Selling the Future

Commentary by Bob Perkins

February 2012

The Consumer Electronics Show in Las Vegas fires the imagination with all its publicity -- uncharitably termed hype -- for the latest and greatest technological innovations.  Unquestionably people are there to see and touch the hottest new products and to catch the drift of consumer tech products as revealed by the leading companies.  But underneath the hype is the real fact that this is a trade show designed to sell, regardless of how new or different the products are.  These people are here to sell the future, whatever it may be.

Don't get me wrong.  The future is very appealing, but the 2012 Consumer Electronic Show offered fewer surprises against its glittering backdrops.

Previous shows have introduced or highlighted new developments, like Blu-Ray disk players, tablet computers and 3-D everything.  Sometimes the new products can be both strikingly different -- as in last year's 3-D mania -- or widely adopted -- like Blu-Ray.  The new products at the 2012 show weren't so much previously-unseen ideas as they were logical improvements on existing technologies.

OLED televisions were among the products pitched as 2012's innovations.  Yes, organic-light-emitting-diode televisions displayed spectacular light-to-dark and saturated pictures, and the engineering behind the screen may be remarkable, but to a consumer's eye and as seen against a backdrop of thousands of large and perfectly-tuned video displays, the OLEDs looked good ... but maybe not good enough to support the high-end prices that manufacturers hope to earn.

There's plenty of good news for consumers here.  Those huge, flat and incredibly-thin screens are likely to follow the usual retail price trajectory, so after the early adopters pay the big bucks, the remaining customers will be waiting for prices to slide into their comfort zones.  Patience, in this case, is worth money.  Meanwhile, many manufacturers are finding ways to improve image quality through software and manufacturing.  The remarkable product at the 2012 show was not a single technology or brand but rather the overall qualify of television screens.  It's a big benefit for consumers in every price range and a marketing opportunity for all retailers.

Ultrabooks were the other attraction this year, but their limited display probably raised more questions than they answered.  The impressively thin and light computers, a variation of laptops and netbooks, offer an appealing combination of features and appearance, but whether they will successfully crowd out other variations is uncertain.  There were only a handful of products shown at a handful of exhibits.  These are real products that will be available to consumers, but the limited presentations seemed more like concept cars at an auto show, products you love to look at but may never buy.  The light weight, slim design, instant-on ultrabooks will be looking for consumer preference among high-capacity memory (which solid-state-memory ultrabooks don't yet offer) and cloud computing (which count on the masses of users depending on remote connections for their programs and files.)

The company that wasn't there is still the real story of CES.  Let's face it, everybody is chasing Apple.  Ultrabooks are imitations of the Macbook Air for users of the PC faith.  Tablets struggle to come up to Apple iPad's elegance.  Telephone designers are trying to catch up to iPhone or to find a different direction that will bypass Apple.

Not that Apple isn't represented in a very real way at CES.  Beyond the big hardware companies, CES is populated by hundreds of smaller businesses purveying additions and accessories for Apple products. 

Waterproof your iPad, one of many product accessories for Apple, the company that wasn't there.

The awe-inspiring display of technology products can easily divert attention from the business of CES ... which is business.  CES might be geek heaven, but look around and notice the uniform of the day is dark suits (with or without ties) and dark shoes.  The suits cluster around company representatives to talk specifics.  Onsite meeting rooms supply the privacy for distributors and retail buyers to negotiate quantity purchases.  The frustrating paradox of CES is that you can't buy just one of the charming devices on display, but you can walk out with a commitment for 10,000.

The business of CES is business. 

Selling sets the tone for CES.  Every vendor at every display is totally committed to convincing visitors that his or her product line is the best ever offered and sure to change the face of retail.  The visitor inevitably measures the products and claims against a mental scale, judging whether a product meets the vendor's claims or whether to feel sympathy for a vendor for the cognitive dissonance between the product claims and the physical reality on display.  In other words, some products are genuinely gee-whiz, some are somebody's hare-brained idea to make money and most are reasonable alternatives in the technology marketplace, but every vendor pours his heart into the pitch.

If there was an apparent theme at CES is was visual display and, more specifically, cameras.

Cameras seemed to be important components of so many products, and there were many types of cameras and accessories, such as the growing number of sports cameras, designed to capture high definition video of adventures on ski slopes, under water and in the air.  Along with the camera, there was a universe of camera mounts, to put cameras on helmets, bodies and objects.  Steadi-Cam, the product that brought studio-smooth camera movement to location action and freed Hollywood movies from the heavy camera dollies and cranes, offered models fitted to pocket cameras, cell-phones and tablets.

Send me back to business school.  In cameras and other products, there were illustrations of the kinds of choices -- and mistakes -- taught in business courses.  Prominent camera brands returned in giant displays featuring products from high-end professional cameras and lenses to pocket models for consumers.  The newest concept, single-lens reflex-design, mirror-less cameras with electionic viewfinders and interchangeable lenses, is slowly making itself apparent, and illustrating both the opportunities and challenges with new product development. 

For digital photography enthusiasts, the extension of image quality has been a slow and expensive process, as companies use advances to render aging products obsolete and to entice customers to buy the new, better and more expensive replacements.  The image resolution of consumer cameras has taken a tantalizing journey, with on-the-shelf products holding around the 12- to 16-megapixel range.  For the ambitious amateur or the professional, significantly higher megapixel ranges have been available, but they cost thousands, or tens of thousands, more. 

Nikon reportedly has decided to protect its high cost single-lens products -- the digital versions of film SLRs -- against internal competition by positioning its electronic viewfinder cameras at lower resolutions, selling on style.  Those small new, primary colored cameras and elegantly tiny accessories are fashionable but miss the potential to deliver better quality photos.  Meanwhile, other companies are offering cameras and camera-using products with equal or better quality.  For instance, Sony previewed new cell phones that will include 12-megapixel cameras.  Getting a jump on Nikon, Sony also displayed electronic viewfinder cameras delivering 24-megapixel quality at a price of around $1,300.  The questions for marketing will be whether consumers will perceive value in higher quality pictures -- has image quality hit a plateau at "good enough"? -- and whether home computers and editing software have kept pace with the memory demands of larger image files.  The choice for some consumers will be to upgrade other digital products to take advantage of new camera upgrades.  But then, that's the point of product development and product line extension.

The echo of business school case studies was also evident at CES in the Kodak display.  While this icon of American imaging was sliding into bankruptcy, company representatives showcased Kodak's line of printers.  The company synonymous with cameras and film and the company that invented digital photography famously decided to protect its cash cow, film, and bypass the digital revolution until too late.  Similar in some ways to Nikon's choice, above, to protect a profitable market segment, Kodak saw its core business collapse.  Instead it embraced the commodity business of consumer printers and ink, a me-too choice that trades mainly on a famous name and a trademark known world-wide.  It seemed a sad conclusion for a company that many a photographer remembers as an old friend.

With news that Microsoft will not return to future editions of CES, an undercurrent of discussion was where the future will take the show.  The show might shrink, but it's hard to imagine it moving to another venue or disappearing.  Las Vegas is the perfect venue for a show like this.  The city offers a unique combination of services and attractions that would be hard to replace anywhere else in the U. S. at this time of year, and the Las Vegas Convention and Visitors Bureau goes all out to accommodate the Consumer Electronics Association and its members.  There are similar shows around the globe, but for America's place in technology and sales, there seems to be no reasonable alternative.  The sad thing is that the complete absence of key players like Apple and, eventually, Microsoft, shortchanges the industry and undermines an important occasion.

In age of techno-thinking, there are questions about the need for a show of this type.  Everything, we are told, can be done online and via digital communication.  As appealing as technology's substitutes have become, there is no substitute for the physicality of CES.  First there is the psychology of being there.  This is an event so big you can't see all of it.  The excitement of being in the crowd and jostling for a first look at glittering products means something to people in business.  Most of all the show delivers the invaluable opportunity to touch products and people.  Reminiscent of Apple-founder Steve Jobs' need to handle product prototypes, technology business people need to see, feel and try the products ... and CES offers a universe of products all at one time and place.  Ultimately, the face-to-face experience is irreplaceable.  Students of human behavior understand that teleconferences, text messages and telephone calls are unequal to face-to-face meetings.  Predictions of the demise of CES and shows of its kind are, at best, premature.

CES is about selling, and as long as there is a future, there will be a need to sell it.

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E-mail BobPerkins@redshift.com

Wednesday, February 15, 2012 10:57:50