3 Major Tech Trends to Watch at This Year's CES

Breaking down the must-watch trends that will dominate CES 2014

Jan 6, 2014 at 8:05PM

This year's Consumer Electronics Show, or CES, kicks off tomorrow, and tech investors everywhere should be paying apt attention.

For those unfamiliar with it, the CES is one of the, if not the, top trade shows for the technology industry as a whole. Each January, many of the world's most important tech companies (and a healthy crop of up-and-comers) descend on Las Vegas to highlight the latest gadgets, gizmos, and other game-changers that should dominate the tech industry in 2014 and beyond.

So as we head into the first must-watch event for the tech industry this year, let's take look at several key topics that investors should expect to dominate the discourse at CES 2014 and the companies behind them.

#1 – 3-D Printing
This one's a bit of a no-brainer as 3-D printing remains one of the most widely discussed disruptive trends of recent years, and for good reason.

Cubex Trio

Source: 3D Systems

As the industry powering what some dub the coming "third industrial revolution," CES 2014 will dedicate 7,000 square feet  to the products and companies behind this tech mega trend. By far, the best known companies in this space are 3D Systems (NYSE:DDD) and Stratasys (NASDAQ:SSYS).

Although 3D Systems and Stratasys have been rewarding shareholders for years, they present investors today with the classic growth investors' dilemma. Having absolutely trounced the market over recent time horizons, 3D Systems and Stratasys are expectedly pricey at 20x and 15x their last 12 month's revenue, respectively . But even as these growth giants edge slowly tap into their blossoming profit pool, it will take years (not months) for 3D Systems and Stratasys to realize their full potential.

And with the prospect of selling as few as 100,000  3D printers this year, by some estimates 3D Systems and Stratasys are stocks trading a the rosiest of valuations. Valuations aside, 3D printing, and names like 3D Systems and Stratasys, will certainly loom large at this years' CES.

#2 – Wearables
Wearable tech is another emerging growth space in technology and will assuredly be a major focal point of CES this year.

Of course, Samsung (NASDAQOTH:SSNLF) and Qualcomm (NASDAQ:QCOM) have already introduced products in this space. Samsung's Galaxy Gear and Qualcomm's Toq smartwatches made their debuts last year despite their fair share of skepticism.

However since their launches, Samsung and Qualcomm have done plenty to substantiate the notion that smartwatches, and wearables more broadly, are indeed a viable market. For example, Samsung shocked plenty of people (myself included) when it announced it had sold 800,000 Galaxy Gear smartwatches in November.

Galaxy Gear

Source: Samsung

Beyond Samsung and Qualcomm, almost everyone expect tech behemoth Apple to also enter the smartwatch in 2014 with its much-discussed iWatch. And although predicting Apple's future product plans is a parlor game of sort, the market for smartwatches is expected to grow to roughly 1.5 million shipments this year and be another major area of attention at CES this week.

#3 – Ultra HD TV
With 3D TV having largely gone the way of the Dodo, the television industry might have just found its next major growth driver with ultra high definition 4K TV.

Ultra HD was a prominent trend at last year's CES, and this year's CES should see a number of high-profile product launches centered around the ultra HD 4K standard as well. Expect TV kingpins like Samsung, Sony, and LG to roll out their best and brightest sets in hopes of once again convincing the tech community that Ultra HD TV is indeed the next big thing.

Lg

Source: LG

The standard will get some support from the critical content providers  like Netflix this year, but given the huge costs associated with these devices, I'm still somewhat skeptical the time for Ultra HD is now.

Instead, I'm more interested transformative potential that better integrated software could have on the global television market. In that spirit, LG is set to use this year's CES as a venue to highlight its redesigned version of the WebOS mobile operating system  for its smart televisions. Rather than simply cramming more pixels into each square inch of display space, to me, rolling out new software enabled televisions represents a compelling enough innovation to actually help drive a major refresh cycle in the broader television space.

Summing it all up
The CES is an event all about the future – what the technology industry has in store for 2014 and the years come.

For tech investors this provides us with perhaps the best glimpse into the areas and innovations where the companies we discuss on a daily basis see new opportunity. Just as hockey great Wayne Gretzky implored, tech investors should also want to skate where the puck is going.

And that is precisely why we should all be watching the CES this week.

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Fool contributor Andrew Tonner owns shares of Apple. Follow Andrew and all his writing on Twitter at @AndrewTonnerThe Motley Fool recommends 3D Systems, Apple, Netflix, and Stratasys. The Motley Fool owns shares of 3D Systems, Apple, Netflix, Qualcomm, and Stratasys and has the following options: short January 2014 $20 puts on 3D Systems. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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