CES boss Gary Shapiro describes the coming madness of tech’s biggest trade show (interview)

Above: When Sony engineers brought out the new 55-inch OLED TV, it crashed and displayed a blue screen. Sony CEO Kaz Hirai said, “Excellent,” in his best sarcastic voice. Hirai will get a second chance this year as a keynote speaker.

Image Credit: Dean Takahashi/VentureBeat

VB: There have been a lot of IPOs in the tech industry. You’ve written about innovation in the U.S. and whether it was going to make a comeback. What are you feeling about the state of innovation in the America?

Above: 3D glasses-based gaming lived on at the Nvidia booth, where the company demoed its 3DVision glasses. But few others showed off 3D at the show.

Image Credit: Dean Takahashi/VentureBeat

Shapiro: I feel very good in a lot of ways. The U.S. is doing a lot of things right. We worked hard to get legislation passed to allow crowdsourcing. That’s positive. The U.S. system is still a positive system in terms of risk-taking and entrepreneurship and culture. We still have great universities and research that spins off. We still dominate the internet.

The warning clouds are a couple of things we discussed. Our government is causing people to distrust some of our companies, and that’s not healthy. I don’t think the companies have done anything wrong, but there will be aftershocks from that for years to come that we don’t quite understand now. We have to do something about that as a nation. There are concerns that companies have about hiring people and new laws and regulations, whether it’s the Affordable Care Act or in other areas. Our tax code is clearly an issue.

What we’re seeing with the CES is that it’s positioned for any country, any company to innovate. We have a huge delegation coming from France, as far as the number of companies and the things that they’re doing. We have events around the world to promote CES, in Tel Aviv and Paris and London. We’re increasingly going around the world and finding several hundred participants in each location. We hear a lot and we see these companies. Israel is huge. They’re the only country that comes close to the U.S. in terms of innovation, by many measures, whether it’s patents per person and however you want to define it. But France is doing very well in many ways. I’ve been impressed with what they’re doing.

The U.S. is still doing well, though, compared to just about any other company. That’s reflected in what we’re seeing at Eureka Park, what we’re seeing with exhibitors. I’ve signed so many NDA at this point I’ve lost track, so I don’t talk about anything very specifically, but what I will say is that the number of products being introduced at the show is off the chart. Companies have exciting things, exciting speakers, exciting ideas. The CEO-level attendance is off the charts as well, from around the world and in all categories.

Above: Sharp’s 85-inch 8K TV has 16 times as much data per screen compared to HDTV.

VB: What’s your sense for the consumer electronics economy? Is the industry still in a pretty good growth state?

Shapiro: Well, it’s growing. It’s a modest growth. Some areas are going down. Some are going up. Some are new. Again, people define consumer electronics differently, but I define it broadly. When you talk about automotive electronics and cloud computing and the internet of things, the show has become a huge, huge wireless show – the largest wireless show in the world. We’re doing great.

VB: Are you concerned about any categories? I worry a little bit about 4K TV and whether that’s going to be just like 3D TV, which got overhyped and went downhill.

Shapiro: I don’t worry about Ultra HD at all. It’s going to be a huge success. I was quoted in the Wall Street Journal three or four years ago saying that 3D was overhyped, that it was just a feature. I was worried about that at the time. I took some arrows in my industry for saying what I thought about it, but I am not saying that and do not believe it about Ultra HD.

Hollywood is excited about it for the right reasons. On the back of one great movie in Avatar, they and the theater owners thought they could do anything with 3D. But what you have with Ultra HD, we’re hearing from everyone in Hollywood that this thing is phenomenal. Directors say it allows them to show us what they see.

People ask me why I know I’m right. Well, I’ve been right about every new technology since I blew it with the Microsoft Bob. [laughs] I have no doubt that Ultra HD will be a phenomenal success. Beyond Ultra HD, TV in general is a great category now. Obviously it’s great for the consumer, but there’s form factors, there’s the curve, there’s OLED. There’s a lot of exciting things that will be at the show.

Above: Nest thermostats.

VB: Some of these things are maybe a few years out. Do you see anything coming on strong in 2014 in particular?

Shapiro: Everything has its time, and nothing happens overnight. That was what we had to explain about HDTV to a lot of people, and our projections were correct. With Ultra HD we have sales projections that are more gradual. We’ve taken some heat that they’re too conservative. I’m sure we’ll up them by the time it comes to CES and we do new projections.

Is something going to take over the way the iPod and iPhone and iPad did? I can’t see one breakaway that I anticipate. But there’s a lot of really unique stuff. Home control is stepping up quickly. Digital health—I ask audiences how many people are wearing one of these things. Of course, I have select audiences, but it’s usually more than half of these people. What was the year of that? I don’t know. I’m not big on one-year projections.

VB: There’s nothing like a SOPA for you to rally against at the moment.

Shapiro: Oh, yeah. I’m glad you raised that. That was a big deal two years ago. We were told we were going to lose. Senator Wyden had that press conference, and within two weeks the whole thing turned around. The thing I’m optimistic about as far as public policy is the patent reform, the troll thing, which is affecting everyone. We had an incredible bipartisan victory in the House. We’re looking for Senate action. There’s momentum. We have the leadership of both sides. We have President Obama. We’re really happy about that.

That’s the killer that any startup faces. They try and do something and then they get hit by a demand letter. Their funding dries up. Senator Warner expressed it to me directly. He said, “I funded one of these companies. They had a great product. They got a letter, and we couldn’t fund it anymore. No one could.” So there’s an understanding on both sides of the aisle on Capitol Hill that this is a huge issue. From the smallest to the biggest company, we hear about it. That’s my goal for 2014 in Washington, to get the legislation to come along.