This year’s COMDEX/Las Vegas showcased all that is hot with investors right now. While there were many cute and innovative technologies, one got a slight sense of desperation from the show floor. April’s tech stock plunge has sorely sobered the market and it seems as if many companies are attempting to simply throw together keywords that investors can rally around as a way of appeasing skittish investors with “safe” options for their money. Consequently, keynotes focused on openness, standards, and the interoperability that would be required for innovation, instead of innovation itself. Old, failed ideas were brought out of the closet and dusted off to seem new and inventive, sometimes succeeding. There was a move towards showcasing hardware instead of Internet services – at least hardware can theoretically make a profit. Even Oracle seems to be attempting to turn their software into a hardware play via their new Oracle 9i Server Appliance partnership with Compaq. (Rumor has it that but three days prior, their partnership was with Dell.) A number of services that were shown had a hardware tie-in; one example of this being biometric solutions that allowed for single sign-on with combinations of biometric devices (fingerprints, iris scans, voiceprints, etc.).
But with so many companies focused on hardware, the competition ends up evolving even advanced hardware into a commodity. With commoditized hardware, standardized protocols that allow for software commoditization, and Application Service Providers (ASPs) falling out of favor with investors, a grim reality becomes apparent: most of the companies on the show floor don’t have a viable business model in today’s harsh “post-IPO” New World Order. As we see below, the dot-com boom is over. April’s NASDAQ butchering left investors gasping and pockets empty. Things haven’t gotten better. The “easy money” is gone now, in the pockets of those who cashed out quick and are getting a good laugh at the whole situation from whatever Caribbean paradise they’ve escaped to. Those who remain must deal with the difficult realities of business; namely, making a profit.
Consequently, this difficult climate has led to such interesting “group panic” plays as Bluetooth. Bluetooth is a short-range (10m or less) RF protocol to allow for low power, megabit transmissions between devices like cell phones and PDAs. The idea is that if Bluetooth technology is everywhere, it’s pretty useful: I could theoretically sync my Palm Pilot with my cell phone without requiring a custom cable to link the two. Bluetooth was essentially designed as a “cable replacement” technology. While that sounds useful (who wants cables?) what’s not often mentioned is that infrared technology is already ubiquitous and obviates cables today. I today can HotSync my PalmPilot to a laptop, play Battleship against another Palm, and even access the internet through a mobile phone, all without any cables at all, using existing, low-cost infrared technology built into all of those devices already. At an analyst meeting before Gates’ Sunday keynote, one of the analysts (from IDG) predicted that there would be hundreds of millions of devices with Bluetooth deployed in the coming year. But the next analyst asked the several-thousand strong tech crowd how many of them had any Bluetooth-enabled devices. Not one person raised a hand. Perhaps I’m just being skeptical, but it seems a little improbable that in less than a year a technology will be able to go from zero to mass-deployment. Many of the devices shown at COMDEX were small, cute, and useless. Various companies even proposed using Bluetooth as a home networking standard, despite the fact that all your computers would need to be within 10 meters of each other and could only connect at 1mbps.
Other home networking technologies looked promising, however. Powerline networking, once the laughingstock of networking, is making a resurgence: new, cheap DSPs are allowing for more advanced mechanisms for transmitting data over noisy lines, up to 10mbps. Phoneline networking companies were out en masse with the new HPNA 2.0 11mbps standard. Two wireless networking groups were also widely represented: WiFi (802.11) and HomeRF, each supporting multi-megabit wireless data rates.
ADSL modems, computer cases, large LCDs, and MP3 devices were shown in sleek new form factors and most were available very cheaply, further demonstrating the commoditization of such hardware. With so many pieces of excellent, cheap hardware, most companies on the floor were simply searching for US distributors, having already developed working designs and having lined up manufacturers.
Speaking of LCD displays, they were everywhere: huge, gorgeous plasma displays, 22″ LCD flatpanels, and embedded LCDs. There was nary a CRT monitor in sight. There wasn’t much hoopla around them, they were simply pervasive throughout the show.
Biometrics and security companies were everywhere, using everything from signatures to irises to fingerprinting mice to face recognition to authenticate a user to a computer and to web financial services.
Companies with interactive demonstrations, large to midsize booths, exciting technologies, and representatives with a solid grounding in English held the most attention, with a handful of exceptions – sometimes a fun product can sell itself and at times a boring product can fail to captivate, no matter how much money is poured into advertising.
PDA companies such as Palm and Handspring, had large displays at COMDEX. Even if there were few important announcements, it was interesting to see how large these companies have grown and how enterprise-centric they truly have become. Several Handspring Springboard modules were released, but most were more expensive than reasonable: the Springboard phone module goes for $300 with service activation; considerably more than even Nokia’s top-of-the-line phone goes for in a service bundle (and it isn’t even actually available yet – module announcements without products have plagued Handspring for the last year).
Surprisingly, GPS and fiber-optic technologies seemed to take a backseat at this show: only a handful of devices had GPS integration or any kind of tracking system and there were hardly any demonstrations of fiber devices and technologies, despite their continued flourishing in the marketplace and continued optic research and innovation.
In short, COMDEX was full of flashy, cute hardware, backed by companies that put on bright smiles to allay investor fears that money will be scarce in the coming days, despite their poorly-masked insecurities as to the viability of their own business models. Announcements of standards and openness, while nice, are indicative of deeper problems in the market, and it’s unclear how they will be solved and where success will be found in the near future.