than it answered.
The Qualcomm and Roku keynotes were a breath of fresh air in comparison. Qualcomm President Cristiano Amon did a compelling job of laying out the company’s continuing 5G strategy, which is laser-focused on driving accelerated access to 5G devices and creating new use cases as a viable alternative to wired home broadband. Amon was frank in his remarks that much more must be done to open up large major metropolitan areas and scale 5G access, recognizing that operators like AT&T and Verizon are taking a millimeter wave-first approach. Amon also used his IFA keynote to announce that Qualcomm would bring its portfolio of 5G mobile platforms to its popular 600 and 700 series chipsets, something vitally important to expand 5G support into more value-oriented markets like India and China. I was impressed with Amon’s upbeat and aspirational tone during his keynote, and I was especially delighted to hear Amon acknowledge that 5G’s mission is to solve problems and create new usage cases that we can’t contemplate yet—similar to the potential Thomas Edison unleashed when he invented the light bulb in 1879.
Anthony Wood, CEO and founder of Roku, gave one of the most matter-of-fact keynotes I’ve ever seen at such a high-profile industry event like IFA. In an era where it’s not difficult to confuse a splashy keynote presentation with a Broadway musical, there were no falling chandeliers or ascending helicopters. It was remarkable to see Wood give his keynote extemporaneously without relying on a teleprompter. Wood’s plainspoken keynote was not without newsworthiness: recognizing that Roku’s streaming service strength is almost entirely a U.S. phenomenon, Wood announced that the company was kicking off an aggressive push into the European market. This will begin with a TV launch in the United Kingdom in partnership with Chinese manufacturer Hisense (and making its OS available to other TV manufacturers so that they can build Roku TVs as well). This “rinse-and-repeat” strategy may not be flashy, but it worked well in the United States—33% of smart TVs sold have the embedded Roku OS. Roku’s partnership with TV manufacturers started in earnest years ago (its relationship with TCL is one of the key drivers that aided TCL ’s market share rise in the United States). Its early moves put other streaming device companies, including Amazon and Apple , in a catchup position.
Other big non-keynote news at IFA
Not to be outdone, Amazon made a splash of its own with a new Fire TV Cube streaming device, a new Alexa-enabled soundbar, new smart TVs that integrate Amazon’s streaming video content interface, and ambitious European expansion plans (Patrick Moorhead, Principal Analyst at Moor Insights & Strategy, wrote an excellent recap of Amazon’s announcements, which you can find here).
I believe it’s important to note that both Roku and Amazon take two distinctive approaches to their streaming businesses. While Roku employs a Switzerland-like approach to original content, allowing the market to produce content that consumers desire, Amazon believes that it must create original content to attract users. Amazon’s recent deal to offer the popular Eurosport Player streaming services on its streaming products should be a good vehicle to provide localized sports content to European users. Amazon also has a built-in advantage in its huge Amazon Prime customer base, who have access to video and music content free of additional charge to subscribers. While Amazon did announce integration plans with specialty European TV player Grundig to offer its intuitive Fire TV interface on Grundig TVs in the European market (including two versions of an OLED model), it is in catch up mode with Roku on the embedded TV front. I’m still a bit skeptical consumers will want Amazon-embedded TVs since it forces consumers into the Amazon e-commerce ecosystem who otherwise may be reluctant to participate. It will be interesting to see how Amazon’s plans play out with European consumers.
Lastly, one could not help but notice the explosion in the number of home automation, home security, video security, and smart door lock products that were on display at IFA 2019. While there were plenty of name brands showing off their products, the number of solutions offered by start-up companies (particularly focused on the needs of the European market) was staggering. While this is impressive from a solutions breadth standpoint, it raises a critical question for consumers: should you embrace a solution from a company who might not be around 12 months from now? That will be an important topic for a future Forbes column; it takes a considerable investment to build out a smart home and it’s a pain to have to swap out products from companies who are no longer around. Stay tuned.