Apple’s Indirect Presence Fades from CES

I want to make an observation, which I feel is an important one. However, I don’t want it to be taken the wrong way. For the record, Apple is not doomed. What should be noted, is how fast the Amazon ecosystem is growing. The critical point here is how consumer electronics vendors need platform partners. The question at hand is whether or not that platform partner can or will be Apple or not. As of now, the answer is no.

For many years, articles were published discussing how even though Apple was not present or participating in CES they were still one of the shows biggest winners. This was during, what we may now call “peak Apple ecosystem.” I distinguish this phrase from peak Apple, which I don’t believe is the case. However, one could ask whether Apple’s ecosystem has reached its peak.

We would go to CES and remark at how Apple’s dominance loomed over the show. Vendors of all shapes and sizes were rushing to be a part of the Apple ecosystem. Apple’s ecosystem was front and center with everything from iOS apps, to accessories galore for iPhone and iPad, and even companies looking to copy Apple in many ways. The last year or so, things have dramatically changed, and that change is further evident at this year’s CES.

Gone are the days of Apple’s presence, or observably “winning” of CES, even though they are not present. It was impossible to walk the show floor and not see a vast array of interesting innovations which touched the Apple ecosystem in some way. Now it is almost impossible to walk the floor and see any products that touch the Apple ecosystem in any way except for an app on the iOS App Store. The Apple ecosystem is no longer the star of CES but instead things like Amazon’s Alexa voice platform, and now Google’s assistant voice platform is the clear ecosystem winners of CES.

While many Apple defenders want to dismiss the momentum we are observing with the Amazon ecosystem on display here at CES, while Amazon is similarly not present just like Apple, I believe it is a mistake to do so.

It is easy to say that because Apple was never present at CES that the show didn’t mean something to them or their ecosystem. It is easy, and correct to say that CES was not, or never was, a measure of the health of Apple’s products. It is, however, incorrect and dangerous to miss that CES had been, for some time, a barometer for the health of Apple’s ecosystem.

As I mentioned, our ability to measure any platforms ecosystem from what we observe at CES, is the main reason so many are paying attention to what is happening with Amazon’s Alexa platform. Google Assistant is certainly more present than it was last year, however, when you look at how third parties are talking about-and marketing-their support of these assistants they are putting significantly more effort into talking about Alexa than Google Assistant. Which is a telling signal. Again, to reiterate this point, third parties used to market, and spend energy talking about their integration with iOS or support of iPhone/iPad with the same rigor they are now talking about Amazon’s Alexa. This can not be ignored.

As I outlined, with the two scenarios for Amazon’s Alexa, one could take a position that this is short-lived, and the dust will settle once Apple enters the market with HomePod and you will see more partners and third parties start talking more about HomeKit than anything else. For Apple’s sake, I would love for this to happen but I don’t see it unless Apple’s makes some changes to where Siri can be integrated outside of Apple first-party hardware.

With all of that being said, I am noticing a bit more support of HomeKit this year vs. last and with Apple’s recent pivot surrounding HomeKit requirements which required a dedicated security chip from Apple that now allows that security and authentication to be done in software, I do expect even more HomeKit support next year.

But this point goes beyond just supporting HomeKit. It speaks to the more significant integration story with a platform’s ecosystem, which we know creates momentum and market perception, that one platform is the dominant leader. And as we are so often reminded, perception is often the reality.

Of course, there may be a bigger picture point. During the era where the Apple ecosystem was on display at CES, the consumer/personal electronics category was still just coming into its own. This category is now reaching full maturity and has grown significantly since those days. It is possible the industry has simply grown so much that where it used to sit in Apple’s shadow, it has now fully come into its own and grown up.

Whichever theory you want to land on, the bottom line is the CE industry looks for platform partners and requires fitting in with a mature or maturing ecosystem. We can’t ignore the fact that Apple’s ecosystem, which used to be on display at CES, is no longer and competitors ecosystems are now the ones that dominate the show. How this plays in the market, we aren’t sure, but we need to keep a close eye on these new dynamics.

There will be more to say on this over 2018, but for subscribers today I dove deeper on this observation and how Apple can start to think about their Siri Microphone Strategy. Subscribers to the Think.tank can click here to read my further thoughts.

Published by

Ben Bajarin

Ben Bajarin is a Principal Analyst and the head of primary research at Creative Strategies, Inc - An industry analysis, market intelligence and research firm located in Silicon Valley. His primary focus is consumer technology and market trend research and he is responsible for studying over 30 countries. Full Bio

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