LJWorld.com

The International Consumer Electronics Show, the largest trade show in the U.S., opens this week in Las Vegas with a full slate of giant TVs and inventive gadgets, despite the pall of a recession hanging over the industry.

The economic downturn will temper the normally dizzying extravaganza, and some attendees are wondering if the whole technology trade show business is past its peak.

“I’m talking to the companies who are sending people, and they’re sending two instead of 10,” said Forrester Research analyst James McQuivey. “It’s going to be a shadow of itself.”

Last year, 140,000 people went to the show, and there were 2,700 exhibitors. The Consumer Electronics Association, which is hosting, expects the same number of exhibitors this year for the 42nd annual show, but on a slightly smaller floor space: 1.7 million square feet, or about 29 football fields. That’s down three football fields from last year.

Jason Oxman, senior vice president of industry affairs at CEA, said several companies have asked to buy meeting-room space, rather than booths on the showroom floor. They’re more focused on meeting customers and doing business than putting on large displays, he said.

That fits with a cooler economic climate. The booths are chapels to conspicuous consumption where companies one-up each other with bigger and badder gadgets, like the 150-inch plasma TV Panasonic Corp. displayed last year.

Oxman expects more than 130,000 attendees, based on the number who have registered. But registering was free before Oct. 31 (it’s now $100), and companies wanting to save on airfare and hotels may be deciding not to follow up on their registrations.

“We’re still viewing CES as a major event for the industry and a launch point,” said Tim Alessi, the director of product development at the U.S. arm of South Korea’s LG Electronics Inc. The company will be showing 35 new LCD TV models, among other products. But at the same time, LG is looking at how many employees it really needs to send, and Alessi expects the number to be down slightly from last year.

“That said, we still have a huge booth staff and a lot of dealer and partner meetings set up,” Alessi said.

Alessi doesn’t expect the economic downturn to be reflected much in LG’s product lineup. It won’t suddenly be emphasizing smaller TVs, for instance. Nor will the economy likely have a big effect on what other manufacturers are showing, in large part because consumer spending was relatively healthy until late in the year, and companies haven’t had time to adjust.

It wasn’t until the holiday shopping season, after the credit crunch had turned into a full-blown crisis, that consumers really pulled back. U.S. sales of electronics and appliances fell almost 27 percent from Nov. 1 to Dec. 24 according to SpendingPulse, a division of MasterCard Advisors, though appliances probably saw a greater decline than electronics. Sales of TVs and laptop computers held up relatively well, according to NPD Group, but there was no new product category to energize the market like GPS units did the year before.

And with no quick economic recovery in sight, industry watchers expect gadget makers’ pain to continue. Research firm DisplaySearch sees sales of flat-panel TVs falling in 2009 for the first time since they appeared on store shelves a decade ago. Industry bellwether Sony Corp. said in December that it would cut 8,000 of its 185,000 jobs, shut plants and reduce its investment in electronics.

But McQuivey, the Forrester analyst, sees more than a temporary economic slump affecting CES.

It used to be a good way to announce new products that would then launch later in the year, but in today’s more-competitive industry and media environment, products need to go on sale as soon as they’re announced, to capitalize on buzz, he believes.