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Gary Shapiro is the showman of the greatest technology show on Earth. As the president and CEO of the Consumer Technology Association (CTA), he presides over CES, commonly known as the Consumer Electronics Show. CES 2018 is just around the corner, running from early press events starting on January 7 through January 12.
The big tech trade show drew 184,498 people earlier this year, and Shapiro is planning for another record-breaking event in January. The show will likely have more than 4,000 exhibitors across 2.6 million square feet of exhibit space, though final numbers will be out later. I talked to Shapiro in our annual ritual, getting a preview of the event that sets the tone for the tech industry for the coming year.
More startups will be coming this year to the Eureka Park section of the event, which will have 800 companies compared to 600 a year ago. At least 118 government leaders will be there, and many of them will be engaging on the topic of net neutrality, which the FCC is in the midst of dismantling. I’ll be among the 7,000-plus media at the event.
Some facts about the show: The drone section of the show floor will have 47 exhibitors, up 15 percent from last year, across 38,550 square feet, down 1 percent. The robotics section will have 35 exhibitors, up 30 percent, across 21,500 square feet, up 68 percent.
Augmented reality will have 24 exhibitors, up 20 percent, across 10,900 square feet, up 30.5 percent. Gaming and virtual reality will have 46 exhibitors, down 36 percent from 72 last year, across 37,500 square feet, up 26 percent.
VB: What’s your take on the show and what it’s going to be like?
Gary Shapiro: Well, I don’t want to sound repetitive from prior years, but the truth is CES will be a record setter. It’s clearly become a global stage for innovation. Last week, we determined that our footprint for 2018 is now larger than the footprint for 2017. We do estimates in terms of the number of attendees and things like that, but we really don’t know until after the show’s over, and we have an audit done independently. But in terms of footprint, we’ll be bigger. Last year, we were about 2.6 million net square feet. This year, we just surpassed 2.6 million net square feet. It will be bigger. The official stat is more than 2.6 million.
We’re projecting 4,000 exhibitors, and we were just about 4,000 last year, but because there’s aggregators and a lot of last-minute things, we don’t really have good final numbers. It’ll be comparable to last year. But in terms of size — we’re different from Europe, where they count up everything. We just count up actual sold space. Europe counts vertically while even if you have a three-story exhibit, we just count your footprint. So, we’re bigger.
We don’t know if we’ll have more international people or not because we’re keeping an eye on the fact that — the first six months of the year, international visits to the U.S. have gone down pretty significantly, especially business visitors, which are down about 10 percent. One-third of all the people came from outside last year. We’ll have more than 100 foreign delegations. We’re expecting ministers from France, the Netherlands, Mexico. We have major brands attending the show, 76 percent of the Fortune 100 and 93 percent of the Interbrand 100.
VB: How about the startups?
Shapiro: Eureka Park, one of my favorite parts of the show, we’re expecting it to grow from 600 startups in 2017 to 800 in 2018. It’s a buzz area. There’s a lot of countries now participating, 37 countries. Those countries sometimes come with some pretty cool people. France, where we had 5,000 people come from last year, we’ve had a lot of ministers, including Emmanuel Macron in prior years. This year, we’re expecting a lot of very senior government officials from France. We’ll have the prince of the Netherlands, and the Netherlands will have a significant presence in Eureka Park and elsewhere.
We’ll have a lot of government officials, talking about who’s coming. Last year, we had about 55 government officials at this time that we could talk about. Right now, we have 118, including members of Congress, the entire FCC, the FTC, the chairmen and all the commissioners. We have top elected officials from a number of states. We have international officials from several countries — Colombia, Nigeria, Taiwan, Togo, France, and others. People from the White House, the Senate, the House, about every government agency you could name.
There’s increasing focus on life-changing and life-saving innovations. A lot of disruptive technology. A lot of empowerment of elderly people and people with disabilities. A lot of good things. We have a sports zone that’s focused on sports technology, including stadium technology.
VB: What are new categories?
Shapiro: We have a huge focus for the first time on smart cities at CES. If you talk to a number of major companies, they’re very excited about this. We have more than 40 exhibitors and 12,000 square feet showing smart-city stuff. There’ll be conferences, parts of other exhibits talking about this. This is tied to 5G and what we all know is coming. This is an area that’s a first at CES, and when you talk to me a year from now, it’ll be even bigger. Artificial intelligence is very hot throughout the show. We have a discrete area focused on it with 15 companies, including IBM, Baidu, and Yamaha.
For the first time, we’ve tried to make the show so that anyone with an idea can implement the idea through the services and the companies at the show. If you have an idea for a product or an app or anything, we have an area called the Design and Source Marketplace, which will have more than 700 exhibitors. Most of them were exhibitors from other countries where they were offering manufacturing. They’re not pushing brand names. They have the fact that they can make stuff. There’s also designers, product creators, and others. That’ll be in a temporary structure, a very big one.
We have a special high-tech retailing summit. We have a digital money forum. In terms of noteworthy growth, the one that sticks out to me is the vehicle technology. That’s had 23 percent growth in footprint, 19 percent growth in exhibitors, 401 exhibitors there as of today. I was asking our research department if we were a car show, where would we be? We’d be in the top five, I believe, right after the Detroit Auto Show, in terms of size. But that’s not a precise number. And the car shows are public shows. They’re almost exclusively finished product, and we’re the entire ecosystem of products.
We have C Space, which we started a few years ago, and now, it’s become the CMO stopping point. We have content and new platforms and technology meetings. We have 41 exhibitors in 137,000 square feet of space there, with a number of companies doubling their investment. Amazon and eBay are advertising. Google, Hulu, and Spotify are increasing their participation there.
VB: What are the top trends in tech?
Shapiro: In terms of trends, a lot of the talk last year was obviously about Amazon’s Alexa. Now, it’s gone way beyond that to other platforms. Voice and speech recognition is pushing into the mainstream. It’s getting into cars and elsewhere. The accuracy of speech recognition used to be maybe … 80 or 75 percent in the last few years, and now, it’s over 97 percent. It’s going across all devices. This Thanksgiving season, it’s become the fourth sales channel. We have digital assistants like Alexa and Google, that’s how things are changing.
I mentioned 5G. It’s still early, but companies will still be talking about it and showing stuff about what they could do when you have a network that’s five times faster and five times more responsive.
VB: Did anyone try to do a 5G demo at CES? I know they’re doing some for the Olympics.
Shapiro: For this event, I do not know. They’ll be talking about it. Whether they’ll be showing — I’d expressed some skepticism at one of our member meetings in October about whether there would be anything in 5G, and debate broke out between my members. But I just don’t know. I do know that in 2019, there will be a lot, but in terms of what we have in 5G right now, if there is stuff, it’ll be more prototypes, more talking about it and planning for it. I guarantee it’ll be much further advanced in 2019.
I mentioned smart cities. We released research in Europe recently showing that a lot of European cities are ahead of the U.S. in that area. There’s a huge shift in the world where the city is getting bigger. People are moving into the city. Today, more than half the world lives in cities, and soon, that will increase to two-thirds. Fifty years ago, only one-third of the world lived in cities. There’s a lot of changes happening there. That’s where you have 5G, self-driving, and AI meeting.
Voice-assisted smart speakers, a lot of companies there — Panasonic, Sony, Amazon, Google. We expect to see 360-degree room-filling sound, single deployment stereo products, all sorts of stuff. And then, there’s AR and VR. You’ve written a lot about it. It’s growing. Biometrics, there’s a lot there for security and authentication.
VB: Do you have any figures on the AR/VR section and how that’s changed over the years?
Shapiro: We are up. We have 23 exhibitors, 11,000 square feet, up five percent. That’s all just AR, not VR. I can follow up with specific numbers for VR. We’re also up in the smart-home marketplace, up 30 percent, with 189 exhibitors and 123,000 square feet. We’re up in the robotics marketplace, which I think is going to keep growing and growing, up six percent there. There’s huge growth, obviously, in gaming, all the accessories connected to it.
The one that was interesting this year at our board meeting, with board members giving their personal experiences with major retailers around the country, was AR and VR and all the accessories that go with it, and the high-end computers that are being sold. That was pretty big. That’s a huge trend, obviously.
VB: What are some of the issues you see this year at the forefront?
Shapiro: We have a whole policy track. Last year, it was standing-room only. When we had our debriefing after the show, I said, “Wow. I remember I used to do that, and we’d have more members of Congress than we had people in the room.” Maybe it’s because of the election last year, but people were really focused on it.
We have a huge number of people coming that want to speak and a lot of issues. Cybersecurity we’ll have a focus on. Some of it is category specific — like self-driving cars, where we have a lot of senior people coming from the Department of Transportation. We have Lyft speaking, Ford speaking in visible positions. We’ll have panel sessions. There’s legislation before Congress right now on self-driving. It’s bipartisan, which is why you don’t hear a lot about it. But it’s moving.
Net neutrality will be a big issue. FCC Chairman Ajit Pai was a speaker at an event I was at last week, and there was a huge amount of security. It’s a very emotional issue. It’s an issue that the CTA — I wouldn’t say we have not engaged on it, but we’ve made the argument that competition in broadband would be really important. The other area which is important, we’ll be releasing, as the CTA, the Innovation Scorecard on a global basis. We’re ranking different countries. Not all countries, but the countries for which we have data available.
VB: Going back to net neutrality, I guess it’s safe to say it’s a much more emotional topic this year than a year ago.
Shapiro: It’s emotional because a lot’s going to happen in the next couple of weeks. Last year, it was a done deal and people were just — I don’t know if we had a panel on it. The year before, when the Obama administration changed the voluntary adherence to net neutrality principles, it became a big deal. Now, obviously, the Republicans are going the other way. It’s an interesting dynamic because on the one hand, it’s a Republican position, but it’s changed since the last debate.
It used to be that people would say the tech industry thinks net neutrality is critical, and now — we had a meeting of our carmakers last week, and they think the use of Title II for net neutrality is of great concern because it does say no prioritization. It regulates anything that hooks up to the internet. A car hooks up to the internet now. That’s what’s changed in a few years. If you have the task of regulating that, how can you say there shouldn’t be prioritization when it comes to safety? That’s a compelling argument, if that’s the basis of your self-driving car, its access to the internet.
Some of the arguments have changed, and some of the players have shifted. It’s become more of a populist issue. I don’t think the tech industry is that pure. From our point of view at the CTA, I can say that Title II is definitely not our preferred course for net neutrality. I worked on the principles 15 or 20 years ago, walked in the FCC, and was so happy that everyone accepted these as voluntary principles. I think we’ve been phenomenally successful since then. I begged the chairman of the FCC not to go forward. We have embraced what we call “regulatory humility.” The person who coined that phrase will be at CES, the acting head of the FTC, Maureen Ohlhausen. Don’t mess it up by trying to anticipate the flow of innovation and technology. Let’s show some humility. Government has an important role to regulate, but let’s make sure there’s actual harm.