Originally created 11/16/02

Comdex trade show shrivels alongside high-tech industry



SAN JOSE, Calif. -- Each fall for more than two decades, the high-tech world has descended upon Las Vegas to hype the industry's hottest wares and ideas at the Comdex trade show.

Whether focused on the first PCs of the '80s, the Internet in the '90s or the wireless gadgetry of recent years, exhibitors were assured hordes of executives, buyers and reporters.

But at the 23rd annual show, which starts Monday, the crowds will be smaller, the exhibit area more compact and the mood subdued. Comdex, like the rest of the high-tech industry, is sputtering.

"Comdex is not bigger than the industry it serves," said Fredric Rosen, chief executive of Key3Media Group, Comdex's organizer. "We didn't make the economy. We only reflect it."

Rosen expects visitors this year to stay steady with the 125,000 who attended in 2001 - an abysmal year because of the terrorist attacks, anthrax scare and sinking economy.

But the amount of exhibit space this year is expected to shrink, after dropping from 1.2 million square feet in 2000 to 805,706 square feet sold in 2001. Only 1,000 or so exhibitors are expected this year, down from 1,685 in 2001 and 2,337 in 2000.

Reports of Comdex's demise are nearly as predictable as falling leaves in autumn. During the high-tech boom, pundits said the show was too big and unfocused to maintain its clout.

Now, however, Key3Media is itself struggling with layoffs, losses and a stock price hovering around 2 cents per share. Several of its regional shows have been canceled.

In its third-quarter financial results released Thursday, the company said there is "substantial risk" it would be unable to make interest payments due Dec. 16 and may have to file for Chapter 11 bankruptcy protection.

A decision will be made after the fall show, the company said.

Analysts have speculated the show could suffer yet more cancellations or even be sold.

"The success of Comdex 2002 will likely drive the next moves for the company," said Michael Hughes, Tradeshow Week's director of research services.

It's assured Comdex 2002 will be a far cry from previous events, where Silicon Valley and the rest of the high-tech industry converged on Sin City to mingle, hype, party and do deals.

In some years the floor of the Las Vegas Convention Center - the largest exhibition space in the United States - got so packed that the show overflowed to the exhibit halls of nearby casinos.

Potential customers and curious reporters got routed into private meeting rooms within company exhibit spaces - or sent to meetings in hospitality suites at nearby hotels.

Now, trade show travel is among the first items to be axed as technology companies struggle to survive.

But it's not just the economy that is driving Comdex's woes. Companies are abandoning it for rival shows that target specific industries, such as consumer electronics and communications.

Former exhibitors IBM, Sony Electronics and Gateway plan only a minimal presence at hotel suites and not on the floor. Creative Technology Ltd. isn't showing up at all.

Creative, which literally rocked Comdex in 1989 with the introduction of its SoundBlaster audio PC cards, hasn't rented floor space since 2000.

Sim Wong Hoo, Creative's founder and chief executive, said his company decided to focus on January's Consumer Electronics Show instead.

"CES is more suitable for our products," he said. "It is better to focus our resources on one rather than to dilute ourselves. The two are too close. We have to pick one."

Wavecom Inc., which last year ran a booth on the Comdex floor, this year opted to rent only a hotel hospitality suite.

The maker of integrated wireless modules for cell phones, handhelds and other devices couldn't justify the cost of a booth.

Instead, Wavecom focused on a communications-specific show earlier this year, said David McCartney, vice president of marketing and business development.

Rosen said he understands the complaints, and since taking over the top spot of the show in 2000 after running Ticketmaster, he has made Comdex more receptive to the needs of its customers.

"We're listening to our people more," he said. "It's more than just being concrete salesmen."

This year, Comdex's theme is "Practical Innovation" and its exhibit space will be divided into sections, so the show should seem less chaotic.

Rosen said Comdex remains relevant, with 400 new products to be unveiled and keynote speeches from Microsoft's Bill Gates on Sunday and Hewlett-Packard's Carly Fiorina on Monday.

HP has got 7,000 feet of rented display space at the show

"We just don't see Comdex as an event to hide," said HP spokesman Tim Marklein. "We see Comdex as an event to showcase."

Microsoft, which rented 28,000 square feet of exhibit space, also views it as a cost-efficient way to meet partners and customers, said Larry Cohen, Microsoft's marketing director.

"Comdex is a no-brainer for us," he said. "There's a very large number of partners, press and analysts. It becomes very easy for us to justify a presence."

On the Net:

Comdex: http://www.comdex.com/fall