Tyler Suiters                      

Hey, everybody. With the Consumer Technology Association, I'm Tyler Suiters. We are the owner and producer of CES, the world's largest, the world's most influential tech event and we're here to help you get CES Ready. The event is January 7th through the 10th, 2020, as always, in Las Vegas. Today, we're tackling the topic of smart cities and lest do you think this is too forward-looking, consider this stat—global smart cities spending is expected to reach $34 billion in 2020. $34 billion, that's globally of course, but it is smart cities dedicated spending. It's not that hard to imagine that big total when you consider how many sectors are involved in smart cities development: transportation, health, public safety, energy. Then you look at the technologies in place: Internet of Things, 5G, connectivity, AI, big data of course as well. Plug that into the CES experience and what you get is a single location with the technologies, the solutions, the players, the key audiences that are advancing smart cities technology, both in the U.S. and around the world.

Tyler Suiters                      

Today, a pair of conversations. One with the Smart Cities Council, and you've met Jason Nelson before. He's the executive director there. The council's made up of major players in the tech sector and heck, you could probably say major players in the corporate sector. Among the founding members of this group when it launched back in 2013, AT&T and Cisco. I will let that sink in so you can weigh the gravitas of the Smart Cities Council. Also, discussion of where smart cities fit into coming tech trends. Our resident expert on trends and all things technology, Steve Koenig who leads CTA's research team, will be here to talk about the role of smart cities, what to expect in the key technologies involved as well as their developments and deployments around the world. All of that is coming up on this smart cities edition of CES Tech Talk.

Tyler Suiters                      

Joining us once again today is a familiar face, or familiar voice is probably the best way to put it, Jason Nelson is executive director of the Smart Cities Council. Jason, great to talk with you again.

Jason Nelson                     

Yeah, glad to be back.

Tyler Suiters                      

So here we are, roughly a year after our last official conversation here on the podcast. How about a brief state of play? Where are we in the U.S. right now in terms of smart city development and deployment?

Jason Nelson                     

So in 2019, the Smart Cities Council collected over 200 different smart city projects from cities around the country. We have seen cities really cross the chasm in terms of their planning. They're planning smart city projects all over the place and we're really excited about that momentum. We're seeing cities engage multiple stakeholders, breaking down silos within their communities and pulling together those types of projects and identifying those intersections of how they can collaborate between various departments and utilities and universities and military bases and ports and airports and all of the great parts that make up our cities. We're seeing a lot of planning on that. I think we're still very early days in terms of the implementation of those plans. They're still working on how they're going to be able to finance them and put them in place. But the planning is happening today. So, it's a really good time to be in this space.

Tyler Suiters                      

What do you see the level of awareness being right now? And I'm speaking of the public sector, right? Municipalities, you mentioned the military, maybe utilities to the extent that that's in play as well. Significant increase in the last year or so, or are you already at a critical mass where it's well understood?

Jason Nelson                     

Yeah, I think that citizens are waking up to the fact that technology is a huge enabler in helping unlock potential in their communities, whether that's economic development in growth or whether it's solving problems; traffic congestion, trouble with parking, etc. In a lot of the communities that we've worked with, citizens groups are at the table actually actively planning with the city leaders as they're building those plans. Yeah, I think that there's a lot of good awareness there throughout North American and around the world.

Tyler Suiters                      

So general awareness is one thing. What about understanding of the value prop, right? What smart cities deliver to specific constituencies, whether that is a general consumer, right, the g-pop audience or if it is elected or career officials, right?

Jason Nelson                     

Well, so the number one technology that we've seen enabled that we received from the cities that applied were digital citizen engagement. So transformation of traditional city processes, bringing them online, putting them in applications and making it easier for the city to engage with the citizens, I think that's a pretty easy value prop for citizens to understand. When they're no longer having to circle the block to identify parking spaces, but are instead able to just go and write to that parking space, I think it's pretty easy for them to understand the value proposition.

Tyler Suiters                      

Yeah, and you throw in monetary value, right? Cost savings, efficiencies, etc., let alone saving money on a stamp that you don't have to mail.

Jason Nelson                     

Right.

Tyler Suiters                      

Speaking of digital engagement, right? But you get into what you're saving, I assume at some point on taxes, right? I guess it depends on the breakdown.

Jason Nelson                     

Yeah. I think the opportunity is going to be to reinvest those savings, whether it's manpower and assets or direct savings through processes that are eliminated, consolidating equipment and software and services between the various departments. I think it's really all about taking and redeploying that into more efficient ways of working and engaging the community.

Tyler Suiters                      

Mm-hmm (affirmative). So one element certainly, is that individual level of community by community, municipality by municipality. Another is the infrastructure in place. We talk about it regularly, the value of the potential, the platform technology of 5G.

Jason Nelson                     

Mm-hmm (affirmative).

Tyler Suiters                      

Give us an overview of what you see right now and the critical nature of a fifth generation.

Jason Nelson                     

Yeah, 5G, I think, is a foundational technology for the future of smart cities. It is a wireless technology, but it's very much a wired technology all the way until that very last mile. Cities are understanding that they need to build out their fiber deployments. They realize that they need to make sure that they're creating equity in their connectivity throughout their communities and it's not just about connecting that dense urban core, but also getting out to some of the more suburban and ex-urban regions and then into the larger regional issues. We do see a that fiber's being a key part of the infrastructure as well as that 5G implementation that needs to happen in so many cities.

Jason Nelson                     

The carriers have been very good about lighting up cities and starting that process. I think that there's a lot of work to go within communities in order to make them 5G ready. We are working with a lot of those cities helping them. We were just in Racine a couple of months back. They were just awarded a 5G licensed by U.S. cellular and they're working with them to implement that. I think it's an important part of the future of smart cities. I don't know that we've identified those key applications yet that are going to drive the adoption of 5G, but we saw that with 4G as well where the Lyfts and Ubers and AirBnBs of the world didn't come until after we had that steady mobile connectivity of 4G. So, we are actively looking at some of those really cool new technologies that are going to be driving the adoption of 5G.

Jason Nelson                     

I think some of the ones that we've seen are some of the public safety applications, being able to wire up a vehicle and have full knowledge of officer's health rate and vital signs, being able to have cameras and body cameras on the ground live streaming what the officers are seeing. So that's, I think, one really good application for the future that we're taking a look at.

Tyler Suiters                      

Jason, is it too simple to just delineate the infrastructure of smart cities into, on one hand the network, right? The infrastructure that is what we just talked about, let's say 5G, use that as the most likely proxy, and then the other side is the sensorization of everything we see around us—the lights, the sidewalks, the streets, doors, buildings, whatever it might be. Is that an oversimplification? I know it's far more nuanced on some level, but is that accurate? Is it fair?

Jason Nelson                     

When we look at it, I think that a single application is able to justify the value and the expense of a sensor, right? If you're looking at it from a, “How does this technology get implemented into a city?” Those sensors, those initial communications are fine. That makes sense when you're rolling out a smart parking application or whatever. The harder part is when you start talking about a 5G implementation. There's a lot of significant network equipment that needs to get implemented into the city in order to make that a reality. So, there are a lot of pieces of that infrastructure equation that would not be justified by a single application.

Jason Nelson                     

What cities need to do is come together as departments, bring public safety, public works, transportation, health and human services all together so that all the data that they're collecting through these sensors, through these different applications and starting to think about 5G is that foundational level of technology that is really going to help propel the city forward and unlock new opportunities.

Tyler Suiters                      

Mm-hmm (affirmative). So we've talked a lot about how the Smart Cities Coalition and your member companies and others, really the tech sector at large, is engaging with others. You also have a program just about to kick-off again about getting that engagement back to you hearing from these stakeholders. Dive into that if you would.

Jason Nelson                     

Yeah, we're about to kick off our 2020 readiness challenge. That's where we offer cities an opportunity to come in, tell us about their plans and going through that application process is a really educational experience for a lot of them. There's an opportunity there for them to go step by step and plan the projects online in our application, help them connect stakeholders, identify key drivers of those projects, push forward with the metrics for success and really start to flush out exactly what needs to happen in their community in order for that project to be successful.

Jason Nelson                     

We then take that data and help them identify mentorship opportunities, cities that are doing something similar so that they can learn from each other and actually exchange data and information and maybe even in some regional cases, identify opportunities for aggregation of projects in similar communities. So we're excited about that. We're going to be opening up here in the next couple of weeks the ability for cities to come in and apply and we look forward to having another couple of dozen cities complete that application for this year.

Tyler Suiters                      

So that's a 2020 challenge—what a great round number, right? 2020—and pick your technology that was on the way and years past and you could probably line it up with some 2020-style prediction, but what is the next big number date in your mind, Jason, as far as smart cities deployment, adoption, actuality, realization, pick it?

Jason Nelson                     

I'm really focused on 2020. I think we've got a real opportunity here to get some of these foundational transformational projects off the ground. There's a lot of things that we see that are happening right now, right here. If we, in 2019, worked with the state of Texas to identify 19 different projects that are going to be a part of their resiliency push to help them move forward after a hurricane reconstruction and really create more resilient networks in their communities. So that's something that is coming. We see a lot of momentum here in Puerto Rico as well as in Florida and The Bahamas and in California responding to the wildfires and in Baltimore in response to the cyber attacks.

Jason Nelson                     

So, resiliency, I think, is going to be a key theme that 2020 is going to really, I think be a transformational year for.

Tyler Suiters                      

Yeah. So, you hit two key topics at CES 2020, Jason, smart cities, one of course, which is the theme here, but also resilience and the idea that these two are paired and extremely linked. What is your approach to CES 2020 knowing you can't see it all and talk to everyone and touch every potential application? How are you going into it?

Jason Nelson                     

Yeah. I'm excited to see the technology, but I'm also excited to have a lot of conversations with the leading experts. It's a great show to be able to connect with those city leaders as well as the technology leaders and understand what the business models are. How is this industry going to move forward? I think that there's going to be some really good stories to tell here this year.

Tyler Suiters                      

You're a major Detroit sports fan. By January 7th, first day of CES 2020, where are the Detroit Lions going to be?

Jason Nelson                     

I gave up on Lions football long, high back. I can only have so many MVP Hall of Famers retire in the prime of their career [crosstalk 00:14:51]

Tyler Suiters                      

The Lions are trending, man.

Jason Nelson                     

They're going to do better, but we'll see.

Tyler Suiters                      

871, just throwing numbers out there.

Jason Nelson                     

There you go. I think that's about right.

Tyler Suiters                      

Jason Nelson, not only Detroit sports fanatic, but also executive director of the Smart Cities Council. Jason, always great to have you with us here. Thanks so much.

Jason Nelson                     

Thank you.

Tyler Suiters                      

Hey, with us today is my colleague and pal. That's not an official title. Steve Koenig with the Consumer Technology Association. Steve is the Vice President of Research here. Steve, great to have you with us as always, my friend.

Steve Koenig                     

Glad to be here.

Tyler Suiters                      

I know it's hard to catch you when you're not on the international road leading up to CES. So, it's a real privilege to have you actually in the studio with us today.

Steve Koenig                     

Thanks. Thanks for having me.

Tyler Suiters                      

Yeah, yeah. We're diving into 5G. We had this conversation around this time last year. You and I are constantly talking about the progress of 5G, the applications of it and your view as a trend spotter, so to speak. That's a casual term for you, I know, but it seems like a lot has happened in just the last 12 months as far as the actuality of 5G.

Steve Koenig                     

Well, I'm glad you've noticed and I'm sure a lot of other people have noticed all the activity from the four major carriers here in the U.S. of course, as they light up 5G networks around the country, but a lot of other countries as well. There is this global race to 5G because countries around the world, the US included, they really want to realize that early mover advantage because while we're talking about the fifth generation of wireless connectivity, 5G is the first wireless generation that will ultimately be led by the enterprise or business, which means that 5G is literally going to overlay the entire economy and intersect and impact with every economic sector.

Tyler Suiters                      

So tell me how we're doing so far in casual terms. You hear a lot about the progress of the major economies in Asia. How's the U.S. doing?

Steve Koenig                     

We're doing quite well I'm pleased to say, and in fact, we're finally getting some support on the policy front, at the federal and state level. I think more and more stakeholders are understanding the importance, but the 5G rollout here in the U.S. continues apace. I think it'll gather even more momentum in 2020, but it's important for listeners to understand that that 5G is a little bit different from previous generations in that it requires a lot more infrastructure.

Tyler Suiters                      

So dive into that, right?

Steve Koenig                     

Yeah, so what I'm talking about is just a lot more antennas of all different shapes and sizes. Everybody's familiar with the omnipresent cell towers that we see dotting the landscape, but just imagine just very small antennas placed on the side of buildings on lamp posts for example. So what this does is it helps render 5G across three different spectrum bands, essentially low, medium, and high. High, you'll hear the term millimeter wave and this is where you need a lot of density because millimeter wave is what is kind of the secret sauce of 5G in terms of really, really fast speeds, but that millimeter wave signal can't travel that far. So you need a robust density of antennas. What I'm saying is, there's a lot more infrastructure and therefore, it's going to take several years to really fully flesh out and deploy 5G networks across the country.

Tyler Suiters                      

A couple of milestones in 2019 and on into 2020, Steve, one is the actual infrastructure going in place, which you said and the major carriers are now on their way toward that, correct?

Steve Koenig                     

That's right, yeah. In fact, a lot of them, I would characterize it as dozens of U.S. cities where we see the first 5G network starting to light up.

Tyler Suiters                      

Okay, and then the other milestone, and this is a bit insular, right? Looking inward here within the tech sector, but your research team for the first time is putting out 5G product sales across the category, right? We're now starting to be able to measure 5G products coming into the market where consumers can adopt.

Steve Koenig                     

That's true. And chief among them are of course, mobile handsets or smart phones.

Tyler Suiters                      

Right, right.

Steve Koenig                     

So our forecast that was updated just back in July, and by the way, listeners need to understand we'll update these data heading into CES in January, but our current forecast calls for just 2.1 million 5G handsets shipping this year in 2019.

Tyler Suiters                      

2.1 million out of—

Steve Koenig                     

Out of about roughly 170 million, so a fraction.

Tyler Suiters                      

Right.

Steve Koenig                     

But that's going to change substantially in 2020. As I mentioned, I think, we're growing the network a pace here in 2019, but 2020 is when we'll start to gather even more momentum with building out the network across America. We'll also witness a 10 fold increase in the number of 5G handsets shipping. So from about 2 million to about 20 million. If you need evidence for this, just look no further than... It's widely believed that Apple's first 5G handset will be announced probably in the fall of 2020.

Tyler Suiters                      

Yeah. So I'm going to pull out the most overused line from, "Field of Dreams," ever, right? Which is, "If you build it, they will come." In this application, Steve, what do you need to build? It's not really building the devices is my impression as much as it is building the network, and that's when consumers will come that way when it's available. Is that fair though?

Steve Koenig                     

Yeah, that's very fair. This is a good junction to mention that we're not just flipping a switch from 4G to 5G.

Tyler Suiters                      

Right, right.

Steve Koenig                     

4G is going to exist alongside 5G for a good amount of time and I would say five, six, maybe 10 years, but as we flesh out that network. So if you're in an urban area where 5G service is offered and you subscribe, you can probably enjoy that mostly, let's say in the downtown area just to give a generalization—

Tyler Suiters                      

Sure.

Steve Koenig                     

—if you went [crosstalk 00:21:15] Yeah. If you go farther afield out in the 'burbs, if you like, that's probably when you'll switch over to a 4G signal and that'll be seamless to the user. That's just maintaining continuity of service, but whilst you're in that 5G zone, you'll enjoy near gigabit speeds, which today on 4G, we can muster maybe 30 to 50 megabits. So we're talking near gigabit, which would be hundreds and hundreds of megabits, up to a thousand with 5G.

Steve Koenig                     

The difference will be palpable in your experience and probably at the vanguard of that experience, I would say any kind of streaming video is going to be a lot smoother on that 5G network. Yeah, it's going to take time, but we'll get there.

Tyler Suiters                      

If any of you have actually seen Steve in action in one of his presentations around the world or at CES, you can always count on at least one Star Wars reference somewhere in there. Often, it's multiple. When you get to two or three, that's what I know, Steve, you're really rolling.

Steve Koenig                     

I'm hitting my stride at that point.

Tyler Suiters                      

When we're speaking in practical terms, let's say three years from now, the latest final Star Wars trilogy movie is out, download speeds now versus download speeds, let's say... You tell me the window. I'm saying two or three years, but for an FX heavy, CG heavy, graphically dominated movie like that, what you can get now versus then?

Steve Koenig                     

Yeah, we're talking about minutes become seconds—

Tyler Suiters                      

Mm-hmm (affirmative).

Steve Koenig                     

—is really what we're looking at. Two, two-and-a-half hour movie maybe takes five to eight minutes on the current network 4G LTE. That's probably less than five seconds on a 5G network, so super fast, super fast. This is also a good point to mention, with speeds like that, a lot of people are referring to the 5G world as kind of the post smartphone era. The reason is, is because with speeds like that, we're going to be able to bring forward a lot of innovation on entirely new platforms like AR glasses, wireless VR, as a couple of examples. Expect to have a lot more connected accoutrements, if you will, that that we're wearing and using. So it may not just be our smartphones anymore. We may carry with us a lot of other connected devices.

Tyler Suiters                      

What about the devices that we won't carry, but we will engage with at such a deep level. I'm heading, Steve, towards smart cities, right? The idea of 5G as a platform technology, a critical technology and that's a foundation upon which some massive application like smart cities will sit, correct?

Steve Koenig                     

Well, that's true. When we talk about 5G really overlaying the entire economy and intersecting and impacting different economic sectors. Smart cities is one of the dynamics embedded therein, and we described 5G's overlay of the entire economy in two broad areas. One is massive IoT, the other is critical IoT. Allow me to explain. So massive IoT has to do with lots and lots and lots of endpoints, but little bits of data. Maybe that's a temperature reading or a simple on-off orientation.

Tyler Suiters                      

A bit of the sensorization.

Steve Koenig                     

Sensorization, exactly. So in smart cities, you might see different sensors dedicated to different things, weather or an optical sensor measuring traffic patterns, these kinds of things just dotted all over the urban landscape for public safety, for transportation, weather monitoring, all kinds of things. Critical IoT on the other hand, deals with end points, but a lot more data. This data's very sensitive, ergo critical IoT. What that looks like in a smart cities context is fleets of self-driving vehicles operating in and around the urban environment. We don't want these self-driving vehicles to hesitate for a millisecond. So, the industry term is ultra-reliable, low latency communication, or URLLC. So, listeners will hear more about URLLC probably in the future, but smart cities is a great example because it's kind of a hybrid of these two main application areas that will describe how 5G intersects with the broader economy in the coming years.

Tyler Suiters                      

Mm-hmm (affirmative). It's interesting, Steve, I want to wind up about where we started, right? The idea of a global race. We talked about a global race for 5G, but there's also a fleet of other races, so to speak, for smart city applications, for self-driving vehicles, for a widespread drone network for example, for digital health, for AR VR. I'll take a deep breath and just force myself to pause there. So these individual races, but they're really all pinned, at least on a national level, to what a nation is able to do with 5G. Is that fair or is that an oversimplification?

Steve Koenig                     

Well, that's not an oversimplification. It's fact. It's fact. This is why it's really important that the U.S. maintain leadership in this race to 5G because as I mentioned, 5G is going to intersect and impact every facet of the economy. That's everything from entertainment to agriculture. What I'm saying is, is that things that we conceive of that are like science fiction to us today will be brought into reality in a large part because of the capabilities of the advanced 5G network. So things like, and here comes your first a Star Trek reference, if we think about Dr. McCoy and the advanced technology for diagnosing and so forth, I mean think about your physician or a specialist using advanced AR technology for an exam or something, maybe that's looking for skin cancer or something. We're going to see all this stuff come to fruition in this next decade and it's going to be exciting. Just thinking about all the innovation we've seen in the past 10 years looking ahead, I can't wait to see a lot of the things that I attribute to sci-fi today become part of my daily life.

Tyler Suiters                      

Yeah. Let's end on that optimistic and enthusiastic note, Steve. I thought you were going to talk about how much better 5G will allow you to follow your beloved Wolverhampton wolves from the English primarily.

Steve Koenig                     

Oh, yes. Well, that too. That too.

Tyler Suiters                      

Steve Koenig is Vice President of Research here at the Consumer Technology Association and you can catch him at CES 2020. One of the best presentations reliable year after year is the Sunday afternoon trends presentation that Steve and his team execute. I appreciate the preview, Steve and for the deep dive and always a pleasure, my friend.

Steve Koenig                     

Same here. Thank you.

Tyler Suiters                      

Coming up next time on CES Tech Talk, an important topic regardless of your place in the tech sector. There is a trade war underway. The U.S. and China are of course the key players and we are diving into the cost of the tariffs that the U.S. has now put in place, the effects for the worse on consumers, on businesses and the American economy itself. That is coming up next time on CES Tech Talk.

Tyler Suiters                      

We are here to help you get CES Ready. What we can ask you to do, advise you to do, strongly encourage you to do is to subscribe to this CES Tech Talk podcast, that way you won't miss a single episode as we head toward the big show. The dates for CES 2020: January 7th through the 10th in Las Vegas. The information you need to get yourself ready is at ces.tech. As always, none of this is possible without our true superstars, our executive producer, Tina Anthony, and our senior studio engineer, John Lindsey. You all are the best in the business. I'm Tyler Suiters. Let's talk tech again soon.

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