In 2007, Bill Gates stepped onstage at the International Consumer Electronics Show in Las Vegas to help introduce Sync, a combination GPS navigator, digital music player, and speakerphone being introduced into Fords. Mark Fields, then the head of Ford Motor’s Americas operations, joined Gates for the sales pitch. He now recalls being met with incredulity. At a show traditionally dedicated to next-generation gadgets, Fields says, the most common questions for the automaker’s delegation were, “Why are you here? Oh, and by the way, why aren’t your knuckles dragging across the floor?”
At this year’s CES, which began its four-day run on Jan. 6, 10 major automakers showed off their latest in-car electronics and self-driving prototypes in sprawling exhibitions that together took up the space of about three football fields. Consulting firm Accenture reports that technology is the top selling point for 39 percent of U.S. car buyers, almost triple the 14 percent who care most about horsepower and handling. The industry has taken notice, trying to rebrand cars as jumbo smartphones that are stuffed with apps and can be accessed remotely via other devices. “We’re thinking of ourselves as a mobility company and not only a car and truck company,” says Fields, now Ford’s chief executive officer. “We want to be viewed as being part of this community.”
This year, Fields gave the CES keynote speech, about the dawn of the connected-car era, and Daimler CEO Dieter Zetsche talked up an early model of a self-driving Mercedes-Benz. With 140,000 visitors to the exhibition halls, Audi, BMW, Fiat Chrysler Automobiles, General Motors, Hyundai Motor, Mazda Motor, Toyota Motor, and Volkswagen have piled in. That’s attracted more companies interested in selling the automakers hardware and software—an $11.3 billion business, estimates the Consumer Electronics Association (CEA), which puts on CES. In the past five years, the exhibition space dedicated to car equipment has almost doubled, to 165,000 square feet, about one-twelfth the total area, according to show spokeswoman Tara Dunion. “When you look at who’s coming, with Mark Fields and Dieter Zetsche and all of us, it has become an auto show,” says Timothy Leuliette, the CEO of parts supplier Visteon.
Five years ago, Ford’s booth consisted of a single Taurus on a 20-by-20-foot piece of carpet. This year the company’s two-story display included five vehicles packed with digital monitors, a handful of private offices for meetings, and a wall of screens promoting company experiments such as drone cars steered remotely by a driver in Atlanta and an app-based service through which people can swap vehicles. By last year, shortly before he stepped down as CEO, Alan Mulally, Fields’s predecessor, had become a fixture on the CES floor.
Now that car companies all have some kind of electronic display in their consoles, further automation is the next frontier. Hyundai’s Genesis luxury sedan can unlock and start with a tap on a smartwatch. Audi autopiloted one of its sedans more than 500 miles from Palo Alto to Las Vegas for the show. BMW says it’s one to two years away from selling self-parking cars with dashboards controlled by hand gestures. In a demonstration on the top floor of a garage, a driver stepped out of his car and spoke the words “go park yourself” into his smartwatch, then looked on as the car’s valet software rolled the vehicle into an open space. Another tap on his watch brought the car rumbling back.
BMW, in its second year at CES, had an exhibition that included more than 100 cars and covered 57,475 square feet of space just outside the show’s main hall at the Las Vegas Convention Center. Hildegard Wortmann, the company’s head of product management, says she made her first visit to the show in 2012 and returned to headquarters in Bavaria with a firm message: “We have to be there.” Auto industry meetings at CES are becoming big business for electronics suppliers, too, says Visteon’s Leuliette, adding that despite its setting the show has less glitz and more substance than other car industry exhibitions. “The Detroit Auto Show is a social event,” he says. “We’re making decisions in Vegas.”
The deals inked in exhibitors’ private conference rooms are good news for the show. CES, which hosted the debut of the VCR and the compact disc, has struggled to maintain its relevance over the past two decades. Although ticket sales keep rising, many major names in consumer electronics have skipped or declined to show products at CES for years. Video game publishers and smartphone makers save many of their big announcements for the springtime Electronic Entertainment Expo or Mobile World Congress, while companies such as Apple host their own launches in the fall, closer to the start of the holiday shopping season.
Apple stopped floor traffic at the Geneva International Motor Show last March when it first showed its CarPlay system, which mimics the look and functions of an iPhone on a dashboard touchscreen. “There were mobs of people who wanted to see that Apple screen inside a car,” says Danny Shapiro of chipmaker Nvidia, who was there. “It was nuts. You couldn’t even get close.” The CEA estimates that auto electronics sales will climb 3 percent this year—not stunning growth. A lot of buzz, however, has centered on versions of Apple’s iOS and Google’s Android in development for cars. Both are scheduled for release early this year.
Researcher IHS estimates that the world’s Internet-connected cars will increase from 36 million now to 152 million in the next five years, and even CES attendees who’ve typically focused on home electronics have begun pitching processors and operating systems more seriously to vehicle makers and buyers. Nvidia, a Silicon Valley fixture associated mostly with video games and computing equipment, now supplies processors for Audis, BMWs, and Teslas, and stacked its booth with a roadster and an electric supercar. “Two years ago our booth would have been filled with PCs and people playing video games,” says Shapiro, senior director of the company’s automotive business unit. “This year we made a strategic decision to shift the focus of the booth onto automotive.”
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