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Consumer Electronics Show to feel recession’s presence
Slow economy has dampened enthusiasm for spending on new gadgets
Cox News Service
Wednesday, December 31, 2008
The annual International Consumer Electronics Show, which starts Jan. 8 in Las Vegas, is traditionally as much a boisterous celebration of all things technology as it is a trade show.
But with many Americans now more concerned with paying their monthly bills than buying the latest gadget or big-screen TV, the recession is threatening to turn this year’s CES into the most subdued since after the Sept. 11, 2001, terrorist attacks.
Photo courtesy CES
Attendees fill the show floor at the 2008 International CES. The recession is expected to make this year’s show more subdued.
• WHAT: The nation's largest electronics show, in its 42nd year. Companies from around the globe unveil their latest products for 2009, from tiny gadgets to the biggest of big-screen TVs.
• WHO: About 2,700 exhibitor companies and 130,000 attendees
• WHEN: Jan. 8-11
• WHERE: Las Vegas
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“The party is over” for consumer electronics companies, said Paul Carton, vice president of research at ChangeWave Research, a Rockville, Md., firm that tracks consumer spending on electronics and other goods.
“U.S. consumers have been splurging on consumer electronics for quite a long time,” Carton said. “But when you have to pay for food or doctor bills or consumer electronics, most people are opting to pull back on consumer electronics.”
According to a December survey by ChangeWave, 60 percent of consumers said they planned to spend less overall in the next three months than they did a year earlier, and 43 percent said they planned to spend less on electronics. The overall outlook was the worst since ChangeWave started tracking consumer sentiment in 2001.
The electronics sector is expected to be among the hardest hit in coming months as budget-conscious consumers cut costs, Carton and other industry analysts say.
“As much as 2008 was a stress test for the electronics industry, 2009 is likely to raise anxiety levels further,” Stephen Baker, vice president of industry analysis for market researcher NPD Group, predicted in a recent research note. “Undoubtedly, the first half of 2009 will be miserable” for consumer electronics companies.
Also putting a damper on this year’s CES, where electronic companies unveil their latest and greatest goods for the coming year, is the lack of new must-have products.
Big-screen TVs are now all but ubiquitous. Nobody has come up with a replacement for the iPhone or the iPod. Personal computers have become commodities. And Microsoft, Nintendo and Sony aren’t due for a major refresh of their video game consoles any time soon.
CES, which runs Jan. 8-11, is still the nation’s biggest and most influential technology show.
Organizers expect this year’s show will draw about 130,000 attendees. But that’s down from 141,150 last year, and off about 10 percent from a high two years ago.
About 2,700 exhibitors from around the globe are expected this year, down from 3,000 in January 2008.
Last year, manufacturer Leggett & Platt Inc. sent about 15 people to CES. This year, it’s sending 12 from its offices in Atlanta and Missouri, said Vincent Lyons, the company’s vice president for engineering and technology. The company’s Atlanta-based commercial vehicles subsidiary plans to unveil a new in-vehicle electronics charging system at CES.
“We’re not staying at the Super 8 (motel), but we are being very diligent about travel arrangements this year,” Lyons said.
Some companies are cutting costs at CES by simply showing off their latest products elsewhere.
Cisco Systems Inc., for instance, decided against renting exhibit floor space at the Las Vegas Convention Center and instead is showing off products from its Atlanta-based Scientific-Atlanta division and its other business units at nearby hotel conference rooms that are less expensive. It’s also cutting back on other CES expenses as part of a $1 billion company-wide cost-cutting program.
Similarly, Round Rock, Texas-based Dell Inc. is unveiling its 2009 lineup of PCs to journalists not on the show floor at CES, but at the nearby Palms Casino Resort.
Many Vegas-area hotels, which traditionally jack up prices for CES and still manage to sell out, are cutting rates and worrying about vacancies this year.
That’s good news, of course, for attendees.
“We’ve been really happy about hotel rates this year,” said Marc Salerno, the Doral, Fla.-based national marketing and sales manager for Genius KYE Systems Corp., which sells digital photo frames, computer Web cameras and other gadgets.
Salerno estimates his travel expenses for CES will be about 20 percent less than last year. As of last week, the Treasure Island hotel, where he’s staying, still had rooms available for about $220 a night — surprisingly cheap for CES.
In a town already struggling with a downturn in tourism, the economic impact of CES will likely be about $18 million less this year than last year, said Jeremy Handel, spokesman for the Las Vegas Convention and Visitors Authority.
Last year, the electronics show added about $222 million to the Las Vegas economy, he said. This year, it’s expected to be closer to $204 million.
“It’s the largest annual convention we host,” Handel said. “It’s a very big deal.”
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