CES is Bigger and Better Than Ever

The vitality of last month's Consumer Electronics Show (CES) in Las Vegas may have done much to alleviate anxieties about the state of the economy, and the validity of trade shows. According to the show's sponsor, the Consumer Electronics Association (CEA), attendance gained on last year's show with 117,000 attendees viewing 2,300 exhibitors in the Las Vegas Convention Center and surrounding venues. This caps a strong year in the consumer electronics category, which increased sales by 3.7% in 2002 to hit a record $96.2 billion, according to the association.

"The 2003 International CES marked a key turning point for the consumer electronics industry," said Gary Shapiro, president and ceo of the CEA. "It was a breakthrough jumpstart for the new year that will send the industry on a major upswing."

The success is owing in part to the digital wave which has been offering consumers high quality audio and video capabilities in attractive packages that are getting smaller and smaller. The trick for manufacturers has been to persuade consumers to step up to new devices with capabilities that were formerly handled by union members or pros like a cinematographer, recording engineer or photoprocessing lab technician.

Consumers can now shoot vibrant video, upload the files to their computers for editing and then transfer, or "burn," their opus onto DVD; images taken with a digital camera can be printed out on affordable home printers; music recorded to computer hard drives from the Internet can easily be transfered to MP3 players or burned onto blank CDs.

Many of the keynotes, presentations and entertainment emphasized upscale lifestyles with hip, good-looking 20-somethings using any number of devices to stay connected. Samsung called it reaching your potential. Kunitake Ando, president and coo of Sony Corp., in his keynote, called it a "ubiquitous value network." Bill Gates, chairman and chief software architect of Microsoft, during his keynote, called it "smart living in the digital decade."

The message was clear: This stuff can make you cool too and plug you into the energetic lifestyle of the sexy trendsetter.

But what's a retailer to do? The LVCC was engorged with not just offerings of a tangible nature--TVs, stereo equipment, cameras, computers and accessories--but concepts in connectivity and convergence that retailers need to pull into their stores as well. The pace of ce innovation is moving faster than ever as broadband access, not yet, but soon will enable instant delivery of vast amounts of digital content--i.e. movies, music--not to mention speed up distribution of e-mail.

Another big story is the maturing of wireless. With wider acceptance of WiFi and Bluetooth technologies, wireless possibilities are exploding. Cellphones are not just for voice communication anymore. Now, users, with the appropriate service plan, can take digital photos with the devices and e-mail the image instantly, as well as listen to MP3 music, or have a PDA incorporated via Palm OS or Microsoft software. Samsung showcased several color wireless phones that add a Palm OS handheld to allow Web surfing. The i700 and MITs 1330 have a built-in camera as well.

Not all the kinks have been worked out, however. Competing standards still block seamless integration so adoption may take a while to ramp up. At a wireless session, moderated by Andrew M. Seybold, one speaker placed Verizon Wireless, which uses CDMA technology, at the top of his list. It has the best coverage and the least number of complaints, he said.

All the big manufacturers emphasized convergence. "Miniaturization is driving the market," Gates told a crowd that had waited hours to pour into the Hilton theater to hear and see Microsoft's latest and greatest. Panasonic debuted its "One" system, what it calls an entertainment network in seamless integration. The set-up uses an AVC server as the junction of music and DVD player, video recorder and DVD-RAM recorder.

Sony touted its Cocoon, a set-top box (using Linux) that can record television programs and playback over a network. Samsung's next generation DVD recorder, the Blu-Ray Disc Recorder, uses blue lasers to record DVDs and CDs and will be available in the first quarter of 2004.

Sony presented the PEG-N290, a clié two megapixel digital camera with Bluetooth, a voice recorder and Palm OS, that will be available at retail late this month for $799.

Smart Personal Object Technology (SPOT) by Microsoft allows a wristwatch (in partnerships with Fossil, Citizen and others) to provide news, weather, stock info and traffic reports. "It's not a geek device, but a lifestyle device," Gates assured his listeners. Several manufacturers, including Zenith, announced digital cable-ready high-definition television. Sirius Satellite Radio showed off a new Kenwood car stereo that doubles as a mobile video system, capable of receiving satellite-beamed video as well as radio broadcasts.

For the home, the big news was high-defintion television (HDTV), large plasma and LCD monitors, digital imaging, home video production, PVRs, multi-channel audio-visual systems and surround sound and MP3 audio. John Morog, Philips senior manager, training, calls Philips' newest plasma models "the best bedroom television ever built." He says that HDTV will "pop" this year. Audiovox Electronics Corp. introduced six flat panel TVs ranging in size from 12 to 30 inches with price from $699 to $5,999.

Other standouts in the digital camera arena, Olympus's Camedia C-5050 is compact and has a f1.8 aspherical glass 3x zoom lens with a 5.0 megapixel CCD. Its intended audience is advanced digital photographers seeking full manual controls.

In accessories, several manufacturers were showing everything from CD and DVD pouches and holders to knapsacks for carrying portable equipment. A.L.S. Industries has alliances with NASCAR, the Indianapolis Motor Speedway, Nintendo, Xbox, PlayStation and several other licenses to decorate its lineup. Un/Wired showed off its Handsfree microphone and speaker for cell phone use in the car. Its sound-suppression circuit creates a "voice bubble," that enhances a user's experience. Fellowes/Body Glove offered an array of carrying cases made of neoprene, suede or jeans material for phones and other gadgets. Their latest promotion will involve outfitting NYC bike messengers.

Maxell has done a lot of work simplifying its packaging, says Don Patrican, evp, sales and marketing of the Fair Lawn, NJ-based company. The packaging, he says, presents a more consumer-friendly communication that makes product purchasing decisions clearer. He predicts that by the fourth quarter the price of DVD recorders will come down below $500. "Then there'll be a mass exodus from VHS," he says. Maxell offers blank media in all formats including camcorder. He adds that he expects an exodus from DV formats to DVD camcorders, as well. The company also debuted a line of replacement batteries for digital cameras that includes seven models of lithium-ion rechargeables and a non-rechargeable lithium.

Case Logic has teamed up with skateboarding phenom Tony Hawk and other extreme sports stars for its Action Sports Signature Series of accessories for personal technology.

When this reporter asked Sandy Bloomberg, chairman of the board of Tweeter Home Entertainment Group, surveying the show with his executive team, how he can assess the array of products and decide what to bring into the store, he quipped, "That's why we get the big bucks."

Traffic to and from hotels was horrendous (this may improve by next year when a monorail system connecting hotels with the convention center begins operation), signage at the show can be improved, but the weather was a delight for the few moments outdoors, press lunches were warm and tasty and offered a welcome respite from the show floor chatting with colleagues, and the best parties I attended were Casio's at Studio 54 at the MGM Grand, and Fellowes' party at The Joint at The Hard Rock where The Beach Boys sent revelers into heaven.