CES Show: New Car Gadgets Take Center Stage

The automotive category continues to expand its presence at the 2011 Consumer Electronics Show. Not only will some industry heavy hitters deliver some keynote speeches, but there will be an entire trade-show-within-a-trade-show's worth of car gadgets showcased, many of which are aimed at using voice-control technology to reduce distracted driving.

The press preview for CES 2011 starts this week in Las Vegas. The Consumer Electronics Association, which sponsors CES, said its research shows 55 percent of smartphone owners prefer voice commands as their primary in-car user interface.

Ford CEO Alan Mulally has become a CES regular. Mulally is giving a keynote speech at CES for the third year in a row, on Friday, Jan. 7. The other marquee automotive name at CES 2011 is Audi Chairman Rupert Stadler. He's on the program for Thursday night, Jan. 6. Audi is a division of Volkswagen AG (VLKAY.PK)

Several big-picture factors are driving the explosion of interest in consumer electronics among the car companies and their suppliers:

Safety and distracted driving - Driving while texting or while otherwise distracted has become a big safety issue. That alone is enough to drive the car companies to find ways to limit distractions, like the Ford Sync voice-control feature, which was developed with Microsoft (MSFT). Besides civic-mindedness, the car companies also want to head off potentially onerous regulations, reduce their legal liability, and avoid bad publicity.
Demographics and competition - Today's plugged-in consumers don't see any reason why they shouldn't be just as plugged-in in their cars as they are everywhere else. This is particularly acute for younger drivers, but Baby Boomers are embracing the lifestyle of "all communication channels, all the time," too. Competition in the auto industry is fiercer than ever. Failure to jump on this bandwagon is a competitive liability.
Profits - Ford announced this week it has now sold more than 3 million units of its Sync system. It's standard on some models. For those models where it's optional, suggested retail is $395. Even if Ford's unit profit is only a fraction of the retail price, that's still a good chunk of change, in an era where consumers are reluctant to pay extra for anything.

Not only that, Ford says its research shows more customers actually use their Sync feature - always a good sign - and that owners are increasingly likely to recommend it to others. Ford said in a written statement "close to 70 percent" of owners use Sync's voice-recognition feature, and "more than 80 percent" say they would recommend it to others. Both numbers are up about 5 percent from a year ago, the company said.

Ford Sync allows you to use voice control to perform routine tasks like make and receive phone calls or to play music. Aftermarket vendors at last year's CES showed that a lot more features are possible, like converting e-mails to voice or vice-versa. The automakers are scrambling to keep up.

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