CES Countdown #2: Who will be spending money in 2009, and for what?

By Angela Gunn | Published January 8, 2009, 7:00 AM

There is, or there was as of Wednesday night, a CES sign in the Las Vegas Convention Center that seems to sum up the current state of the technology marketplace. For everyone's sake, let's hope it's only a sign, not a Sign.

The small-s sign listed seminars slated for the rest of the week in LVCC North. Usual stuff, with SuperSessions and "thought leaders" and all, but there was one disturbing last-minute addition -- a big CANCELED sticker over the presentation on "International Success Stories from the Retail World."

Truly, retail cannot seem to catch a break, as the economy shudders and stumbles and the world waits for whatever change may come in the weeks and months ahead. It's thought that tech spending might not take the hit of, say, Las Vegas tourism itself -- not only did your reporter get a cab immediately upon stepping out the door Wednesday morning, her cabbie told her he'd been waiting 90 minutes for a fare, which sounds like no CES on record -- but is there seriously a market for giant televisions and cameras with an added helping of megapixels?

The products at CES aren't, say, the most basic needs of food and shelter, unless you count the effect their design, manufacture, and sales have on the people whose livelihoods depend on buying, selling and processing them. But most of them aren't exactly luxuries either, at least not in essence. (Automobiles are a good example; most of us don't feel we must drop thousands on pimping our rides, but very few of us would claim we can get along without a car entirely either.)

The reality is that tech gear exists on a continuum -- we need it, but do we need this year's version of it? According to many companies, consumer buying patterns are beginning to show the effect of the downturn, but it's less that they're not buying and more that they're buying conservatively. That's true in several senses:

• They're buying the brands they know. Stan Glasgow, president and COO of Sony Electronics US, was a breath of fresh air this week when he used words like "staggering" to describe the impact the current economy has had on his own thinking...and when he admitted that times like these can deeply rattle a person's composure. And yet Glasgow has less to worry about than some. His firm is surely one of the most recognizable -- not to say ubiquitous -- in the sector. Most observers agree than in ugly times, consumers tend to go with the brands they know. (The corollary? There are precious few brand-new faces among the companies exhibiting.)
• They're buying, but more modestly. There are plenty of potential purchases that a consumer can frame as better-than buys -- that is, things that can be bought for a little money that will save money in the medium-to-long run and are thus better deals. (From a slightly different angle, you could call them "affordable luxuries.") Television manufacturers in particular can argue that money spent on a sweet home-theater setup is money not spent in the temples of $5 popcorn or in other leisure venues. (Getting an HDTV to watch Planet Earth in full glory is cheaper than traveling around the world to see it all in person.)
• They're waiting, they're watching; time to prep. Some companies in relatively strong financial positions can gaze upon near-term sales and manage not only not to panic but to plan -- training support staff, continuing research-and-development efforts, riding the storm out. One hears talk like this on the enterprise side from outfits such as Red Hat, which is prepping staff for increased activity midyear; here at the show, LG CEO Michael Ahn stated plainly that neither marketing nor R&D cuts were on tap for his company, since doing either would impair the firm's long-term goals and undo recent progress.

Beyond that, a lot depends on how consumers regard the efforts currently underway to right the ship. Most of the ride-it-out crowd is betting on at least the beginnings of real improvement by midyear; a longer, harsher downturn will likely mean some profound rethinking.

Some niches have a happy little spark all their own; the proliferation of low-end, super-simple video cameras tells you plenty about the hunger for that product, and even the possibility for a dark horse to pull ahead. (Had you heard of Pure Digital three years ago?) Some new or newly surging item -- Blu-ray? E-book readers? Some item heretofore unknown but lying in wait on the show floor as we speak? -- could prove not only irresistible in itself but a lure for consumers to open their wallets.

Tech's a mighty mature industry to deliver a game-changer during a January like this one, but the possibility of a glittering success story is in part what draws people to Vegas -- and readers like you to articles like this.

Comments

foxfyre

Jan 8, 2009 - 1:55 PM

They will be buying real functionality at competitive prices!

NOT whizbang gimmickry masquerading as style or functionality where symbolism trumps substance.

And unfortunately, except for the new Intel and AMD offerings, not much qualitifes as substance over symbolism. I don't care how many 3D green labels you can stick on it!

Score: 1

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