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From This Week's TechWatch

Jon, you ignorant … party pooper

By Jon Peddie

Which came first, the vacuum left by Comdex, or the convergence of the PC and CE devices?

Why, at the CE conference, are PCs, and even more bewildering, PC components (like chips and power supplies), displayed at CES?

I came for the dealers

It’s obvious there is a need for PC manufacturers to go to CES in Las Vegas, since, as we know, all CE dealers sell PCs—don’t they? Well, the PC makers think they do, and so if you want to meet CE dealers you go to CES, that’s what it was started for. And the CES folks, clever bureaucrats that they are, have sensed that need by the PC suppliers and responded to it by sending out their shock troops and selling the hell out of the show, tripling its capacity to now include the old Sands.

The PC suppliers will realize the same results they did from Comdex, except at a slightly less expense—from the conference organizers that is. Although the CES organizers won’t gouge the exhibitors the way Comdex did, the city itself will make up for that by trip-ling (yes triple) the price of taxis, hotel rooms, and most restaurants.

But it’s LV and you expect to be fleeced at LV, right? Why else go? It’s not for all the business you’ll do; we all know that’s the emperor’s new clothes. You go to be seen, kinda like getting out of a limo without wearing undies; you want to make a statement and you want to be sure everyone is looking. In the case of CES attendees, you want to show off how cool you are, and how wildly you can spend stockholders’ assets.

But that’s your game, you’ve honed it, got it well rationalized. (We met more customers this year than ever before—never mind that it costs over a million bucks in costs to do that; why, if we had to visit each one of those customers, it would have cost almost $100,000. Huh?) And, how many of those customers (are there really new ones in the PC industry that you haven’t met or didn’t know about?), how many of them would be delighted to come to your HQ and get some really special treatment and quality time?

But that’s stupid, it’s obvious I’m not seeing the big picture here—the merging of the PC and CE devices into the living room and elsewhere in the home. The merging of CE applications and capa-bilities into laptops, the need, the screaming, hair-pulling, unrelenting, almost unsatisfiable desire by consumers to have more stuff to handle the increasing number of video and audio sources, and the associated entertainment content like games.

It's about convergence, stupid

Convergence is here, now, really. This time we means it, and we can prove it—look at the number of people who went to CES—what more do you need? Never mind those ridiculous cash register statistics, or the disappointing sales and profits of most CE suppliers and many PC suppliers, that’s just a temporary glitch, seasonality, trust me. People want this, they really and truly want it—you have to say that to yourself five times in the morning before you go out in search of a hangover cure. I’m here for a purpose, people want this stuff…. Where’s the aspirin?

Real cities with real prices

Next up—well, actually at the same time—is the Macworld conference in San Francisco. Smaller than the CES, but just as flamboyant. One of the big differences is Macworld is in a real city (some call it The city). Its prices don’t go up just because it has a convention in town, they’re always up. Which is a thought—when the hell doesn’t LV have a convention? Why should CES prices be so much higher? Supply and demand, I suppose.

Macworld—real convergence?

Macworld too is about convergence. From myPod to yourPod. Apple will tell you they invented convergence, and maybe they did. Didn’t do all that much for them either, did it? But this time, it’s real, trust me. The iPod has proven that, well, what has the iPod proven? (Other than we can be trained to be agents of Apple’s marketing department and write a little i and then a big P, something Nvidia is trying to do by getting journalists to use all capital letters for their name.)

Actually the iPod doesn’t prove a damn thing about convergence. All iPod proves is that people want portable music players that are as easy to use as a cassette player was, and they’re willing to pay for it. If you want you can be generous in your definition about convergence and point out how the PC (er, Mac) is used to enable the iPod. It’s a stretch, but then that’s the job of marketing, to stretch and spin, right? (Not really, but some misguided souls in marketing think it is.)

Live! Viiv

If you ask AMD or Intel about convergence they’ll say, it’s like totally here—where have you been? They will point to STBs that have x86 processors in them and say, “See?” Ah-huh, yep, an STB that’s convergence alright. More clothes for the emperor. “Oh yeah?” they’ll yell, “What about these slick-looking boxes that look like a DVD player, but have an x86 in them? Huh? What about that, Mr. Smarty Pants?” OK, if it’s a convergence device, then I should be able to surf the web, maybe play a game, listen to MP3 music, can I do that? Can I? Gee, it sure got quiet in here.

So we’re back at square one—first we need a definition of what a convergence device is. Then we need some examples of them, and then we need some customers using them. When all those dots line up you can honestly speak about convergence. In the meantime you’re just wasting shareholders’ money partying in LV.

Epilog

With regard to wasting shareholders’ money, Nvidia decided not to do it on CES, where the company only had meeting rooms. For a superb marketing company like Nvidia to stay home says something indeed about the “value” of these mega events. They’ve outlived their usefulness and rewards and now are just mega expenses.

And Nvidia’s people are not the only ones staying away—attendance at the show was  down this year to 140,000 from 155,000 last year.