With a brittle economy, this year's electronics showcase in Las Vegas could go one of two ways. It may turn out to be one of the quietest shows in recent memory, devoid of notable new product releases, or it could prove to be the resurrection ground of faded companies and a launching pad for new ones.
The annual Consumer Electronics Show kicks off on Jan. 8 in the midst of the worst economic slump in decades. Unlike a year ago when electronics makers such as Sony and Panasonic headed to the show buoyed by record spending on flat-panel televisions and other gadgets, the 2009 CES will open under the dark cloud of consumer uncertainty.
Electronics manufacturers may therefore decide to take it easy this year, analysts say, and hold off on debuting splashy new technologies, which have been the hallmark of the CES over its 40-plus years. Technologies that have made their debut at the show over the years include the VCR (1970), the compact disc player (1981), high-definition televisions (1998) and Microsoft Corp.'s Xbox (2001).
"The agenda will be dominated by the downturn," says Kaan Yigit, president of Toronto-based electronics monitoring firm Solutions Research Group. "I won't say it'll be all gloom but there is probably a glut of too many new products chasing too few buyers in the next year and a population that now has upgrade fatigue."
About 130,000 people are expected and the show will feature 1.7 million square feet of exhibit space, the third most in its history.
The Consumer Electronics Association, which organizes CES, isn't expecting the downturn to play much of a factor in attendance. About 130,000 people are expected and the show will feature 1.7 million square feet of exhibit space, the third most in its history, spokesperson Sarah Szabo says.
Still, the numbers look like they will be down at least somewhat from the 140,000 attendees last year. Several Las Vegas hotels, usually booked solid during CES, recently cut rates to entice budget conscious fence-sitters into coming out.
Last year's show saw several notable debuts, including the first appearance by a car maker — General Motors — which showed off its Volt electric car and its sponsored robot vehicle, designed and built by Carnegie Mellon engineers.
Television studios NBC Universal and Sony Pictures were also at last year's CES, marking the first time that content producers have attended an event otherwise geared to showing off the goods that display their creations.
On the gadget side, the 2008 CES saw Sony unveil the first organic light emitting diode (OLED) televisions, which are seen as the low-powered next step in flat-panel display evolution. Microchip maker Intel also showed off a new category of "netbooks," or compact laptops designed primarily to surf the web.
Analysts are expecting many of the blue-chip electronics companies to play it safe this year and introduce only incremental improvements to existing technologies. Last year, for example, after fighting it out for several CES shows over who could make the biggest flat-screen television, manufacturers switched gears to emphasize thinness. That trend could continue this year.
"This may be a year to get back to basics and survey the landscape before going ahead with any major new product releases," says Kevin Restivo, consumer electronics analyst for research firm IDC Canada. "More and more it's about building a better mousetrap."
Content and cars will indeed continue to be a major theme at this year's show, Szabo says. Sony, for example, will be filming Celebrity Jeopardy live from the show floor all week.
"It really illustrates the symbiotic relationship between the world of content and technology," she says.
Some analysts, however, are puzzled by the inclusion of content companies.
"They are awkward at this point. They think they need to be there because of multiplatform potential and it's largely exploratory," Yigit says. "But what can you really buy from NBC Universal except movies online?"
Eyes on Ballmer
Another change in store for this year will be the opening keynote address, which was given for the past 10 years by Microsoft founder Bill Gates. With Gates stepping down this past summer from day-to-day operations at the company, the introductory address now falls to Microsoft chief executive officer Steve Ballmer.
Gates's speeches, which were often sprinkled with celebrity appearances and self-deprecating humour, were a major draw for many attendees. All eyes will be on Ballmer, not only to see if he can duplicate his predecessor's often hilarious performances, but also on how he plans to revitalize the lethargic-looking software giant.
The Microsoft CEO is widely expected to unveil details of Windows 7, the operating system that will replace the flopping Vista, during his presentation.
Also giving presentations during the show, which runs until Jan. 11, will be Sony CEO Howard Stringer, Ford CEO Alan Mulally, Intel chairman Craig Barrett and Cisco CEO John Chambers.
'The race has been on for some time to create [the] connected home, but it's more of a marathon than a sprint and there doesn't seem to be a winner yet in sight.' — Kevin Restivo, IDC Canada
Another company hoping that CES proves to be a turnaround is slumping smartphone maker Palm, which is expected to announce details of its Nova Linux-based operating system. Palm, which used to own the market, has fallen behind fellow smartphone makers Nokia, Research In Motion and Apple and is hoping the new software can get it back in the game.
A number of smaller companies could also emerge to take advantage of one of the big trends of 2008, where television migrated onto the internet in the form of websites such as Hulu and Joost. An opportunity exists for electronics makers to fix the problem of getting internet-hosted television off of computer monitors and back where it belongs - onto TV screens in the living room.
"Connectivity has become of paramount importance to consumers but the media server, this holy grail of the home, hasn't lived up to expectations," Restivo says. "The race has been on for some time to create that connected home but it's more of a marathon than a sprint, and there doesn't seem to be a winner yet in sight."
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