CES 2004 breaks new records, expands into new territory - Consumer Electronics Show, Las Vegas, Nevada

DSN Retailing Today, Jan 26, 2004 by Laura Heller

LAS VEGAS -- The 2004 International Consumer Electronics Show rocked and rolled, in more ways then just the musical acts performing at booths throughout the trade show floor. The conference broke records in terms of attendance and exhibitor space, introduced the industry to a host of new products and provided a forum for manufacturers and retailers to address some of the more pressing issues in the consumer electronics category today.

More than 129,000 people attended this year's show, held Jan. 8 to 11, with 2,400 exhibiting companies spanning more than 1.38 million square feet of space. These numbers make the 2004 CES the largest trade show in the Western hemisphere, according to the show planners. In a year when trade show attendance is down across many channels, CES can boast of bucking the trends and besting it's own record attendance set in 2000.

The growth of CES is due in part to the convergence of technology fields as evidenced by the number of new products and categories spanning multiple platforms and connected wirelessly. At last, say industry insiders, the technology of the future has arrived.

"In the 1990s, people got ahead of themselves," said Microsoft chairman and chief software architect, Bill Gates, during the pre-show keynote. "But now those things are really being delivered and they are being delivered through solid products that stand the test of the marketplace."

"A funny thing happened this year on the way to Las Vegas--the revolution actually got real," said Carly Fiorina, chairman and ceo of HP, addressing the audience on Day 2 of the show. "We have always had 'gee whiz' stories when we leave CES. This year, we have 'gee whiz' stories as we come to CES."

Wireless connectivity is something you get at Starbucks with your morning coffee, image sharing can be done via a cell phone and while the home of the future is only for sale to the very rich, elements of it can be incorporated into a middle-class abode and serviced from the local CE chain.

TV's are becoming slimmer, sleeker and yes, more affordable. A bevy of micro-displays--with picture quality and design similar to plasma sets but based on a less-expensive technology platform--are expected to reach the market en mass this year, offering consumers who have coveted the $6,000 plasma sets a viable alternative.

"I'm bullish on these for 2004," said Tom Crowell, merchandise manager, television, Circuit City. "A lot of people will replace their big screen TVs with [this.] It has a plasma-like feel for half the price."

Samsung debuted the micro-display technology under the platform name DLP last year, and virtually every major manufacturer offers a product in the category today. "The shift to this type of product occurred very quickly," said Crowell, offering a real benefit to consumers and retailers who want to reach a wider audience than the price of plasma permits. "The industry will probably sell 4,000 to 5,000 plasma sets in 2004. I'm hearing projections that micro-displays could sell 1.1 to 1.2 million units this year." However, the FCC mandate that all TVs be sold with a built-in digital tuner by summer 2004 will likely add a still-undetermined additional cost to these units.

Overall, the Consumer Electronics Association projects the industry will grow 5% this year to $101 billion in sales. Fueled in part by expected growth in flat panel video displays, DVD recorders, set top units that feature digital hard drives and the added ability to network them all together and access information from multiple locations, both inside and outside the home.

Another big trend to come out of CES this year is the entry of some new brands into the CE market. Dell and Gateway made headlines in 2003 with their first generation of CE products, including flat TVs. This year, Epson and HP announced similar product lines, including portable music players, handheld computers and TVs. Epson will offer a large-screen TV with integrated memory card slot and photo printer, allowing consumers to view and print digital images from their living rooms, while HP plans to bundle Apple's iTunes software with sales of its PCs and sell an HP-branded version of the popular iPod music player.

In all, the CE world looks to get more crowded in 2004, both in terms of manufacturers and the number and variety of outlets that sell them. "The future in on our doorstep," said Jeff Stone, president and ceo of Tweeter Home Entertainment. "[It's] the morphing of the IT world and the AV world."

"It's a fresh challenge," said Best Buy vice chairman and ceo, Brad Anderson. "It's going to make life more difficult, but it's probably a good thing in the long run."