Cormark analyst Richard Tse, who has been a regular attendee at CES, the Computer Electronics Show held this time each year in Las Vegas, says this one was a snoozer for gadgets.
But Tse, who returned from CES this past weekend and updated his clients on the show Monday says this isn’t necessarily a bad development, and urges consumers to look beyond the flashy booths full of tablets, “phablets” and cell phones and concentrate instead on an explosion in content and networking data.
Tse says what he saw was a real effort from carriers and service providers to look for ways to monetize their networks using machine to machine technology. The Cormark analyst says every number he saw on the number of connected devices exceeded the world population. Cisco, he says, pegs this number at 8.2-billion, and expect it to rise to 15 billion by 2015 and 40 billion by 2020.
Tse says investors exposed to his coverage universe through names such as Absolute Software (TSX:ABT), Redline Communications (TSX:RDL), Sierra Wireless (TSX:SW) and Research in Motion (TSX:RIM) are set to ride this trend.
Another theme Tse says was prominent at CES was that carriers are finally starting to spend again. He says some of this is being fueled by a phenomenon known as “second screen”, which refers to the fact that about 40% of us are using a mobile device while watching TV. This mountain of data hitting carriers which needs to be managed is being done so now through a variety of solutions, and is fragmented. Tse says carriers are increasingly looking to software solutions. Those investors in Cormark coverage names Sandvine (TSX:SVC) and Redknee (TSX:RKN), he says have good exposure to this phenomenon.
The Consumer Electronics Show got its start in New York City in 1967, and moved to Las Vegas in 1978 where, until 1994, it was held twice each year. The now annual event is one of the world’s largest trade shows, and was home to the debut of devices such as the VCR, in 1974, the CD, in 1981, and HDTV, in 1998. This year CES featured more than 3000 exhibitors.