In tough times, Vegas CES gets smaller

SAN FRANCISCO Mon Jan 5, 2009 8:31pm EST

Panasonic Electronics technicians set up a display of flat panel televisions for the 2009 International Consumer Electronics Show at the Las Vegas Convention Center in Las Vegas, Nevada January 5, 2009. In the background is the 150-inch plasma television which was introduced at last year's show. The consumer technology trade show begins January 8 and is expected to attract 2,700 exhibitors and 130,000 attendees. REUTERS/Las Vegas Sun/Steve Marcus

Panasonic Electronics technicians set up a display of flat panel televisions for the 2009 International Consumer Electronics Show at the Las Vegas Convention Center in Las Vegas, Nevada January 5, 2009. In the background is the 150-inch plasma television which was introduced at last year's show. The consumer technology trade show begins January 8 and is expected to attract 2,700 exhibitors and 130,000 attendees.

Credit: Reuters/Las Vegas Sun/Steve Marcus

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SAN FRANCISCO (Reuters) - Even amid the flash and sizzle of the world's premier showcase for consumer electronics, the reality of the economic recession will be hard to ignore.

With shoppers in a funk and companies scaling back, the annual Consumer Electronics Show extravaganza in Las Vegas this week is likely to be subdued, with fewer manufacturers, retailers and people expected in attendance.

The focus is likely to be on smaller, more connected and greener devices that can help consumers save on bills. That is a change from years past, when companies trafficked in excess, offering items such as massive 150-inch TVs that were beyond the financial reach of most consumers.

"In tough times, the emphasis maybe shifts from cool and neat to how do you make things work better," said NPD analyst Stephen Baker.

The Consumer Electronics Association, which hosts CES, estimates that 130,000 people will attend, down from 141,00 last year. Hotel rooms in Las Vegas, usually scarce at this time of the year, can still be found.

The show's 2,700 exhibitors will be spread over 1.7 million square feet, a smaller footprint than last year's 3,000 exhibitors.

The tone will be different as well, with many tech companies focused on sealing sales rather than just making showy exhibits on the convention floor.

"A lot of companies are asking us for meeting rooms that haven't done so in the past," said Jason Oxman of the Consumer Electronics Association. "Companies are looking to do business at the show that they would otherwise do with individual customer visits."

Kumu Puri, a senior executive with Accenture Ltd's consumer technology practice, expects the focus to be on areas showing strength, such as mobile devices, video games and personal navigation systems.

"Those are the categories that really continue to appeal to the consumer ... they're at price points that are a little bit more manageable," said Puri.

Some things will stay the same: attendees will be treated to a cast of speakers, including Microsoft Corp Chief Executive Steve Ballmer, Cisco Systems Inc CEO John Chambers, Sony Corp CEO Howard Stringer, Intel Corp Chairman Craig Barrett and Ford Motor Co CEO Alan Mulally.

SMALLER, CONNECTED AND CONVERGED

CES is likely to be awash in small, $300 to $400 laptops known as netbooks, which are gaining popularity, even as overall PC sales stall. IDC expects netbook unit shipments to surge 85 percent to 21.5 million in 2009.

Nearly every PC maker except Apple Inc has thrown its hat into the netbook space, hoping that volume sales will make up for lower margins. Analysts expect to see even cheaper netbooks emerge for 2009, possibly below $200.

So far, according to DisplaySearch, Taiwan's Acer Inc and Asustek Computer Inc dominate the netbook market, as Hewlett-Packard Co and Dell Inc struggle to catch up. Some expect Sony to unveil a netbook at CES.

As always, TVs will be a major focus and, while there will likely be huge models on display, expect to see more organic light-emitting diode (OLED) screens that are thinner, more energy efficient and have superior picture quality than liquid crystal display (LCD) and plasma sets.

TVs will get more connected, too. Yahoo Inc is slated to announce deals with equipment makers that executive Patrick Barry said would bring the Internet to the TV "without destroying the TV experience."

There is also plenty of buzz around 3-D, which is gaining popularity at the Cineplex, but has yet to move into the living room. Fox Sports will show college football's championship game in 3-D at a Sony-sponsored event at CES on January 8.

Many companies, including graphics chip maker Nvidia Corp, will be flogging competing technologies as they struggle to get a toehold in the emerging 3-D industry.

In the wireless sector, CES will be littered with competing touch-screen phones. Some hotly anticipated news is a new operating system from Palm Inc, which has been hurt by Apple's iPhone and Research in Motion Ltd's BlackBerry. A new device will come later in the year.

Cisco also plans to unveil a wireless home audio system linked to an online media library called Media Hub, and a software service called Eos that helps media companies create social networking sites.

And there will be plenty of companies hawking green technology, such as Monster Cable, whose GreenPower products promise to eliminate energy drain when a PC is turned off.

(Additional reporting by Sinead Carew, Franklin Paul, Ritsuko Ando and Kiyoshi Takenaka; Editing by Tiffany Wu and Andre Grenon)

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