Dow Jones Business News
Portable Devices Overrun Comdex But May Not Lure Users
Wednesday November 20, 12:42 pm ET
By Mark Boslet, Of DOW JONES NEWSWIRES
LAS VEGAS -(Dow Jones)- Handheld computers, cellular telephones and high- priced laptops may be quite a bit changed by the end of next year. But it is unlikely the new crop of machines displayed or outlined at this week's Comdex computer trade show will lift the industry out of its financial doldrums.
The annual show has taken a clear turn away from the mainstay desktop computers that have propelled the high-tech business in the past. Alternative devices were the talk of the event, whether they fit in the palm of a hand or allow handwritten notes to be stored on a hard drive.
However, many of these devices don't yet appear mature enough to push consumers and businesses into a wave of buying.
The still massive gathering has been pared down from the high-flying years at the close of the last decade. Taxis, restaurant reservations and hotel rooms are more readily available than when the attendance exceeded 200,000.
Yet even at this year's more manageable 125,000, the aisles of the Las Vegas Conventional Center were jammed with technology buyers and product designers. Knots of onlookers gathered whenever a song-and-dance number hawked the latest product.
Most noticeable, however, is how portable devices with wireless network connections have stepped into the show's spotlight. These machines have gotten more powerful, store more data and come with added features such as digital cameras, color screens, and wireless connections and headsets. By the end of next year, cell phones will even begin responding to spoken commands for dialing, a big advantage for use in a car.
Reflecting how PCs are no longer at the center of innovation, Nokia Corp. drew broad attention with its introduction of the 6800 color phone with a hidden keyboard for typing e-mail, an Internet browser, an FM radio and calendar software. Dell Computer Corp. (NasdaqNM:DELL - News) and Hewlett-Packard Co. (NYSE:HPQ - News) brought out inexpensive yet powerful handhelds, sparking what is likely a new round of competition between the rivals.
Within a year's time, says Hans Geyer, a vice president at chip maker Intel Corp. (NasdaqNM:INTC - News) , which has accelerated its push into the device market, most phones in the U.S. will come with color displays, and half will have built-in cameras for taking still photographs and 10-second video clips.
But some of the devices have yet to grow up. Microsoft Corp. (NasdaqNM:MSFT - News) hopes its handwriting-enabled Tablet PCs, which computer makers will offer for close to $ 2,000, will attract office workers looking for a "state-of-the-art laptops" says Leland Rockoff, a product group director.
The company's publicly stated sales goal is 500,000 units in the first year, though internal targets are higher, Rockoff says. Some analysts believe these ambitious goals won't be met.
"I m not sure how well they will do," says Gartner Group analyst Ken Dulaney, who projects 450,000 machines will sell.
The machines are expensive, and the handwriting software isn't well integrated with the Windows operating system, Dulaney says. A machine from HP also runs a chip from financially troubled Transmeta Corp. (NasdaqNM:TMTA - News) , which may turn off corporate buyers. The products may end up instead being attractive in niche markets, such as with hospital workers and retail shelf managers.
"I think it's going to take a couple of iterations" of the product before it catches on broadly, he added.
Dulaney also believes the small screen on the Nokia 6800 similarly may hurt its adoption.
PC Market On 'Pause'
Not surprisingly, the show offered little relief to a personal-computer market that Gartner Dataquest analyst Charles Smulders expects will increase just 1.5% in the fourth quarter and 7% next year.
"I actually think we're in a pause," agrees Patrick Moorhead, vice president at Advanced Micro Devices Inc. (NYSE:AMD - News) .
The debate in the U.S. over copyright protection of intellectual property on the Internet has stifled the spread of digital video and audio and the demand for new computers, he said. Moorhead vows the business isn't "turning into the TV industry," where growth has permanently slowed. But knowing when a rebound will come is difficult.
Many executives nevertheless describe doing business at the show as worthwhile.
"We found a lot of people are going to Comdex," says James Maniscalco, chief executive of Nobilis Software Inc., referring to the partners and customers he wanted to see.
"It's easier getting from the hotel to the convention center," adds Intel's Geyer.
While sobering, the show also had its futuristic side. Thin, wireless keyboards that could be stuffed in the pocket of a suitcase rivaled digital cameras no rounder than a 50-cent piece. A Toshiba laptop boasted a three- dimensional display screen.
Personal Computing Environments showed off a computer workspace made up of a padded bucket seat hung from a circular metal frame. A pair of 27-inch monitors were suspended from metal tubing overhead.
"It's all about comfort," said Chief Executive Allan Quattrin, who showed off the workspace for the first time.
A more practical innovation came from Broadcom Corp. (NasdaqNM:BRCM - News) , which unveiled an 802.11g wireless chip with five times the performance of wireless chips today. The product will be available in December, says vice president Jeff Thermond.
-By Mark Boslet, Dow Jones Newswires; 650-496-1366
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