The annual Consumer Electronics Show is held in the first week of January in Las Vegas. It is an enormous show, with over two miles of aisles to walk, and a projected 170,000 people in attendance this year (up 10,000 from last year). To put that number in perspective, slightly more people visit CES than there are hotel rooms in Vegas. It has pretty well maxed out in size because of that.
When you allow for all the normal visitors to Vegas too, the show really does overload the city every possible way. Hotel prices go sky-high, at some times of day there are no cabs to be seen, if you want to go to major shows or restaurants you’re completely out of luck, and for anyone other than a dedicated CES participant, you’re best advised to stay well clear of the city.
Yes, the show has truly become ‘too big’, and these days it isn’t really just one single show, but a series of somewhat related shows, all mixed together. You’ve got major household appliances (a ‘smart’ fridge for $5000 being one such thing this year) alongside junk cell phone accessories (protective cases, replacement batteries, etc) alongside high end home theater (huge sized 4K screens) alongside strange displays from OEM component manufacturers from China with the booth participants struggling to speak English, alongside computer hardware and software of all types, alongside cars with sound systems powerful enough to deafen the Dodger’s Stadium, and adding a surreal note to things most years is the simultaneous annual convention of the adult entertainment industry.
But, as disparate as the many different aspects of the show are, most years it is possible to discern a ‘theme’ to the show – something that is generating the most buzz, something that seems most likely to capture the public’s imagination and become the next ‘big thing’ for the year ahead. Last year, it was probably drones or maybe smart watches, the year before, 4K televisions, and as we go further back, 3D televisions (a market failure, as I predicted), tablets, and, well, further back no longer really matters.
Even if there is no clear ‘big thing’, writers love to invent one, because it gives some purpose to their writing about the show, and it becomes a bit of an ‘inside game’ among journalists to try and anoint whatever as the ‘big thing’ of the show.
But this year – on the surface – there was no clear big thing. Sure, there are loads more drones and 4K televisions, but they’re no longer ‘new’ and are little improved on last year, and as for smart watches, the stunning silence on that subject speaks more loudly than any degree of hype could about the failure of that product category. Not even Apple has been able to make smart watches a ‘must have’ device – and in any case, their ‘Watch’ is now long in the tooth (first announced in September 2014)and expected to be replaced with a new model, to be announced perhaps in March.
Electric cars are getting some extra exposure, but most of the electric vehicles on display are either impossibly futuristic (the 1000 hp 200+ mph Zero1 from Faraday, for example) or else no longer startlingly new or exciting (the Chevrolet Bolt, which while probably going to be a fine car, is neither new nor compellingly exciting in any respect). Last year saw fewer electric vehicles sold in the US than the year before, probably in large part because of depressed gas prices, but in equal part to the fact that there’s not yet an electric car that is simultaneously practical in terms of range and recharge times and also a sensible/affordable value. Sure, we’d all love a Tesla, but their cost quickly breaks into six figures, and their new Model X can exceed $150k for something that – for most of us, most of our uses/needs, and most of the time, is only somewhat better than, say, a $40,000 Ford Explorer. Besides which there’s something like a nine month wait to buy one.
And So – This Year’s Big Thing?
To my mind, the ‘big thing’ for the 2016 CES isn’t something that we’ll be putting under the tree this Christmas, nor the next, nor the next. But it is something that will be profoundly transformative, but probably won’t start to be measurably impactful until 2020.
Something that is increasingly being talked up – even though it seems ill suited as a topic for CES – is the predicted shift in people’s car ownership patterns.
Private car ownership has been one of the things that has distinguished the success of the US in contrast to the failures of less free-market economies elsewhere in the world. Our cars and our freeways on which we drive them are an aspirational element of the American dream – something we love and the rest of the world envies. Plus, our economy is built, directly or indirectly, so strongly on the foundation of the auto industry, so it is something we’re encouraged to do at many different levels. But private car ownership seldom makes any sense – or, perhaps better to say, it is ripe for optimization. Most people use their cars about 5% of the time – in other words, about one hour a day. A car is typically the second most expensive thing people ever buy, but up until now, allowing such an expensive asset to sit idle and steadily lose its value for 95% of the time, and to lose its value at an even faster rate when being used, is something we’ve accepted without question.
The new ‘sharing economy’ is being heralded as leading the way to a point where people will be happy sharing a car rather than owning it. Intelligent self-driving cars will be able to come when called and arrive quickly, even more conveniently than calling a cab. You then have the use of the vehicle for as long as you like, perhaps paying an hourly and per mile usage fee, and when you’re finished with the car, you just park it, anywhere, and walk away. You don’t even need to park it. Just pull over, get out, and wave it goodbye. It will merge back into the traffic and go somewhere/anywhere, all by itself.
If you’re going into the city for an evening by yourself, you’d ask for a small car to get you there – and maybe the intelligent car coordination system would even put you in a ride-share with someone else. If you were going to the hardware store to buy some bulky supplies, you could get a pickup or SUV for the afternoon. And when the entire family was going to do a roadtrip during the summer, maybe you’d treat yourself to a large comfortable powerful car. No longer do you need to own three very different cars for these three different purposes. You don’t own anything at all, but quickly and conveniently, whatever form of transportation you need is made available to you, at a tiny fraction of the cost of ownership.
You’ll also be saved all the hassles of car ownership. No need to arrange to take your car in for servicing. If it breaks down, leave it by the side of the road and summon another car to replace it. Your 600 sq ft two car garage can be repurposed and used for something else.
If this allows a easy halving or more exciting quartering of our vehicle costs of ownership, wouldn’t that be a financially transformative thing for many of us? It also means that two car (or three, etc) families could save even more than a single car family would.
This concept is still some years from reality. It requires self-driving cars to be able to come to where you want them, and all the infrastructure to support the management of huge fleets of cars and their locations and dispatch and so on.
But the next vehicle you buy could well prove to be your last. Private car ownership might devolve down to something unusual, for hobbyists, collectors, and the very rich.
Give it five years. You read it here first.