Imagine this scene. You're 12 years old and you're let loose in a Toys R Us store for two days. That's the feeling I always get when attending the annual Consumers Electronic Show, or CES, held in Las Vegas each January. It's a 2-million-square-foot collection of all the latest video, audio, computer and wireless gadgets for home and car under one roof, manufactured by companies large and small from around the world.
There are huge exhibits from Microsoft (Nasdaq: MSFT) to tiny exhibits from small Taiwanese and Korean companies. More than 100,000 people attended this year's show, and it was hard to believe there was a recession going on outside the doors of the Las Vegas Convention Center.
On one level, the CES is the one shot for entrepreneurs, funded on a shoestring, to gain visibility for their products. On a grander level it's the coming together of titans for a Las Vegas style heavyweight-boxing match, when retail executives of Best Buy (NYSE: BBY) and Circuit City (NYSE: CC) face off with the executives of Sony (NYSE: SNE) and Panasonic to slug out business deals for the coming year.
Even though more and more consumer electronics products are sold each year ($96 billion in 2002 and $100 billion in 2003), there are fewer and larger retailers controlling the distribution channels. This creates a furious competition for the major brands and smaller companies alike to secure shelf space and gain visibility with the consumer.
This year convergence finally became a reality after years of talk by the likes of Microsoft, Sony and others. The combination of all things digital and wireless could be seen throughout the show. There were mobile phones with cameras, cameras with MP-3 players and devices to move your digital music, photos and video wirelessly from your computer and Internet to your stereo system and TV.
San Diego and California were well represented by a number of companies with products making their debut. From Kyocera's (NYSE: KYO) wireless division (www.kyocera-wireless.com) was the 7135 combination Palm PDA and mobile phone, a nifty clamshell design not much larger than a StarTac phone. Originally due out last fall, when it would have been the smallest device of its kind, it is now competing with similar devices from Samsung. When it does reach the stores it is expected to be available from Verizon for about $500.
San Diego-based CD3O (www.cd3o.com) introduced a line of clever wireless and wired stereo adapters, allowing you to send MP-3 music files from your PC to your stereo. It speaks to you rather than using a display, a clever solution since the device can be 20 or 30 feet away from where you're sitting. The top-of-the-line model (list: $249) sends the music wirelessly using an 802.11 connection (also known as WiFi), wireless broadband now being installed in many homes and offices.
Locally based EDigital (edigital.com) debuted an attractive handheld MP3 player that uses voice to navigate between song selections. It uses a 20GB hard drive to hold the contents of hundreds of CDs. It's one of many products inspired by the successful Apple (Nasdaq: APPL) iPOD, but their Odyssey 1000 looks like one of the better implementations, with an attractive design, a large screen and easy-to-use controls.
There were several innovative headphones introduced for mobile phones. Jabra (jabra.com), once a San Diego company that's now a division of GN Great Nordic of Denmark, introduced FreeSpeak, a Bluetooth-enabled wireless headphone. Prices range from $99-$179, depending on whether your phone is already Bluetooth enabled. This product allows you to eliminate the wire between the headphone and phone.
The Boom, a new headphone, was introduced by UmeVoice of Novato (theboom.com). Using technology they developed to make their speech recognition products work on the noisy floors of the NY Stock Exchange, the microphone is designed to focus on the speaker's voice only. In my testing it proved remarkably effective, even when a radio was playing at full volume in the background. Few callers realized I was using a headphone at all. They have an interesting market challenge ahead -- a superior product that can't be demonstrated in the store, looking like most devices selling for $30, but retailing for $149.
Another California company, Danger (danger.com) of Palo Alto, showed their recently introduced device, about the size of a bar of soap, that can be used as a phone, to send and receive e-mail (even with attachments), for Web surfing and instant messaging. Currently sold by T-Mobile as the Sidekick, it's one of the growing number of devices that allow you to send and retrieve e-mail from nearly anywhere. Retail is $100-$200 depending on the service plan.
Vonage (vonage.com) won my award for best marketing gimmick. They sent models around the show floor handing out $1 bills with directions to their booth. Vonage sells unlimited nationwide and local calling for $40 a month with international calling to most countries for 5 to 7 cents per minute. What's the catch? It uses your high-speed Internet connection, and circumvents the local phone company. This is otherwise known as Voice Over Internet Protocol (VoIP). Sound is said to be as good as a regular phone line and you can usually retain your current phone number. Currently Vonage has 10,000 subscribers and claims to be growing rapidly. I guess their dollar paid off in this case.
We'll keep an eye on how some of these products do and report back in future columns.
Baker is San Diego's Ernst & Young Consumer Products Entrepreneur of the Year in 2000 for successfully bringing to market Think Outside's folding keyboard for the Palm and other PDAs. He also has developed and marketed consumer and computer products for Polaroid, Apple, Seiko and others. He is the holder of 30 patents. He can be reached at email@example.com.