Tuesday, January 4, 2011

No-show Apple's specter looms over gadget gala

If imitation is the highest form of flattery, Apple should be blushing at the Consumer Electronics Show this week as a flood of competing iPad-inspired tablets make their debut.

But as usual, Apple and its iconic chief, Steve Jobs, will not be among the high-tech industry heavyweights hawking their wares in Las Vegas, making the Silicon Valley juggernaut the biggest no-show at CES.

Still, Apple's presence will be deeply felt. About 80 tablets will be featured at the annual gadget show-and-tell as competitors Samsung, Toshiba, Vizio and Motorola release their versions of the touch-screen wireless mini-computers.

The reason is simple: The iPad and other tablets such as the Samsung Galaxy have connected with consumers despite a stubborn recession pinching pocketbooks.

"What the tablet has managed to do is create a new product category, and that doesn't happen all that often," said Jason Oxman, a senior vice president at the Consumer Electronics Association, the trade group that hosts CES.

As such, 126,000 retail buyers, sellers, engineers and marketing executives attending CES beginning Wednesday will see tablets take center stage along with faster smartphones, Internet-enabled TVs, and tricked-out cars that allow drivers to perform voice-guided computer tasks as they drive.

Retailers such as Best Buy and potential business partners and competitors will watch Verizon Wireless showcase devices that run on its newly launched high-speed mobile network. Verizon and Sprint Nextel have been expanding mobile Internet networks designed to send videos and serve up Web sites at speeds rivaling those of cable service providers.

During his keynote address Wednesday night, Microsoft chief executive Steve Ballmer is expected to unveil tablets running the Windows 7 mobile software, playing catchup to Apple in the tablet market.

Goldman Sachs analyst Sarah Friar recently downgraded Microsoft's stock, saying the company faces a lot of head wind in the tablet and operating-system markets.

And Ballmer will face competition at the show from Google, whose Android operating system will make a splash, with several tablets from Motorola and Vizio running a version of the platform called Honeycomb.

Although tablets and other mobile devices are hot, other technologies that played big at the consumer show have had less success in the marketplace. Among the bigger disappointments from last year were 3-D TVs, which have failed to attract mainstream interest - partly because of a lack of content and partly because users have been slow to accept wearing 3-D glasses.

Tablets such as the iPad and the Galaxy, on the other hand, seem to have achieved the right combination of price and versatility, with users able to watch videos, play games and read their favorite publications through apps. In its first six months, Apple sold more than 7 million iPads, whose prices start at $500. Technology research firm Gartner estimates that 20 million tablets were sold last year and projects that the number will triple this year.

"Tablets are a triple threat to video because it provides a more engaging TV experience than smartphones and feels more personal than a laptop," said Ross Rubin, executive director of industry analysis at NPD.

Being first has had its advantages. Apple - which prefers to host its own product launch events - is expected to announce an improved version of the iPad this year. The company's consumer success has translated into a soaring stock price, with the total value of outstanding shares topping $300 billion, making Apple one of the most valuable companies in the world.

"I expect the market will be challenging for any tablet vendor whose name isn't Apple, and especially challenging for anyone who's late to market," Gartner analyst Nick Jones wrote recently in a blog. Jones said that tablets may be all the rage but that they make up only 15 percent of the smartphone market.

Even so, Apple's lead may not be insurmountable. Google was relatively late to the smartphone market with its Android software. Now Android, the software for Motorola's Droid and Sprint's Evo phones, is the biggest-selling platform for smartphones in the world.

Web giants Facebook and Google will not have exhibits at the show either, playing a supporting role to their hardware partners.

Google's TV venture has encountered resistance from television networks, which are reluctant to share Internet-based TV shows. But the company is announcing a partnership with Vizio, which will carry Google's operating system and browser to create Web-enabled TVs.