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Monday, January 19, 2009

Electronics Show Gets a Shock

As posted by: Wall Street Journal

A sharply slowing global economy appears to be taking its toll on one of the world's biggest technology conventions, the Consumer Electronics Show in Las Vegas, set for next month.

Organizers of the event, which is to hold its 32nd gathering between Jan. 8 and Jan. 11, now expect fewer companies to participate and less booth space to be sold. CES is on track to occupy 1.7 million square feet of floor space, about 5% less than the previous CES show.

About 15% fewer companies have registered to attend the event, compared with the show last year. Among the missing will be Philips Electronics NV. Philips declined to comment.

Meanwhile, a handful of companies are downsizing by using meeting rooms rather than renting out pricier showroom floor space, said Tara Dunion, a spokeswoman for the show's sponsor, the Consumer Electronics Association.

While a count doesn't yet exist, it is likely that products to be introduced at 2009 CES will be down from the roughly 20,000 that made their debuts at the 2008 show.

One bright spot is attendance preregistration, which is running on pace with last year's attendance of 141,000. "Will we exceed that? Who knows," Ms. Dunion said.

Behind the shrinking show is a sharply contracting global economy that is curtailing discretionary budgets for companies and consumers alike. Cutting travel and display expenses for conventions is a budget priority for many Fortune 500 companies, according to recent surveys. Many more companies have begun slashing their research-and-development budgets, meaning fewer new gadgets to display.

Some penny-pinching consumers also appear to be skipping CES, usually one of Las Vegas's biggest draws in January. Hotels have begun chopping their rates by as much as $75 a night, the show's organizers said in an email to registered attendees last week. Some hotels have vacancies during the show.

Recessions have proven difficult for conventions, particularly those aimed at consumers. During the 2001 recession, attendance at the Comdex computer show, which had drawn as many as 200,000 visitors, dropped sharply. The dot-com bust proved to be the beginning of the end for Comdex in Las Vegas. The show closed after 2003.