With 2 million square feet of exhibit space, 161,000 attendees and 20,000 product announcements, the Consumer Electronics Show (CES) is the one of the hottest trade shows on Earth.
But the impact goes well beyond the numbers.
CES is also the single best place to gauge the state of Silicon Valley innovation.
And the 2015 edition of CES, scheduled for Jan. 6 to Jan. 9 in Las Vegas, will highlight some of the key tech trends we've been telling you a lot about over the past several years.
And the watchword will be "connectivity," says Accenture Managing Director John Curran, who runs the consulting firm's Communications, Media and Technology Group.
"The range of high-tech devices is exploding, and so is the amount of connectivity and networking between them," Curran wrote in a recent issue of Forbes magazine. "All this will be evident at CES like never before. We expect to see the 'always connected' consumer become more pervasive than ever as connected devices and services become the norm in new, emerging and traditional product categories."
According to Curran and other experts, the key tech topics at CES 2015 will include:
- The "Internet of Everything," or IoE.
- The "connected car."
- And so-called "4K" TVs.
We've been talking with you about all three of these.
And the fact that they're going to be major points of focus at CES means they've emerged as major profit opportunities - and are worth revisiting again.
So let's take a look.
The "Super Internet"
Over the last couple of years, an awful lot has been written about the so-called "Internet of Everything" (IoE) - a kind of supercharged Internet that will connect billions of devices, including smartphones, industrial machinery, "smart" homes, jet airliners, cars, personal computers and supercomputers.
We've given you our own take on this vision of a "connected future."
We first told you about this advanced vision of the Web back in May 2012. In the September 2013 report "Why You Have to Be Part of the Tech Sector's $14 Trillion 'Land Rush,'" we followed up with a detailed update. And in a mid-October 2013 report - "It's Like They're Creating an Entire New Economy" - we even shared three mini "case studies" demonstrating how the IoE might be employed.
The excitement being generated by this opportunity is understandable.
Bonus: The World's Best Buy Signal Is Also Pointing at These Two Stocks in 2015.
"We're at the earliest of stages - but it's going to be a huge opportunity," says Radical Technology Profits Editor Michael Robinson, our resident expert on Silicon Valley. "There's going to be a lot of money to be made - a lot of money. You're going to be able to talk to your car. Your car is going to talk to your home. Your car is going to talk with the traffic pattern. And cars are going to talk to each other. Sensors are going to be deployed by the trillions - all over the world - and will be talking to one another. It'll be in the tech market, the consumer market and even the industrial market. It'll touch healthcare, the military, entertainment - and will literally change our lives."
In a recent forecast, "Billions of Things, Trillions of Dollars," respected tech researcher IDC predicts there will be roughly 212 billion "things" connected to this souped-up Internet by 2020.
This will include 30.1 billion autonomous connected devices. And it will also include "smart" systems that will be installed to collect data from consumers and from business networks.
The revenue opportunities are staggering.
The market for IoE-related spending will generate $8.9 trillion in annual revenue by 2020 - a 125% increase from the estimated $4.8 trillion spent in 2012.
And networking giant Cisco Systems Inc. (Nasdaq: CSCO) says that, over the next decade, an aggregate $14.4 trillion in global profits will be essentially "up for grabs."
Cisco describes this money as "value at stake" and defines that term as the potential bottom-line value that can be created or that private-sector companies will be able to grab based on their ability to harness the IoE between now and 2020.
And if those companies do harness this next-generation Internet, with all its connected devices, the number-crunchers at Cisco figure those companies could boost their aggregate profits by as much as 21%.
In other words, whatever total amount global corporations might have earned over the course of the next decade, harnessing the Internet of Everything will allow these firms to add to that 10-year total by as much as $14.4 trillion - or 21%.
Accenture's Curran says the IoE will grab the spotlight at CES 2015.
The IoE "converges intelligent products and services that communicate with each other, and with people, over global networks," he wrote in Forbes. "As a market, it has arrived. And now it is ready for prime time exposure at CES, one of the world's largest high tech events."
Here's a tip for you: There's a surprise early leader in the highly promising IoE market - General Electric Co. (NYSE: GE).
We've talked about GE several times here since we first recommended the stock to you back in January. And the long-term profit opportunity with this resurgent conglomerate gets better every time we look at it.
The company has restructured its operations. It's reinstated its vaunted dividend. And it is spinning off part of its immense GE Capital arm, the consumer-financing unit known as Synchrony Financial Inc. (NYSE: SYF).
These "adjustments" are all designed to help GE navigate the near term.
Now GE CEO Jeffrey Immelt is shooting for growth - with a bold foray into the IoE market.
As we told you in a special Private Briefing report, GE is transforming itself into - of all things - an application software company. Indeed, the company's IoE-related "Predix" software business was expected to report $1.1 billion in sales - in its first year of operation.
And given that Immelt and other General Electric insiders are buying their own stock, they must see the same hefty upside for GE's shares that we do.
The Drive for Profits
The "connected car" is intriguing because, like most innovations, it represents both an opportunity and a threat.
As we've been telling you folks for nearly two years, the emergence of the "connected car" is opening up the potential for the "hackable auto" - a threat that we and others are referring to as "cyberjacking."
Under the worst-case scenarios, hackers would be able take control of a car's steering, accelerator and brakes - turning the target vehicle into a literal cyber-weapon. Cyberjacking could be employed to injure or kill the occupants of the vehicle, or to use the car as a kind of wheeled "missile" that could be directed at a specified target.
Automakers would just as soon we didn't talk about this.
They want us to focus on the many great opportunities.
The increasing number of fatal car crashes is forcing Detroit to come up with large-scale innovations to improve safety.
In fact, carmakers have been ordered to use technology to end auto accidents.
That's why car companies such as Ford Motor Co. (NYSE: F) are pouring money into research-and-development initiatives in pursuit of the first driverless car.
These fully autonomous vehicles have the potential to overhaul the way we think about transportation.
As we've said in several reports over the past few months, Ford is our favorite auto-sector stock. And the carmaker's work with the "connected auto" is one big reason why.
Accenture's Curran likes the entire connected-car opportunity.
"The connected car - another central hub of the converging [IoE] - will be a bigger story at CES than ever," Curran wrote. "The focus will not be on how 'cool' they look and their conceptual intrigue. It will be about the growing number of people who are actually driving connected cars. To address that trend, automakers will show how they are embedding connectivity into vehicles that enables the car to become an extension of the smartphone. More advanced tools such as text-to-speech for safe social media updates on a person's smartphone, and updates about a car's performance and maintenance will be incorporated into mainstream production vehicles."
Then there's the 4K TV, the "next big thing" in home entertainment.
The New "Magic Box"
In our Aug. 8, 2013, report, "How to Make a Fortune... in Television," Michael and I told you abouthow the shift to ultra-high-definition television (UHDTV) was about to take the "battle for your living room" to a whole new level.
In that first report - and in others that followed - we told you to expect a big shift from the current high-definition-standard (HD) televisions to next-generation UHDTVs.
Our predictions ran counter to industry thinking (industry experts said the UHDTV shift would take a few years to take hold). And that meant the accompanying recommendations we gave you were big-time Contrarian picks.
As it turns out, however, our predictions were correct.
The UHDTV shift is already underway. And you've cashed in on both of our recommendations.
Indeed, one UHDTV profit play - Ambarella Inc. (Nasdaq: AMBA) - doubled your money in just five months - on its way to a peak gain of 249%. (In fact, we've recommended that stock five times - and you have five double-digit gains to show for it.)
And there's still money to be made in that stock - and in 4K TV, Curran says.
In fact, 4K is just now revving up.
At the new CES, "the story to watch is how the industry overcomes... barriers to accelerate the growth of these stunning [4K] TVs," Curran wrote. "TV makers have been shifting their manufacturing capacity to be 'all in' on the 4K TV market opportunity. This has helped drive down costs. We expect to see many more sets at very compelling consumer price points... to address the demand for more content, there are also likely to be announcements about how companies will use new software platforms to manage, deliver and monetize digital video services. We expect to hear more about strategies from companies on how they plan to meet the need for content through new hardware and streaming services."
We'll continue to keep an eye on all three of these stories.
Here's wishing you a happy, safe, healthy and prosperous New Year.
I can't thank you enough for being such a wonderful audience.
See you "next year."
Unless otherwise directed, we recommend investors employ a 25% "trailing stop" on all holdings.
NOTE FROM EXECUTIVE EDITOR BILL PATALON:
In my role as the "gatekeeper" of news, insights and investment reports here at Money Morning, I have daily briefings from our team of global investing gurus - including top experts such as Keith Fitz-Gerald, Shah Gilani, Dr. Kent Moors, Michael A. Robinson and Sid Riggs.
What if, I thought to myself, we could put you right in the room with us - giving you a virtual ringside seat - when those briefings take place? What if we could bring you some of the ideas these experts are researching for their high-dollar trading services?
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About the Author
Before he moved into the investment-research business in 2005, William (Bill) Patalon III spent 22 years as an award-winning financial reporter, columnist, and editor. Today he is the Executive Editor and Senior Research Analyst for Money Morning at Money Map Press.