Did Ballmer bomb at a blah CES 2009?
Yawn … Vegas is a bit of a bore this week, or so it seems from my desk here in New York. I am not among the trimmed attendees at the Consumer Electronics Show this week, but from what our man on the scene (Brian Dipert) has been describing and from what I’m reading in other electronics industry-focused pubs across the Web (select the "Electronics Web" tab on EDN’s CES 2009 Hot Topic page for stories) the show’s usual glitz and glam, marked with celebrity appearances including Conan O’Brien and Steven Tyler in recent years, has lost some of its sparkle.
Perhaps that’s because attendance is down. While the CEA (Consumer Electronics Association), which hosts the event, maintains that attendance is steady, if not growing, at the still massive show, Brian reports plenty of elbow room, short cab lines, and less-than packed keynotes, which are CES abnormalities.
The obvious reason for this is the recession. Less revenue means less travel budget, especially for high-priced shows like CES for which rooms can run $400 a night.
But it could be that the CE segment is loosing its pull. When asked where semiconductor executives see opportunity for growth in the coming years, less and less are saying CE, the once obvious answer. More and more, military/aero, medical, and "green" power technologies are the response.
The market estimates from the CEA today illustrate this. Indeed, the CE industry continued to grow in 2008 despite the economic downturn, with the CEA estimating an increase of 5.4% over 2007. But the group projects that the CE industry will generate just less than $171 billion in shipment revenues in 2009, a $1.1 billion or 0.6% dip on 2008’s estimated revenue.
If 2009 does show a market decline, it will be the first in recent history for CE (see chart). And this year’s CES marked the first time that I recall CEA President and CEO Gary Shapiro wasn’t bounding off the stage with thrill at the show’s opening. You can watch Shapiro’s presentation via CEA’s CES Web site, as I did from NY.
I also watched Microsoft CEO Steve Ballmer deliver his first pre-CES keynote address via the site, replacing 15-time CES keynoter Bill Gates. Ballmer discussed the economy (of course) and, while trying to set a tone of optimism, warned of reduced expectations and scaled-back enthusiasm in such a financial environment. “No matter what happens with the economy, our digital lives will only get richer,” he said. "There’s no turning back from the connected world."
As he promoted Windows 7 and Windows Live deals with Facebook and Dell, and talked up an agreement that will see Verizon phones feature Microsoft search, opposed to Google, Ballmer outlined three opportunities ahead for the technology industry — the convergence of the PC, phone, and TV — and a "more natural consumer interaction" with devices that will incorporate speech and touch for a connected experience between devices.
After watching Ballmer, I closed the site page and my first impression was, like many other electronics industry watchers out there, that he bombed. That there was no sizzle to his keynote, no "stop-the-presses" product announcements (except for the gamers out there who can expect two new Halos this year).
Ballmer is usually a very animated person, who speaks in a boisterous voice with arms flailing and hand gestures that would make my Italian grandmothers look reserved. However, in his keynote, he was subdued and often off stage, handing demos over to other Microsoft execs. Starched shirt Gates has shown more enthusiasm and cracked more jokes in years passed, even when his demos didn’t work.
Where was Ballmer’s character, especially during the Windows 7 portion of his keynote? The beta will be available for download beginning tomorrow, and Windows 7 could be a huge step up for Microsoft, yet he barely smiled.
Perhaps his restraint was forced by the consumer bomb that is Vista. Why hype up another Windows product when the public is still soured by the operating system? Perhaps it was in apprehension of following Gates. Whatever the reason, in retrospection, Ballmer’s restraint was warranted in this economy and set what seems to be shaping into a new tone for CES.
Ballmer may not have had that gee-whiz factor that CES has enjoyed in previous years, but he instead relied on Microsoft’s existing product strengths, brands, and market dominance to drive the concept of a connected ecosystem across the PC, phone, and TV.
Looking ahead to 2009, we’re done with the comedy, rock stars, and flashy products. This year, it’s about practicality, getting the most for your money, and survival of the fittest, not the flashiest — and that may not be CE.
What do you think? Share your thoughts on the state of consumer electronics, Ballmer’s keynote, or anything else related to CES below.