After grim holiday sales of PCs, the giants of the computer world are laying their bets on smaller, cheaper devices to drive future sales.
When the mammoth Consumer Electronics Show kicks off Saturday in Las Vegas, household names in the PC world, such as Microsoft and Intel, will take centrestage. To be sure, the biggest consumer electronics names will be there too, but the energy this year will largely be supplied by PC makers. PC executives will use the four-day trade show to hawk new products and preview future ones. They will also dominate the speeches. Microsoft chairman Bill Gates and Intel chief executive Craig Barrett will deliver keynote addresses and Palm and America Online executives are also slated to address the show.
"Consumer electronics is no longer defined by the Sonys and Panasonics," said Tim Bajarin, an analyst and president of Campbell, California-based Creative Strategies. "I absolutely believe that the PC guys are going to be big players there."
That's not to say that traditional consumer electronics giants won't make a splash. For instance, sources said, Sony plans to unveil several products, including the eVilla, an Internet appliance with a focus on entertainment.
The blurring distinction between computers and consumer electronics is a result of the digital entertainment boom. Now that consumers watch DVD movies and record CDs on their computers, PCs are moving into the domain of home entertainment.
At the same time, many of the staples of the living room are becoming more like computers. For example, the digital video recorder is basically a computer that replaces a VCR.
For PC-oriented companies, the move into entertainment gear also offers the hope of an escape from sagging computer sales.
Intel, for example, plans to show off an MP3 player it announced Tuesday, as well as a Web-surfing tablet and an email pager similar to Research In Motion's BlackBerry.
The other half of the Wintel duopoly, Microsoft, will highlight its upcoming Xbox game console and its Ultimate TV, which marries satellite television, WebTV and digital video recording. The company will also highlight new Internet devices based on the Windows CE operating system.
Gates' focus on Xbox at the trade show will be particularly important for Microsoft because the company needs to convince developers and gamers that the console is worth waiting for, said analyst Richard Doherty of The Envisioneering Group.
"He's basically there to level Sony and scare Nintendo," Doherty said.
Although Microsoft will be talking up the Xbox, rivals Sega, Nintendo and Sony won't be touting their consoles at the show. That makes sense to Gartner senior analyst PJ McNealy.
"Sony and Sega already have their devices on the market," McNealy said. "Microsoft and Xbox are still trying to build brand awareness."
Digital music will be big again this year at the trade show. That's not only due to the fact that there are newer digital-audio players with better sound quality and somewhat improved storage capacity. It's also because music is what prompts many people to buy their first electronics device, according to McNealy.
"It's easy to understand and people want to use it," he said.
Chipmaker Texas Instruments will focus on music, hosting a round table discussion on the state of digital music and bringing in alternative rock band Smash Mouth to play at its private party.
Following will be other highlights of the trade show:
- In his keynote, Palm chief executive Carl Yankowski will unveil a service that will allow Palm owners to use the handheld's infrared port to perform new tasks
- Palm will also show off a device it has developed with car parts giant Delphi Automotive Systems. The device allows drivers to retrieve information from their Palm V or Vx handhelds and then make calls via certain Ericsson mobile phones -- all without lifting a finger. The two companies plan to show off the Communiport Mobile Productivity Center on Saturday.
- Sony is expected to show off the first wireless modem for its Clie handheld, with GoAmerica providing the Internet service. However, Sony does not plan to formally announce the unit until the middle of the year, when the wireless modem is expected to ship for around $300. Sources said an update to the Clie, adding a colour display and improved multimedia, is planned but won't be announced at the trade show
- Sony is expected to offer more details about its Vaio Slimtop Pen Tablet, which it demonstrated at last fall's Comdex trade show. The PC comes with a flat-panel display and a stylus instead of a mouse. The flat-panel display can sit upright or swivel into a near-horizontal position and allows a person to use the stylus to navigate and draw on the screen. It is expected to ship in the middle of the first quarter for just under $3,000 (about £2,000).
- Microsoft's Pocket PC group isn't planning any major announcements at this week's trade show but will offer a hands-on demo area on the show floor where convention-goers can give Pocket PC-based handhelds a test drive, a company representative said.
However, Microsoft does plan to highlight new devices that use Windows CE. One of those is Siemens' Web-surfing tablet with built-in wireless networking. Known as the Simpad, the device is scheduled to hit the market in late spring
- Nokia plans to announce that it is bringing its advanced set-top box, which uses an Intel chip and the Linux operating system, to the United States. The Nokia Media Terminal, as the set-top is known, receives digital TV and video-on-demand, can play and store MP3 files, and can connect to a printer as well as other devices such as a digital camera. The device will also offer high-speed Internet access.
- Barry Schuler, AOL's president of interactive services, will speak Monday about the company's AOL Anywhere strategy. The online giant will also be showing off the AOL Mobile Communicator, a recently launched instant messaging handheld developed with Research In Motion.
News.com's David Becker contributed to this report.
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