Gadget lovers seek out 2008's hottest products

By Franklin Paul and Eric Auchard

NEW YORK/SAN FRANCISCO (Reuters) - The world's premier consumer electronics show kicks off in Las Vegas next week, but economic headwinds may mute the glitz and glamour of a conference that defines what gadgets are in store for 2008.

The Consumer Electronics Show (CES) is set to attract 140,000 attendees to a show covering 1.8 million square feet and featuring everything from 100-inch TVs to sophisticated car navigation systems to quirky "zero-gravity" massage chairs.

The oddly timed event, coming on the heels of the festival of consumption that defines the year-end Christmas holiday season, showcases thousands upon thousands of products and prototypes set for release over the next year.

Martin Reynolds, a vice president at market research firm Gartner Inc, says hit products are coming faster and having shorter shelf lives than consumers electronics of the past.

The industry's iconic gadgets -- Apple Inc's iPod and iPhone franchises, the Nintendo Wii game platform -- and Google Inc's Web services show how the electronics industry has become a Hollywood-style blockbuster hit parade.

"It is no longer first-to-market that matters. It is first to volume," Reynolds says. "Whoever can get to the price that makes the volume of popular products explode, wins," he said.

Still, while headline speakers such as Microsoft's Bill Gates, General Motors' Rick Wagoner or Comcast's Brian Roberts will hail the convergence of digital electronics across industries, economic factors could spoil the party.

Market watchers are debating how long consumer spending on gadgets can hold up in the face of a global credit crunch, weak U.S. dollar and ever higher oil prices. But consumers caught short by these forces may focus on improving existing homes with the latest wireless or video gear, some analysts argue.

And most consumers see no need to upgrade at current prices to next-generation Blu-ray or HD-DVD while gadget manufacturers and Hollywood studios will once again defend their stalemated positions at CES over what standard to adopt for digital media storage discs.

VIDEO, WEB AND LOTS OF FLASH

Nonetheless, a wave of innovation is being driven by the increasingly Web-connected nature of devices, ranging from phones to TVs to cars and cameras.

This connectedness allows products to be upgraded by software rather than forcing consumers to buy new devices to get new features. That shifts the industry's focus from technical breakthroughs to the clever new services that can be delivered cheaply and conveniently through such devices.

As an example of services that have been technologically possible for some time but are now hitting the mainstream, Karen Chupka, a Consumer Electronics Association senior vice president, points to satellite-linked mobile phones that can locate nearby restaurants.

"While that is not a new technology, there is a 'wow factor' compared to what was available in the past," Chupka said. "It's adding services that you would never think ... would be available to you," she said.

The proliferation of devices that let users store video, music or pictures in convenient flash memory has caused the price of such products to plunge, meaning that not just digital cameras but phones and computers and other gadgets now come ready to store up to eight gigabytes of media, enough for more than 2,000 songs or about five feature films.