CES not always the greatest guide for commercial success

Sunday, January 8th 2012. | Internet News

CES Central HallWe’ve seen it more than a few times.

A company at the Consumer Electronics show wows the tech crowd in Las Vegas with its new product. It’s sure to be a hit, the tech press concludes. Then everyone heads home, gets some sleep, and months later we ask ourselves, “Whatever happened to (fill in the blank)?”

Despite the massive size and reach of CES, the show can actually be quite insular. With so many companies looking to display their latest and greatest products, the media is left scrambling to cover as much as they possibly can, often with little time to employ critical analysis. It’s not anyone’s fault; that’s just how sprawling the show has become.

As a result, reality can get kind of skewed at CES, and being the hot product or trend at the confab doesn’t necessarily guarantee success in the “real world.” In fact, the “it” product in recent shows has proved to be anything but in the following year. So what does that mean for ultrabooks, which are already shaping up to be some of the most talked about products? Well, no one can be sure until the products hit store shelves. But the prospects for ultrabooks almost certainly won’t be anywhere near as cheery as this show will make them sound.

“CES is not a great bellwether for success,” said Michael Gartenberg, an analyst at research firm Gartner. “It’s a great way of seeing what the industry is thinking will be successful, or hoping consumers will buy. It’s not an indicator of what consumers will buy.”

Sure, CES can boast its fair share of hit products that make their debut at the show. Microsoft’s original Xbox was shown off for the first time at CES in 2001. DVDs and Blu-Ray were both highlights of past shows. Plus, there are few other venues where a company can reach so many industry taste-makers, media members, and analysts at one time.

But for all the past successes, consumers have rebuffed a lot of recent trends that have emerged from the show.

Hot one second, cold the next 
In 2010, 3D televisions were the hot item, and were poised to drive the next wave of consumer adoption, just as high-definition TVs did in the past. Avatar had hit theaters a month earlier, giving companies something to point to as a potential killer app for consumers. Yet consumer response was tepid, and 3D never accelerated sales past the normal pace of replacement cycles.

Even a year ago, television manufacturers were still insisting that 3D was going to play an integral role in their strategy. This year, look for the television manufacturers to focus more on the “smart” features of their products, including better access to the Web and apps. While the companies continue to support 3D, it has become more of a side feature that will be downplayed this year.

Remember the eReader phenomenon? 2010 was also the year that a slew of electronic readers emerged in an effort to emulate the success of Amazon’s Kindle. Products like Hearst’s Skiff and the Plastic Logic Cue were shown off, only to disappear shortly thereafter (or, in the Skiff’s case, to die before hitting the market).

Two years later, and the Kindle remains a dominant product in its category, while many of the products that debuted at that CES never actually reached the market. To be fair, Barnes & Noble’s Nook reader has also been successful, but it didn’t debut at CES.

While Microsoft had a hit with the Xbox, it couldn’t replicate that success when it showed off the Slate PC for the first time. That aborted product never really materialized after the iPad came out months later and blew it away.

“Microsoft has a long history of announcing things at CES keynotes that either never see the light of day or were outright flops,” said Avi Greengart, who covers consumer products for Current Analysis.

Speaking of tablets, they were one of the biggest trends last year as company after company scrambled to catch up to Apple’s blockbuster iPad. Companies were vying to be the first to arrive with a tablet running on Honeycomb, or Android 3.0, the first version of Google’s mobile operating system designed specifically for tablets.

Motorola Mobility eventually won out, and proudly showed off the Xoom at a heavily hyped press conference. Despite garnering awards and praise for the Xoom, sales never really took off until it was heavily discounted, and Verizon Wireless and Motorola even took the extra step of renaming the successor tablet Xyboard, an even more head-scratching moniker. Its other big smartphone, the Atrix 4G, worked with a unique laptop-like dock that impressed industry observers at the show but failed to pique the interest of the average consumer.

Motorola also wasn’t alone in its lack of tablet success. A slew of companies announced tablets that were ready to run for another few months, just in time for Apple to launch its iPad 2 and lap the competition. Another Honeycomb tablet, LG’s G-Slate, was announced at CES by T-Mobile USA, but it quickly disappeared. It wasn’t until the Amazon Kindle Fire came out in November that many saw a legitimate competitor to Apple.

Motorola wasn’t the only mobile-device company to make a big splash at CES. Palm had a major presence at the conference in 2009 when it pulled back the curtain on WebOS. At the time, the phrase iPhone-killer was thrown about liberally. But we all know where that went, right?

The next great hype: Ultrabook 
For CES, 2012 is shaping up to be the year of the ultrabook. A number of manufacturers plan to unveil their version at the show, and Intel will be spending a lot to make sure you know what an ultrabook is, and convince you that it’s a whole new product you must buy.

The truth is it’s a thinner, sleeker laptop that consumers may or may not necessarily need. It’s a response to Apple’s MacBook Air, which the company has never tried to define as a whole new product (hence sticking with the MacBook name).

“Calling something a new product category doesn’t make it so,” Gartenberg said. “It’s not a new product category. It’s a laptop.”

Whether consumers will ultimately want to buy one will depend on their design, price, and ability to distinguish themselves from what’s already out in the market. Price, in particular, will be a major factor, since the products tend to sell at a premium to normal laptops.

But with so many companies churning out their own version, there are sure to be losers. It’s just unclear how many there will be.

Regardless of the media response, it’ll take several months to shake out whether this product will end up closer to the Xbox end of the success scale or belong in the same notorious family as the doomed Slate PC.

“Sometimes, what is launched in Vegas should stay there,” Greengart said.

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