Lessons from 15 years of change at CES

Lessons from 15 years of change at CES

LAS VEGAS—I’m here for my 15th annual CES. That is a possibly scary number: I’ve yet to spend more than 15 years in any one home.

A great deal has changed about this show since I stepped off the plane at McCarran Airport in 1998 and encountered the first of many long taxi lines. The exhibit space has sprawled outward; the laptops of reporters have gotten lighter and smaller; the total bandwidth consumed has escalated exponentially.


While this year’s show was getting into gear, I was mulling over these changes and what they mean for the industry as a whole.


Decline of the defining product.


Back when its official name was still the Consumer Electronics Show, you could define each year’s show by the genre of gadget that dominated it. In 1998 digital TV took the stage; Blu-ray had its turn on the runway in 2004.


But the last such defining category was 3-D TV, the big deal of 2009—which has since proved to be a much smaller deal for consumers. You can blame part of that on the declining role of new physical-storage formats in the electronics industry; companies like Amazon and Apple also get credit for reinventing the e-book reader, smartphone and tablet away from CES.


Either way, CES looks less like a showroom and more like a bazaar. Since I think a decentralized market offers more openings for innovation, I’ll count that as an upgrade.


A lead actor loses the limelight.


You also could count on one firm landing in the bulk of the headlines about CES: Microsoft. Its keynotes kicked off the show, and its product launches set many other firms’ agendas. But between such high-profile flops as SPOT smart watches and the less-public but more significant failure of its effort to make its Windows Media formats industry standards, this company no longer moves the market as it once did.


So I was less than shocked to see Microsoft announce that it would no longer keynote the show, although its decision to stop exhibiting was more of a surprise: In Windows Phone 7 and the upcoming Windows 8, the company seems to have some good stories to tell.


(Note that, as CEA’s Jason Oxman wrote here earlier, Microsoft will almost certainly continue sending executives and engineers to the show.)


Our eyes wander from big screens to small ones.


From 1998 onward, TV screens got larger (and flatter) at every CES. But as the size of an affordable flat-panel set steadily expanded, a funny thing happened: The smallest screen we carry, the one on our phones, got a lot more interesting. It brings us the Web, it steers us home, it runs a growing universe of apps, and it even plays video. The smartphone may even help make the big screen more useful: An app on my phone lets it double as a remote control for our Blu-ray player.


Everything will connect to the Internet.


Because the cost of adding connectivity to a device has collapsed while the bandwidth available in many homes has broadened, it’s getting to be an assumption that anything big enough to have a remote control will incorporate an Ethernet port or a WiFi receiver. Those have helped to liberate Web media from our computers; they’ve also made it easier to keep hardware up to speed with updates from manufacturers.


Sure, some of this gets a little ridiculous. The WiFi-connected fridge I saw last year certainly seems a bit much—but you know, I wouldn’t mind seeing a major appliance report its electrical consumption to me over the Internet.


Marginalization of audio- and videophiles.


News flash: Customers have voted overwhelmingly for portability over purity. The successor to the CD turned out not to be the ultra-high-fi SACD and DVD-Audio formats, but MP3 and AAC files that sound no better than the CD, while the future of video looks increasingly like digital streams and downloads instead of optical discs.


There will always be a market for high-end audio and video—this year, I expect to see many “4K” screens with four times the resolution of HDTV—but those products no longer mark the outlines of the average customer’s aspirations. And that represents an enormous shift in how the business has been able to present itself.


Green is a go.


You’re well advised to be a little skeptical of manufacturers claiming a newfound environmental sensitivity. But from what I’ve seen, the change is real: Eco-marketing has gone from simply claiming an Energy Star certification by the Environmental Protection Agency—something that hasn’t been that hard to obtain—to offering hard numbers, as I saw three years ago when TV vendors began showing off sets with power meters to report their electrical consumption.


Cooperation isn’t.


Sadly, the electronics industry hasn’t lost its appetite for format wars. Standards continue to arrive late (a pointless dispute over memory-card formats only ended in 2010) or not at all (you still can’t buy a TV that can tune into cable or satellite service without the help of an external box).


This history of self-inflicted conflict makes the industry’s biggest success at standardization over the last decade—the HDMI cables that carry audio and video between most of our gadgets—look even more remarkable in retrospect.