Page last updated at 11:13 GMT, Monday, 12 January 2009

Tech show in long economic shadow

By Mark Ward
BBC News technology correspondent, Las Vegas

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The sky may have been clear and blue over Las Vegas during the giant Consumer Electronics Show (CES)but few of the 130,000 people attending failed to see dark clouds on the horizon in the shape of a looming recession.

"It's not an easy situation," said Kevin Lee, vice president of technical marketing for electronics firm Samsung. "It's very tough for everyone."

The show opened with sessions detailing just how bad things were going to get in 2009.

Shawn DuBravac, an economist for the Consumer Electronics Association (CEA) said it was well-known that every dollar decline in wealth means a drop of 3-4 cents (2p) in consumption.

Plunging stock markets meant that a lot of wealth had disappeared, he said, and the makers of consumer electronics were likely to feel the effect as the pennies get scarce.

And, said Mr DuBravac, those effects were already making themselves felt.

"One of the things we have seen is consumers already start to look at their purchases in a realistic manner and ask 'What can I delay or do without? What kind of substitutions can I make?'."

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The CEA had noticed a "bulge" in sales of flat panel TVs of 30-40in across, said Mr DuBravac. This suggests that instead of buying the biggest set they can afford, many people are scaling back their ambitions.

In recessionary times when discretionary income is squeezed, many families indulge in what is known as "cocooning", said Mr DuBravac.

This means they tend to stay in and entertain themselves at home rather than go out to dinner, see a movie or go to a rock concert.

And CES showed that if people do choose to stay indoors then the next 12 months could mean big changes for one of the oldest icons of home entertainment - the TV set.

'Cocooning'


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Sean Maloney, Intel

Sean Maloney, senior vice president at Intel, said the way TV sets were used at CES was instructive.

"There is an ocean of flat panels here and they are all orphans," he said. "None are connected to the net." Some initiatives at CES revealed how that was starting to change.

Both Samsung and Toshiba demonstrated ways of putting so-called Widgets on TVs at the show.

Widgets are self-contained applications that can be added to a browser bar on net-connected TV sets that give access to web-based services such as weather reports, stock tickers and the like.

The network connections are also helping to add much more to any high definition film being watched on a flat panel TV.

For example, Sony showed off the latest add-ons for its BD Live technology that gives owners of some Blu-ray movies access to a constantly changing roster of extras.

In late 2008, owners of The Dark Knight on Blu-ray got the chance to watch the film as its director Christopher Nolan gave a live commentary.

BD Live also lets a group of friends who all own the same disc chat in real time as they watch and on some films will let owners generate their own content from disc extras and upload and share this via their player.

Sony is now including BD Live content with all the movies it produces and it is likely to become much more common on Blu-ray discs produced by other movie studios.

Even simpler

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Flatscreen makers are among the few players in the technology market seeing benefits from the economic downturn, says Samsung's Kevin Lee

CES was also notable for the emphasis on 3D TV and the number of manufacturers producing sets capable of handling stereoscopic 3D images. At the very least, a TV set needs to be capable of handling High Definition images to display a decent 3D picture.

However, despite the evident interest, most here at CES predicted that it would be a long time before 3D reaches mass adoption.

Said Mr Lee from Samsung: "Customers do not want to watch only broadcast programmes on their TV. They want every kind of digital content."

But, said Mr Maloney, for many people connecting up their high-definition set to anything more than a console or DVD player was challenging. Few would attempt to link it up a computer and use it as a central web-browsing point.

"There's a need for things to be even simpler," he said, adding that he expected to see initiatives in 2009 aimed at simplifying the process of connecting many different devices together and getting them all to work together.

And he urged consumer electronics firms to invest in research during the downturn rather than abandon efforts to produce new products.

"You recover from recessions with tomorrow's products, not today's," he said.

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