From Air Fryers to AI Chips: Highlights from CES 2025

[00:00:02] It's Thursday, January 9th, 2025 and I'm Dave Solt. Four things to know today.

[00:00:07] CES 2025, the tech market set to grow unless tariffs bring the party to a halt.

[00:00:13] AI chips shine, but are Air Fryers the best we can do?

[00:00:18] NVIDIA, Intel, and AMD play the incremental game, chips, AI, and small wins, and

[00:00:24] From hardware woes to AI wins, the changing landscape of tech and SMBs.

[00:00:30] This is the Business of Tech.

[00:00:34] Let's talk about the Consumer Electronics Show, which I've been processing news from, so you don't have to.

[00:00:39] I'll start with their market predictions.

[00:00:42] At CES 2025, the Consumer Technology Association predicts a 3.2% growth in the U.S. tech market,

[00:00:51] reaching $537 billion, as long as a trade war does not occur due to proposed tariffs by President-elect

[00:00:59] Donald Trump. The event highlighted generative artificial intelligence, with 93% of U.S. adults

[00:01:05] familiar with the technology and 61% having used an AI tool. Additionally, the AI retail market is

[00:01:13] expected to grow to $7 billion, while virtual try-on technology could reach a $2 billion market.

[00:01:20] The CTA warns that tariffs could significantly impact spending on smartphones, laptops, and gaming consoles,

[00:01:27] particularly causing declines of up to 68% for tablets and laptops. Additionally, the rise of

[00:01:34] Generation Z, expected to make up 27% of the global workforce this year, may drive further demand for

[00:01:41] new technology, as this generation is known for being early adopters.

[00:01:46] Why do we care? We are well into the AI noise portion of the hype cycle, as I will highlight when we talk

[00:01:55] product. AI is now the overused marketing terms, and in many cases can just be swapped with algorithms.

[00:02:03] Various portions of the technology industry are both preparing for a trade war and do not want one

[00:02:08] with China. I'll focus on the first. Consider what your organization needs to be doing to prepare.

[00:02:17] Next, let's explore some key themes from the show, starting with AI, which was omnipresent.

[00:02:22] Artificial intelligence dominated major laptop announcements from Acer, HP, and Dell.

[00:02:28] Intel unveiled its enterprise-focused Intel 200v chip, while AMD introduced the Ryzen AI Max and Max Plus processors.

[00:02:37] Acer showcased AI-enabled laptops including Swift Go models priced at $899 and $949, alongside budget-friendly options.

[00:02:47] HP refreshed its EliteBook series with the Ultra G1i, featuring 48 tops of neural processing power priced at $2,019.

[00:02:57] Neural processing units were a standout trend, promising enhanced performance and energy efficiency in most devices.

[00:03:04] Some products, however, raised eyebrows. Beyond AI-integrated TVs, niche gadgets like the Spicer AI Spice Dispenser relied on proprietary capsules and lacked grinding capabilities, questioning its usefulness.

[00:03:21] Similarly, the ChefMaker 2 Air Fryer boasted a feature to scan cookbooks for recipes, but its practical appeal is unclear.

[00:03:30] Razer's Project Ava, an AI gaming assistant offering gameplay tips, suffered from distracting delays.

[00:03:39] While US AI companies raised $97 billion last year, many vendors are pushing ideas that struggle to meet real consumer needs.

[00:03:48] Meanwhile, Chinese AI hardware and robotics companies made a strong showing at CES, even amid tariffs threats.

[00:03:56] Their participation highlights the global competition to capture AI and robotics market share.

[00:04:02] Microsoft also leveraged CES to position 2025 as the year of the Windows 11 PC refresh.

[00:04:10] Yusuf Medai, Microsoft's EVP and Chief Marketing Officer, emphasized new security features and AI capabilities in Copilot Plus PCs, aiming to drive upgrades.

[00:04:20] According to IDC, 80% of businesses and 70% of consumers are expected to refresh their PCs by the end of 2025.

[00:04:29] However, Windows 10 remains dominant with a 62.7% share of desktop OS market, while Windows 11 lags at 34.12%, slightly down from November's 34.94%.

[00:04:45] Despite year-over-year growth, Windows 11 adoption struggles to surpass its predecessor.

[00:04:51] Analyst Kieran Jessup of Canalis noted that Windows 10's market share surged in the US from 58% in October to 67% in December.

[00:05:02] With Windows 10 support ending in October of this year, Microsoft faces mounting pressure to address user hesitancy towards Windows 11.

[00:05:11] Why do we care?

[00:05:12] As noted by a survey from Market.us, many air fryer buyers have not expressed a demand for cookbook scanning features.

[00:05:21] And we care because the industry faces challenges in identifying feasible AI use cases, leading to over-promising and under-delivering on capabilities.

[00:05:31] As a result, consumers are left with what has been described as, in real life, AI slop.

[00:05:38] Be warned that over-promising and under-delivering with AI is a trend, and be warned about doing it.

[00:05:44] Bring a skeptical eye to this process, and remember that helping customers modernize their technology, as well as use technology to drive business outcomes, are both independent of technology and not reliant on any single hype cycle.

[00:06:00] And here's the product tactical news.

[00:06:03] NVIDIA CEO Jensen Wong introduced several innovations, including Cosmos, an open-source tool for generating realistic training data for robotics.

[00:06:13] It's expected to significantly reduce costs for self-driving car technologies, which Wong predicts will be the first multi-trillion-dollar robotics market.

[00:06:22] NVIDIA is also collaborating with Toyota on an autonomous driving operating system.

[00:06:27] NVIDIA entered the agentic AI market with its Lama Nemotron family of large-language models, based on Meta's foundation models, aimed at enhancing enterprise automation.

[00:06:39] The company unveiled a blueprint for converting PDFs into podcasts, and is working with partners on industry-specific AI solutions for tasks like customer support and fraud detection.

[00:06:49] NVIDIA also launched a personal supercomputer designed to enable local AI deployment, improving accessibility and efficiency for businesses and individuals.

[00:07:01] Intel revealed its Arrow Lake Core Ultra 2 chips for laptops, designed for gamers, content creators, and ultraportables.

[00:07:08] While they feature neural processing units for AI tasks, their 13 trillion operations per second performance falls short of competitors like Qualcomm and AMD, which offer 45 and 50 tops, respectively.

[00:07:23] Intel's co-CEO Michelle Johnson-Holtzhaus reaffirmed the company's commitment to the discrete graphics market, citing the success of its Arc B580 GPU and announcing the upcoming B570 GPU and Panther Lake chips for late 2025.

[00:07:40] AMD launched new processors for laptops, desktops, and gaming handhelds, reporting a 28.7% share of the desktop CPU market in Q3 2024.

[00:07:51] A notable year-over-year increase.

[00:07:54] Its new FireRange series for mid-range laptops promises lower power consumption, while the upcoming Ryzen AI300 and AI Max processors aim to boost AI performance, launching in early 2025.

[00:08:09] Dell announced the rebranding of its PC lineup, retiring multiple brands, including XPS and Optiplex.

[00:08:17] The new structure focuses on Dell, Dell, Dell Pro, and Dell Pro Max for mainstream, professional-grade, and high-performance PCs, respectively.

[00:08:27] Each line includes base, plus, and premium pricing tiers.

[00:08:31] And finally, Reddit introduced Reddit Pro Trends, a tool for businesses to monitor real-time discussions about their brands or products.

[00:08:41] It also launched a new ad format for Ask Me Anything sessions, allowing businesses to promote these interactive events through Reddit's ad manager.

[00:08:50] Why do we care?

[00:08:52] CES isn't a show that one should expect massive B2B outcomes from, yet one that drives mindshare and has practical underpinnings.

[00:09:01] The chip and computing platforms all saw incremental upgrades.

[00:09:06] Thematically, though, there is not a lot of new here.

[00:09:11] Let's go with some big ideas to round out the week.

[00:09:14] In a recent presentation at the Canalys Channels Forum, veteran analyst Steve Brazier warned that the tech hardware industry is facing an existential crisis,

[00:09:24] with growth shifting to mere replacement cycles.

[00:09:28] He stated that major vendors such as Cisco and HPE are struggling,

[00:09:32] with Cisco reporting a 15% decline in its switching and router business.

[00:09:38] HPE's revenue growth in the last fiscal year was primarily driven by artificial intelligence server sales,

[00:09:44] which are less profitable due to direct selling.

[00:09:48] Brazier's insights are supported by data from Canalys,

[00:09:51] indicating a consolidation in the channel as larger resellers acquire smaller players.

[00:09:56] He pointed out that while the hardware market is flat,

[00:10:00] cybersecurity remains a growth area, with double-digit increases.

[00:10:04] The challenges faced by the channel are further underscored by a comparison of market capitalizations,

[00:10:10] showing that investments in channel partners lagged behind the broader market.

[00:10:15] Brazier concluded that the tech industry in Europe has missed significant growth opportunities,

[00:10:20] leading to increased costs for office workers in the region.

[00:10:24] As artificial intelligence continues to dominate,

[00:10:27] he cautioned that the channel has been largely excluded from its benefits.

[00:10:31] In a recent article on TechIsle's blog,

[00:10:35] analysts predict significant advancements for S&B businesses this year.

[00:10:39] Contrary to traditional beliefs that large enterprises lead technological adoption,

[00:10:44] S&Bs are expected to leverage their agility and innovate,

[00:10:48] particularly with the rise of specialized artificial intelligence solutions.

[00:10:52] The article outlines critical trends,

[00:10:54] including a shift towards industry-specific AI tools

[00:10:58] that promise measurable returns on investment,

[00:11:01] with the expectation that by the fourth quarter of 2025,

[00:11:05] major verticals will see three to four dominant players in the market.

[00:11:09] Additionally, the adoption of automation-in-a-box solutions will simplify technology integration,

[00:11:15] while S&Bs are anticipated to increasingly seek unified experience platforms

[00:11:20] to enhance communication and customer service.

[00:11:22] As reliance on AI grows, vendor risk management and security measures will become paramount,

[00:11:29] requiring S&Bs to evaluate AI vendors thoroughly.

[00:11:32] Overall, S&Bs are poised to utilize AI analytics for improved decision-making and customer insight,

[00:11:39] making this year a pivotal year for the sector.

[00:11:43] Why do we care?

[00:11:44] Well, your question's to ponder.

[00:11:47] How much of your business is reliant on hardware?

[00:11:49] That's a very old set of thinking, if it is.

[00:11:53] And which emerging technology trends are ones that you can leverage

[00:11:57] to help customers drive those business outcomes?

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