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AS CES goeth, so goeth the industry

Posted: 02.03.12

For those of you who went to CES this year, you should have recovered by now. And if you suffered through 2011, you should be seeing some little rays of sunshine and hope for the on-coming year. And if you accept my premise about CES being a leading indicator, then you should feel pretty good about 2012.

I first proposed CES as a leading indicator about eight or nine years ago. If you look at the following chart which covers the past ten years you can see definite correlations.

What I think the data really represents is the manufacturers and dealers long-range vision, and the adjustment they make (on costs) in anticipation of it. I think the suppliers to the CE industry see order rates dropping and then cut back on expenses. That cause fewer people to go to conferences, and when the picture looks brighter, they want to be at the head of the pack and rush back to CES. Also, the suppliers will typically do massive product rework and development during the down times so they will be in a position to capitalize on the upswing—and what better place to show your stuff than at CES.

However, we may have a natural barrier, just like the one we may be facing with Moore’s Law. As extraordinary as Las Vegas is, it does have an entropic limit and can’t expand forever (although there is still lot empty lots in the town.) There were one hundred and fifty-three thousand people squeezed into the taxi queues, restaurants, and hotels, and they were all very hard to avoid if you were trying to get from point A to B. The monorail was jammed packed, the buses had lines that extended the length of the Convention Center, and if you didn’t make a reservation at a restaurant long ago, it’s a the hotel or a big Mac for you.

CES is ridiculously large, and difficult to navigate. The booth addressing system is absurd and illogical, and the whole experience is unpleasant. That pain and suffering is offset by the surprises that can be found there, the opportunity to see clients you haven’t touched for a few months, and the stories. In general, the keynotes are a total waste of time, especially since you can watch them on YouTube almost in real time.

It’s a mixed message of a show. There are technology companies like ARM, Imagination, MIPS, and Vivante selling to component builders like Freescale, Intel, Nvidia, and Qualcomm, who in turn are trying to sell to device builders like HTC, LG, Motorola, and Sony, who are trying to sell to dealers and distributors like BillyJoe’s TV Shoppee and Best Buy. But BillyJoe wanders into Nvidia’s stand, and Qualcomm wanders into Best Buy, and others just wander, often in a circle trying to figure it all out.

It is in every sense of the word a bazaar, and with almost the same degree of organization as the Grand Bazaar in Istanbul—spices in one section, leather goods over there, rugs to the left.

CES needs to be broken up. The exhibitors would appreciate it, the city’s infrastructure would appreciate it, the attendees would appreciate it, and the city’s taxes and retail turn-over would be greater.

If CES Auto was one day and it was one I missed, how would that impact me? Not a bit. And if it was important for me to see cars with seven 20-inch woofers and chrome plated DVD players, then I’d do that. Do I really need to see iPod covers, stainless steel microphones (one can only wonder why they are needed), or whatever those things over in the corner of the north hall are?

And then there is the rat population consideration—at a critical density, wars break out among rats. Are a bunch of stressed out, hung over, trade show delegates that different?

It is possible density-dependent checks on population growth through intraspecific competition will not only reduce the number exhibitors to CES, but that as in most populations when intraspecific competition manifests, the population never recovers to its original size. Anyone remember Comdex? Anyone miss it?

So CES should head off this catastrophe and divide and conquer. Multiple smaller CES’s would be much more profitable for CEA, Las Vegas, and the exhibitors. The taxi drivers and restaurant help would like it too.

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