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Measuring Morale At CES

Anyone preparing to attend the 2010 International CES had to have one thing in mind as they packed their bags and traveled to Las Vegas: What would the morale of the industry be?

After a rotten 2009 for the economy and a disappointing one for the industry, it was a logical question. The fact is that CE manufacturers, retailers and distributors all work on razor-thin margins — even in good times. So CE executives are usually … let’s not say cynical, let’s say … realistic about industry prospects.

Based on the many discussions yours truly and the TWICE staff had in Las Vegas, the attitude was mostly positive.

One also got the notion that many were glad that 2009 was dead and buried following a holiday season that saw consumers return to stores and shop online in droves, but spend less cash on many more units.

Traffic at CES, always a barometer of CE industry well-being, initially seemed to this observer to be a lot busier. Yes, the Sands Convention Center was not used for CES, so the Las Vegas Convention Center was crammed with more exhibitors. But by the end of the show, the Consumer Electronics Association (CEA), owners and producers of CES, admitted that their pre-show estimated attendance was wrong (110,000) and the official audited attendance number (to be released in the spring) should be more than 120,000 attendees.

Not bad considering the gloom-and-doom atmosphere around CES a year ago, after the initial shocks of the economic downturn hit home.

Of course, the macroeconomic problems that occurred in 2009 didn’t disappear with the purchase of a new calendar. And the challenges that the CE industry faces haven’t disappeared either. CEA itself is predicting only a 0.3 percent increase in factory sales for 2010, so this year won’t be a picnic either.

Manufacturers and retailers are still faced with consumers who love their products, but want to pay less for them if they are in the market, if they are up for shopping at all.

Retailers, especially the specialists, are less concerned about selling individual SKUs than selling products that can be bundled with other products, services or content, and can be installed.

Retailers are also looking to expand their technology offerings, as buying groups like PRO and HES indicated during the show (see p. 6). A/V specialists are looking into gaming, computers, mobility products and the like, but the manufacturers and retailers are also looking at non-traditional CE categories — such as health and exercise products and home energy management — as profit categories for the new decade.

And, of course, the industry did not disappoint in the introduction of new categories and extensions to existing ones that created plenty of buzz. The 3D TV hoopla garnered much of the headlines, along with mobile TV, netbooks, e-readers, more LED TVs and more sophisticated IPTVs, smartphones and wireless connections of all types. And did I mention apps for just about everything?

The CE industry is evolving and innovating its way into a new year once again. While one does not know what awaits the industry in 2010, it got off to a good start in Vegas earlier this month.

For full coverage of CES we will have another post-show print edition published Jan. 25. And be sure to visit for more CES stories and breaking news.

This blog originally was published as a column in the Jan. 18 print edition of TWICE.