Because iLounge has a special partnership with CEA as the organizer of the iLounge Pavilion, I’m not able to discuss everything I know about what has taken place with Microsoft’s exit from CES keynoting starting next year (see CEA’s Digital Dialogue for the official discussion). However, based on my understanding of how CES has been doing as an event, I wanted to offer my personal insights into what is actually taking place right now, and what the future holds for CES. This is purely my personal take, and has neither been approved nor vetted by CEA.
As both an exhibitor and a participant in covering CES, I’ve been amazed over the past several years by the show’s continued growth and resilience in the midst of a global economic crisis. Retrospectively, the reasons for this seem obvious: demand for consumer electronic products has continued to be extremely strong regardless of everything else that’s been going on. But every year, the area of the show that’s of interest to us grows larger, and attendance has gone up. The 2011 show had over 140,000 attendees, a number that was audited and confirmed rather than just estimated and fudged; it’s really remarkable when you consider what it takes for a single event to draw that many people.
The iLounge Pavilion has shown particularly incredible growth. Originally, there were 100 Apple-focused companies in our area; last year, there were 200 companies, and this year, there are well over 300. CEA keeps allotting more space for the Pavilion, and the demand just continues to grow beyond everyone’s expectations; iPod, iPhone, iPad, and Mac products will now occupy around half of an entire Las Vegas Convention Center hall. This tracks with what’s taking place in the broader marketplace—interest in Apple-related products is at an all-time high, a marked contrast with what’s going on with Microsoft. By contrast, the products Microsoft has shown at CES have been puffed up as Apple killers time and time again, only to disappear abruptly or fade gently out of the marketplace.
To hear Microsoft explain its decision to fade out of CES keynoting and formal exhibition, you’d think that it had been inspired by Apple to take control of the timing of its events, an assertive posture hinting at growing importance and strength. But Microsoft isn’t Apple, and it can’t just clone Apple’s old explanation for pulling out of Macworld Expo to justify its exit from CES. Apple claimed it was leaving Macworld Expo because it was able to reach customers directly through its huge and growing network of retail stores. Apple provides customers with hands-on access to virtually all of its new products within days or weeks of announcing them. And behind the scenes, Apple had an ailing CEO who wasn’t up to the task of doing the sort of extensive, passionate presentations he once did.
Microsoft’s in a different boat. It doesn’t own a huge network of stores to show off new hardware. Putting aside its Xbox business, which it generally spotlights at separate events such as E3, it has a history of announcing products well before they’re shipped, and in some cases, announcing products that have very modest actual sales potential—Surface, anyone?—even if they were sitting in stores the next day. And it doesn’t have a superstar CEO capable of turning even modest announcements into international news stories. One could argue that, but not for its CES keynotes, Microsoft would have had a lot of trouble generating attention for its minor product debuts. How many mainstream journalists would fly out to Redmond on their own dime to hear about a new version of Office? Or even the latest Windows smartphone or tablet? How will journalists feel about attending future Microsoft events after the last one’s “news” wasn’t exactly awe-inspiring? And for that matter, where’s the Microsoft excitement on the consumer side? Will Microsoft be able to get users to show up at its stores if it stops giving out free concert tickets? Far from being disposable, CES seemed like an ideal venue for a company such as Microsoft—one of the only places in the world where media and high-level customers were guaranteed to be there already to hear whatever it had to say.
Another benefit exhibitors get from trade shows such as CES isn’t obvious to attendees, but it’s critically important to the exhibitors: the opportunity to focus. Leading up to CES, development teams and executives are compelled to finish up new products—or create a coherent explanation for an existing lineup of products—in a manner that benefits the entire company. A trade show motivates the company to sharpen their development and marketing efforts to the point where they can be unveiled to the public, including critical media members and possible distributors, generating initial feedback and in some cases free publicity. Even for Apple, a company that has done an extraordinarily good job of creating compelling products before conspicuously discussing them with users, trade shows enable bi-directional communication that can positively influence subsequent development and marketing efforts. In the wake of Apple’s withdrawal from Macworld Expo, some Apple employees suggested that they were genuinely disheartened by their resulting inability to personally communicate with partners and customers at the event. It was no surprise, then, that even the post-Macworld Expo Apple sends members of its teams to CES to speak with partners and prospective partners, or that other companies tell us that they continue to appreciate the feedback they receive from the people they meet at CES. They’re particularly glad to be hearing from the more sophisticated users CES attracts—people who are beyond the first-level questions and insights average fans typically show up with at smaller events.
It’s also worth noting that even Apple’s own positions on trade shows and the seasonal timing of announcements haven’t been as firm as one might have imagined after its decision to stop attending Macworld Expo. The company has continued to make announcements in the January/February time frame that could very well have been made at a trade show. It still has people attending trade shows, albeit without its once awesome black booth to serve as a mecca for showing off its own products. And it has even done a keynote-style presentation at a trade show, namely the unusual Final Cut Pro X event it staged earlier this year, which looked just like something it would have done in Cupertino. Ironically, however, that event led to worse coverage and less publicity than Apple otherwise would have received; the best coverage was actually provided by Twitter feeds and iPhone camera snaps from attendees such as Rob Imbs, rather than members of the media who would likely have shown up with better tools, delivering even better video feeds and photography from the video-focused event. Reasonable people can disagree about whether Apple needs to attend or do keynotes at trade shows, but it’s clear that the company hasn’t withdrawn as completely from them as it once suggested it might, and that its current approach has had some consequences.
Regardless of whatever Apple is doing, Microsoft—and most of the rest of the consumer electronics industry—don’t have a similar luxury. Apple has uniquely been able to get media to show up at their own expense wherever and whenever it holds an event, sometimes without specifying what will be announced at the event. Only a handful of companies can pull this off on occasion, and not for minor product announcements such as the release of a single phone or a single computer. Even then, only a handful of specialist press will even consider going, and then there are questions as to whether the event was junketed—journalists are attending on the company’s dime, sometimes without disclosures to reader—an issue that remains ethically problematic, and a problem for many professional members of the press.
The fact that CES serves as such a great stage for new product debuts and keynotes has kept it strong over the years. And from our perspective, there is no better opportunity for large or small developers to reach key press, distributors, and collaborative partners than CES. That’s why Microsoft, despite anything it might be saying today, will most likely continue to appear at the show in at least some capacity, as it’s an important place to make the sorts of deals the company relies upon throughout the rest of the year. And that’s why there has been such dramatically increased interest from Apple-related companies in using CES to show off their new products. Las Vegas has the unique ability to accommodate the massive influx of people CES draws, with a great range of show floor venues, hotels to stay in, and awesome places to enjoy in the evenings after show hours. We’re really looking forward to attending the 2012 CES, and we’re confident that the companies, products, and people we really care about will be there too.