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The greatest show on Earth?

While most people are still sleeping off the effects of their New Year's Eve debauchery, more than 130,000 industry gearheads and 2,500 hopeful exhibitors will flock to Sin City for the annual Consumer Electronics Show.
Attendees look up at plasma televisions during Consumer Electronics Show in Las Vegas
Attendees look up at a display of plasma TVs at the 2005 Consumer Electronics Show in Las Vegas. This year's show is expected to be even bigger, with more than 1.6 million square feat of space.Mike Blake / Reuters file
/ Source: Forbes

While most people are still sleeping off the effects of their New Year's Eve debauchery, more than 130,000 industry gearheads and 2,500 hopeful exhibitors will flock to Sin City for the annual Consumer Electronics Show. CES is a buzz-filled mecca, where the latest and greatest electronic wares are hyped by small startups and global conglomerates alike.

With more than 1.6 million square feet of space crammed with wires, chips, plastic, booth babes and various attention-grabbing gimmicks, the show is a true circus. No, not Circus Circus, but still the biggest show in town. In fact, the show floor has expanded this year to encompass not only the entire Las Vegas Convention Center but also the Las Vegas Sand's Sands Expo near the Venetian.

It's often difficult to separate the actual innovative products and industry-moving announcements that come out of Vegas in January, from the grandiose claims and puffed-up displays. That's why a healthy dose of skepticism among show veterans goes a long way.

"For every ten booths I walk up to, I take away one cool nugget. There's a lot of walking, so bring your most comfortable shoes," says IDC analyst Danielle Levitas, bracing for her sixth trip to CES. "But just because I see these products at the show doesn't mean they're going to fly off store shelves in 12 months — or even 24 months."

Even though many products are on display, most are a long way from the shelves of Best Buy or Circuit City. Still, investors are taking a renewed interest in the show, says Levitas. Back in 2000, investor interest was high, but it has dropped steadily since the tech bubble burst.

"Everyone realized it was these consumers who spent us out of that recession," she says. "Investment interest now is not with expectations to find the next big company, like Google, but to find a company where enough money could create a healthy acquisition target."

A few brass rings we expect to find caught our eye when we took an early peek under the big top. The following are our expectations and predictions for what may or may not be the greatest show on earth.

Chips and software
Microsoft promised developers a complete, full-featured preview version of the highly anticipated new Windows operating system, dubbed Vista, by early January. That sounds like CES to us; the show would be the perfect stage on which to unveil and demonstrate the software.

Other major changes to the inside of your computer could come in the form of Intel's vague new consumer electronic brand, Viiv. "A lot of people don't get what Viiv really does," says Levitas. "If you want to be cynical, it is simply the next-generation platform and chipset that will go into high-end PC media centers." But to consumers, Viiv should translate into a better gaming processor and a more flexible computer when it comes to using a PC as a DVR to record and edit video.

Intel would prefer you see Viiv as the latter. Expect CES to be the place where the world's largest chipmaker tries to make its Viiv strategy more clear.

Intel-rival Advanced Micro Devices will also have a significant presence at CES. The smaller chipmaker will likely shed more light on its own nascent consumer brand, the details of which have been relatively thin thus far. Look for AMD to try and differentiate its strategy here.

Cell phones
Expect the words "smart phone," "high-speed" and "VoIP" (voice-over-Internet Protocol) to dominate cell phone conversations at CES.

Look out for three supersmart BlackBerry-killers — one each from Palm, Nokia and Motorola — to make a strong showing.

Somewhere on the showroom floor, a cell phone manufacturer will put forward the very first W-CDMA phone for American customers. But it's unclear who that manufacturer will be. W-CDMA is the next-generation standard for transmitting voice and data at high speeds--anywhere from 400 to 1,100 kilobits per second. That means no more jerky 15-frame-per-second video clip downloads, and perhaps one carrier will offer live video calls on cell phones. Likely contenders include Nokia and Samsung, who could both put these high-speed handsets on carriers in the U.S. by the middle of 2006.

Also, we're pretty sure we'll see a VoIP-cell hybrid phone — one that lets chatterboxes move easily from a home or hotspot Wi-Fi network to a carrier's cellular network during one conversation. And we're keeping our eyes peeled for an elusive AT&T SBC-Yahoo! cell phone, which just might be on display.

Sony must be feeling pressure to deliver the goods with its next-generation gaming console, the PS3. Microsoft's Xbox 360 impressed many gamers last month with its superb graphics engine, and the desirability factor of the distant PS3 could be waning.

Sony CEO Sir Howard Stringer will surely discuss the PS3 in his opening keynote speech, but will we get a launch date? "If Sony gets any more specific than saying 'late spring' or 'midyear,' I'll be shocked," says Levitas.

High definition
With larger-than-life LCD and plasma displays towering from nearly every electronics vendor's booth, CES would seem an appropriate venue to explain to consumers just what format they'll be watching.

Many people go to Vegas to see the Blue Man Group, but we're looking for a little action from the Blu-Ray Group, the industry association responsible for the DVD format backed by Sony. The group said it would detail launch plans for the format at CES, and that it is sticking to a Spring 2006 timeline. But the natives are getting restless.

"We've heard it all before," says Yankee Group analyst Nitin Gupta. "We've heard so much rhetoric that this race is now anticlimactic. At this point, just show me the DVD player already."