A view of CES: Storm clouds give way due to a little Apple-sourced magic

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A view of CES: Storm clouds give way due to a little Apple-sourced magic

Analyst Opinion – The 2009 CES was a scary show at the start because the economy and low turnout had many of us thinking it would be the last CES and the beginning of the collapse of the CE market. Doom and gloom surrounded the show initially, but were surprisingly dissipated by a company we had given up on entirely. This company used a little Apple magic to not only save themselves but put the excitement back into the show. Once the clouds lifted, there were actually a lot of cool products.  

Opening Microsoft keynote and CES problem

Bill Gates has historically done the opening keynote and was always a kick to watch. One of the most fun aspects was trying to guess which demo would fail, because one almost always did.
Steve Ballmer did this year’s keynote and while he re-articulated Bill Gates multi-screen Windows at the center of everything vision – and it came off without a hitch – it was almost as if he though he were talking to a group of investors and not a CES audience hungry for some positive news and energy.   While it was one of the better keynotes, this points to a problem with the majority of CEO keynotes at any event: They are slide-rich and passion-poor. I would think Steve Jobs’ example would have changed more people by now. Steve Ballmer, while I don’t think he bombed, he did play it too safe. CES needed magic to save it.

Despite the somewhat slow start, enough people downloaded the Windows 7 Beta when it became available at the end of the week to crash the Microsoft servers (this kind of interest reminds me of the initial Windows 95 wave). This had a lot of us thinking that it actually could drive a lot of much needed Consumer Electronics revenue in the second half, but only if Microsoft could somehow channel Steve Jobs, or given the general climate, a good revival meeting minister. Boy, if there was ever a need for a good revival meeting minister at the start of a show, CES was it.

Palm saves the day

There was a general tone that permeated the show making people believe that no one was really going to get that excited about anything and that the Consumer Electronics Market was going to crash. Palm, who apparently begged to differ, launched their Palm Pre phone in an Apple like event where Jon Rubinstein, who sometime ago was the heir apparent at Apple, showed everyone he was likely the only person in the world who understood Steve Jobs well enough to emulate him. Jon is probably the only man on the planet that might be able to fill Steve Jobs’ shoes.  

There was Steve Jobs magic in the air and the product was king with every feature solidly tied to a user benefit.  Palm had their audience cheering and hooting much like they would in a political rally or an Apple launch. Even at the end they had that one more thing, which in this case was an inductive charger for their possibly better (it won’t arrive for a few months) than iPhone product.
Virtually everyone I spoke with felt the new Palm Pre (I got to play with one and it is impressive) was the product that put the excitement back in CES this year and it did so by both creating a great phone  and emulating an Apple launch.  This felt like the iPhone and iPod launches and showcased that the right product could still fire up the consumer electronics market.

A lot of us here thought it was simply wonderful that Palm actually kicked a little Apple butt, however realized this product would show up when the third generation iPhone would arrive. Putting the fear of god in Apple may be dangerous. Still, it made the show.

Cool design was a major theme

In line with the Palm Pre, design permeated the show and Dell used statistics to argue they were the design leaders in their segment.  I’m sure Apple and HP would not agree, but I thought it was great that the company once known for cheap beige boxes was now contesting for design leadership.  To make the point, Dell previewed the Adamo notebook, which was an elite MacBook Air like product encased in high gloss metals and glass.   This thing was stunning to look at and was easily the best looking notebook computer I can ever recall seeing.  
The most interesting notebook however was the Lenovo W700ds, a massive 17” screen notebook with an integrated second screen hat slid out from behind the primary screen and a full digitizer next to the touch pad. If you asked for a notebook that had everything AND the kitchen sink this is the one you’d get. An impressive piece of engineering.

The most interesting computer was the fugoo prototype.  This modular design consisted of little $99 VIA based computers, which were dedicated to one or two functions and were docked to create unique and potentially flexible devices. What made it work was an iPod-like common hardware interface that could be built into a large number of accessories, machines, and automobiles (they had one in a coffee machine). It ran what looked like a custom OS, but it was actually a custom version of Windows XP making me wonder why others didn’t do this.
The coolest gaming computer was the HP Firebird.  You had to see this water cooled marvel with hybrid graphics, which pulled only about 150 watts of power and was dead quiet. Designed to sit on top of your desk and probably the lightest water cooled gaming PC ever to carry a major brand, this thing was just drop dead cool and relatively affordable. It is interesting to note that HP owned touchscreen PCs at this show, which put them at the middle of most Windows 7 demonstrations.  

The best new home music distribution products were the Linksys by Cisco Home Audio Solution products and Media Hub.  The first offering I’ve seen that is both affordable and comes close to matching the ease of use and whole house wireless capability of Sonos.  This nicely designed black set of products, each of which has its own display, was only a small part of the media vision the firm articulated.   

Wrapping up

There was just a huge cloud at the start of CES that seemed to surround everything largely because of the world news and economy. There were a lot fewer products at the show, but the result was more great ones floated to the top that otherwise might have been missed. One vendor showed everyone else that passion makes a difference and the show needed someone to remind us of that.  

CES needed a star, it needed someone like Steve Jobs, and Palm stepped up. Sometimes all it takes is one person or a small group to turn a market. It is exciting that it was the once great Palm; it is ironic that they did so by emulating Apple. I’m hopeful that others will learn from this and follow Palm’s lead, if they do this could eventually turn out to be a great year.      

Rob Enderle is one of the last Inquiry Analysts.  Inquiry Analysts are paid to stay up to date on current events and identify trends and either explain the trends or make suggestions, tactical and strategic, on how to best take advantage of them.  Currently he provides his services to most of the major technology and media companies.

The opinions expressed in this commentary are solely those of the writer.