Gearing up for CES...and the Adult Expo?

It's not even Christmas, yet everyone in this industry is already gearing up for the 2009 International CES in Las Vegas. You're weeding through hundreds of e-mail product pitches and meeting requests. Setting up booth tours and plotting out a daily plan that allows you to cover as much ground as possible, and meet as many clients (and potential clients) as a day and evening will permit. Are you attending, and have you created a schedule yet?

Judging from e-mails requesting that I come see a nifty new gadget, or advising that on-site interviews can be set up with key manufacturer executives, it's clear that there will be plenty to see at the show. The most puzzling e-mail request I received, however, originated from an exhibitor at the Adult Expo, which runs concurrent to CES, inviting me to register, and visit their booth at that show. Two things initially crossed my mind. First: where do they see a tie-in between my industry and theirs? And second: how on earth did this person gain access to my e-mail address since the two expos have nothing to do with one another other than sharing the same city as their venue?

The person was pitching an iPhone application that optimizes adult films for viewing on the portable device's screen. Ahhh, now I get it. There is a clear tie in. Still: would traditional CE journalists cover this?

In many ways, when you think about it, the adult industry is a huge part of the consumer electronics industry. A few years ago, people were even predicting that X-rated films could very well be the deciding factor between which format won the high-definition DVD war - Blu-ray or HD DVD. In fact, this particular firm claims to have been filming in HD for the past 5 years! There are lucrative opportunities there, that's for certain. But you're walking a fine line if you consider covering this side.

With that said, while the Adult Expo won't be on my radar during CES (as if we don't have enough ground to cover already!), it'll be interesting to see how that area of business could eventually become further entwined with CE; especially with HDTVs, the Internet, and downloadable content making waves as the way of the future for content of pretty much every kind. Yes, including the adult kind.

As for CES, many still wonder whether attendance at the show will be down. It probably will be, but I doubt to very noticeable proportions. Exhibitors will have booked their booth space a year in advance, which means there will be just as much product on the show floor. From an attendee perspective, we'll most definitely see fewer feet roaming the aisles. But it will still be a packed show floor. And if some of those people decide to take the Adult Expo up on their offer and mosy on over to those exhibits at the Sands Convention Centre, so be it. But rest assured that the only scantily clad "booth babes" you'll see in the mainstream media will be holding a gadget of some sort, or standing nearby a line of flat-panel TVs.

DVD Player Free with Cable Purchase?

I just received an e-mail from a CE industry member with the following subject line: the state of the consumer electronics business. The message read as follows:

Our business has certainly changed. “free hardware” if you buy a “hook up cable”?
I am reading an ad from [retailer name withheld]
FREE- [brand name withheld] 1080p upconverting DVD player when you purchase a [brand name withheld] HDMI Cable 1080p cable for $149.
I am wondering how long it will be before the ads read “FREE 46” LCD’s” just to sell a hookup cable

Wow. There's a powerful message! I am absolutely stunned if this really is a valid promotion. It's no secret that retailers make more money on accessories than they do on big-ticket items, like computers or flat-panel TVs. Regardless, the PC and flat-panel TV still remain the central piece of hardware within a home theatre or computing system. To offer something like a DVD player for free when you buy the cable that connects it is just crazy! Sure, DVD players are available for $50 these days. But that still doesn't explain how we've come to a point where retailers are pushing the sale of the cables more so than the major hardware. Aren't we supposed to be working on upselling the customer to the cable with his big-ticket purchase?

What does this all mean? Has the focus completely shifted to making a sale (and profit) in-the-moment rather than building a relationship with the customer, meeting his needs, and providing an experience that will make him want to return? I'd be lying if I didn't say that I love a good deal whenever I can get my hands on one. But such a promotion simply makes the DVD player look like an unimportant part of the home theatre equation when, in fact, it's an integral part. Maybe there's more to this than meets the eye. Perhaps this is a sign that Blu-ray has already taken over. It must have if "regular" upconverting players are now practically being given away.

Note: I purposely removed the retailer and brand names from the original e-mail copy simply because I didn't think they were needed in order to illustrate the point.

Should Microsoft Buy Yahoo!?

Last week, Microsoft placed a whopping US$44.6 billion offer to purchase shares of Yahoo!, which has been struggling as of late due to stiff competition from companies like Google and YouTube. In December 2006, Yahoo! underwent a major reorganization, and recently, it has been rumoured that hundreds (or even thousands!) of jobs could be cut from the company. So when Microsoft swoops in with a major bid that likely no one else could (or would!) attempt to beat, is this the Golden Ticket Yahoo! has been looking for? More important: will this spell disaster for consumers everywhere?

It's no secret that takeovers are essential in this industry for a number of reasons. Sometimes, it's to build capital in order to invest in things like R&D to create the amazing products we see today. Other times, it's to help effectively compete against major powerhouses: two (or more) heads are better than one, right? Other times, it might be a mutually beneficial relationship, where each company can compensate for a particular weakness by utilizing the strengths of the other. But many times, the reason is the sheer need to be number-one, and take out anyone in your path.

Before you jump to conclusions, I'm not saying this is Microsoft's intention nor motivation. But the bid wasn't exactly a "hey, we'll throw a bone out there and see the reaction." It was a move that would almost definitely obliterate all other bidders, and dangle a carrot in front of Yahoo!'s eyes that might just be far too tempting to resist.

Microsoft already owns plenty in the online arena; and we all know about its dominance in computing. The company recently made sure it had a major foot in the door of the growing social networking world by securing a US$240 million stake in popular Website Facebook.com. If Microsoft combines forces with Yahoo! as well, what sort of "competition" will be left?

Sure, Google isn't an "innocent" party in this equation, owning major properties like YouTube, and online advertising behemoth DoubleClick. But at what point will it become absolutely impossible for any company to get their foot in the door, and the power be placed in the hands of too few?

Many argue that we see the same sort of problems in the cellular phone industry in Canada, where three main carriers dominate, only one of which operates on the worldwide standard of GSM. However, the opening of the wireless spectrum to new entrants this coming May could change this. Meanwhile, the ongoing debates about a potential merger between satellite radio providers Sirius and XM in the U.S. lead to the same antitrust-like issues.

Bottom line: acquisitions and combining forces certainly help to advance technologies in ways that one company might not be able to accomplish. But we have to draw a line somewhere.

On that note, I always laugh at friends or family that want to "boycott" a particular brand because of a bad experience. Half the time, the brand they decide to go for instead is actually owned by the same parent company, showing that their efforts are, quite frankly, futile. The sad truth is that there are so many conglomerates out there, that the company that makes your socks probably also owns the place where you had dinner last night, along with your favourite shampoo. Business is business, of course. But competition is what adds to the excitement, and leads to continual innovation.