40 Years Of CES: Q&A With CEA Chief Gary Shapiro

Gary Shapiro, the CEO and president of the Consumer Electronics Association, is gearing up for his 26th Consumer Electronics Show, the largest trade show in North America. To prepare for the event, set for Jan. 8 to 11 in Las Vegas, Shapiro last weekend bought a new pair of triple-padded Johnston and Murphy shoes. With more than 2,700 exhibitors spread over 1.6 million square feet, not to mention 150,000 attendees, Shapiro's going to need the support. Last year, Shapiro's assistant, who shadowed him as he made his way through the show, wore a pedometer AND registered 10 miles in one day. This year, Shapiro might need two pairs of those shoes. Shapiro recently spoke with Emerging Markets Editor Jeff O'Heir.

CRN: It's interesting that one of this year's keynotes, Cisco Systems Chairman and CEO John Chambers, is said to be focusing his speech on using the Cisco name as the overall, overriding brand for all its subsidiaries that target the home market, such as Linksys and KiSS and Scientific Atlanta. What does that tell you about the state of today's consumer electronics (CE) market, when the company that provides the networking backbone for major enterprises now says it wants to be associated with home hubs and routers, networked DVD players, mobile devices and set-top boxes in the home?

SHAPIRO: The CE industry is hot; that's the bottom line. The average American family owns 26 CE products, and they're spending $1,500 a year on those products. It's kind of the centerpiece. Twenty years ago, it was business that drove technology; now it's consumer purchasing that is driving technology. I look forward to John Chambers' keynote for that reason. You're right—they're a business technology company, and they've decided that the home is the hub.

CRN: One of the most interesting things that came out of CES last year was the report by Forrester analyst Ted Schadler which, in a nutshell, said billions of dollars were being left on the table because manufacturers and retailers insist on marketing their products as stand-alone, plug-and-play devices instead of marketing them as part of a full solution that requires the expertise of a professional installer or integrator. Is there anything at this year's show that reflects the change in that one-off mentality?

SHAPIRO: On one hand, as digital television prices have gone down radically in the past several months, consumers are doing cash and carry—they're not buying accessories, they're not even paying for installation, they're walking out the doors and installing it themselves. I've heard more stories in the past 24 hours about that, given these Thanksgiving sales.

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From the perspective of the industry, there is profitability being lost as you lose the installation opportunities and accessory sales. Who knows whether these consumers are really hooking up digital Dolby surround sound and taking advantage of it. There are more and more products being invented and sold that require some expertise to set up, and I think there's a phenomenal opportunity on the installers' side to sell a full solution. When you see a Best Buy and Circuit City both getting into installation solutions, they're responding to a real need from consumers who say, I want this stuff, but I don't want to set it up. Best Buy always seems to take it up a notch with their Geek Squad and institutionalizing it. I think there's a demand for that. The array of products coming along are not going to be any simpler, especially as we shift to sensor devices and more stuff that can interrelate and work with each other.

CRN: You mentioned at the CES preview in New York how the sale of a digital camera stops with the camera, instead of including all those other great products that could go along with it. What should retailers and dealers do to increase the full solution sale?

SHAPIRO: When you take a great product like a digital camera or a digital television set, there's a phenomenal opportunity for a trained salesperson to do it right, that's why we have this whole CE know-how Web site that allows people on the sales floor to ask the questions, qualify the customer and make sure the customers' needs are satisfied and let them know what's available. Unfortunately, it's a case of the consumer not knowing what else is available besides the basic TV or camera purchase; there are a lot of other things out there that will serve their needs.

CRN: What do you think it will take for the Media Center PC to gain a more prominent role in the networked home?

SHAPIRO: Maybe it takes something revolutionary, but I think it will probably be evolutionary, based on what kind of software comes along that makes it more usable and less likely to crash; things like that. I think computers have uses as a storage device and for individual viewing needs, but it goes back to the TV being the center of the home. I think hooking up your computer to your TV set isn't the coolest thing in the world for a lot of reasons, but you can get a TV signal over your computer fairly easily now, it's getting easier almost every quarter.

There are cool products always being introduced that do cool things. There's a natural evolution there that I still think has not been determined. It's realistic that it can occur, I just think when consumers see that 'fatal error' message, their hearts stop.