CES is changing.
CES 2013 is undoubtedly a success, with a record number of exhibitors, attendees, and press attending the conference. Companies have shown off their newest gadgets, announced milestones, and spoken of their futures, as the mountain of press pore over every detail, while writing furiously to meet their deadlines, as is usual during the early weeks of January. But for a tech conference like CES, there is a worrisome trend in the industry. The current two-part shift that is occurring in the tech industry — and what could ultimately lead to the decline of the super tech conference brand in general — is the downturn of significant hardware innovation, and the rise of major software and service companies over the last few years.
In terms of hardware innovation, the last truly surprising and creative product to be unveiled at CES was the Palm Pre, back in 2010 (I know that doesn’t sound right now, but at the time, it was a huge deal), months before Instagram was even invented. Since that time, CES has shown us an unconscionable number of television sets, be it either 3D or 4K, or 4K 3D (yes, it does exist), a flurry of cheap tablets that will never see the light of day, or if they do make it out, will end up near the counter at your nearest local drug store.
There are, of course, still successful product announcements and releases during CES (see: DSLR cameras), but what this trade show has delved into is a wonderful place to meet with colleagues and business partners. During a SuperSession moderated by Joshua Topolsky of The Verge, Topolsky asked Hulu SVP Andy Forssell what Hulu was doing at CES, as they didn’t have a booth and weren’t showing off any products, and Forssell said, “We’re here [be]cause we have so many hardware partners, and this is an efficient place to come talk to them.”
Instead of continuing to be the premier destination for unveiling new hardware products, CES is quickly becoming tech’s version of the Allen & Company Sun Valley Conference, which may not be a bad thing.
There is no other event on Earth that draws this many tech companies, analysts, and journalists to one place, for one week. At CES 2013, I’ve met with journalist friends from South Africa — who I only see at this conference — spoken with analysts from Europe, and met with executives from Hong Kong, all in the last few days, a feat that would take an obscene amount of money and an ungodly number of hours flying to accomplish otherwise.
Of course, CEA President Gary Shapiro and company aren’t aiming for CES to dilute into the world’s biggest meeting of tech geeks, with no significant product announcements or releases, but as much as they would like to believe otherwise, they may not have a say in the matter. The big five companies of tech; Apple, Google, Facebook, Amazon, and Microsoft don’t exhibit at CES. Apple hasn’t officially been on the show floor since 1992. Microsoft stopped maintaining a booth and conducting its annual keynote after CES 2012, although CEO Steve Ballmer made an appearance during the somewhat strange and trollish (it’s the only way it makes any sense) Qualcomm keynote. Another issue for CES is the social and service companies like Facebook, Twitter, and Instagram would never even consider attending CES.
Over the past couple years, the tech world has increasingly made substantial leaps in software innovation, while the hardware sector seems to have hit a plateau. Facebook has over 1 billion users, Twitter has become the fastest news outlet on the planet, and Instagram, which didn’t exist three years ago, has over 100 million users. None of these companies have ever attended CES in an official capacity, a bad indication for the major conference, as social and service startups become more and more prevalent and crucial. CES can forget about attracting a strong contingent of social and service startups, as they tend to care less about schmoozing with analysts and other executives (unless they are attempting to raise a round), and more about connecting with users, who are accessible from any device with an Internet connection.
The larger issue for CES is the hardware downturn. We are currently in a decrescendo of hardware innovation. We’ve reached the point where smartphone screen quality has progress to the point that the difference between the iPhone 5′s Retina display (326ppi), and the Droid DNA’s 1080p display (440ppi) is negligible. Laptops have gotten as thin as humanly possible, and TVs are in the beginning stages of the shift to 4K, but no one can get 4K content. The high-end camera market may be in its golden age of creativity and innovation, but that market has considerably shrunk due to the proliferation of quality smartphone cameras.
So where does CES and shows like it head from here? They will have to accept that they have become the default meet-and-greet location for industry executives who need to discuss business, and the journalists would like to interview them. Make no mistake, tens of thousands of articles will be authored, thousands of products will be announced and hundreds will be released, but the glow of innovation has been dimmed over CES.