After Microsoft, what next for CES?

Microsoft's departure from CES has got people wondering again about the show's future

Steve Ballmer gave Microsoft's last keynote at the Consumer Electronics Show Monday night, a damp squib that confirmed for some that the software maker has outstayed its welcome on CES's opening night. But whether Microsoft's departure is the beginning of the end for the world's biggest consumer electronics show depends on whom you ask.

There's been much hand-wringing this year about whether CES is on the decline. Skeptics point to the fact that Apple, the new trend setter in consumer electronics, doesn't take part in the event. And the show has produced few game-changing products in recent years.

Microsoft's departure is a big setback, according to Nathan Brookwood, principal analyst at Insight64 and a longtime CES-goer. He expects 2012 to be a high-water mark for the show, and for it to decline in importance from here on.

Even if Microsoft isn't a big innovator, Bill Gates and Ballmer are household names that draw attention to the show each year, Brookwood said. Microsoft's departure may also hit CES in the pocket, he noted, as the company rents a huge space on the show floor.

CES has also become less focused, with TVs and sound systems competing for attention with laptops, smart phones, and now cloud services. And many of the events, including keynotes and big press conferences, are broadcast on the web or covered in real-time through Twitter, blogs and news outlets, giving less people a reason to attend.

"I think the show has lost its identity," Brookwood said. "It's gotten so that no one knows what it's good for any more."

Tim Bajarin, president of Creative Strategies, is more optimistic. People have been predicting the demise of CES for years, he noted. He agreed that CES may have lost some of its edge. "It's become a place where people are trying to catch up with Apple," Bajarin said. But the show's importance has always ebbed and flowed with the technology trends of the day.

While Apple and Microsoft stage their own events to launch products, the big electronics manufacturers need a North American show where they can lay out their wares for buyers, he said. CES is expected to draw 140,000 attendees this year, he noted, and the general public is no longer admitted, meaning a higher proportion of visitors are qualified buyers.

The Consumer Electronics Association, which puts on CES, will have to find a new act to replace Ballmer next year. It's hard to think of an industry figure as well known, with the possible exception of Sony's Howard Stringer, who is expected to retire soon anyway.

In any case, Sony is struggling financially and may be unwilling to pay for the opening keynote spot, which goes to the highest bidder, Bajarin said. He sees a Samsung executive as a likely candidate for next year's opening night.

Microsoft said last month it was pulling out of the show because the timing of CES doesn't fit with its product release schedule.

Varun Arora, founder and CEO of GoToCamera, which offers a service for online video monitoring, was unfazed. "Who cares?" he said on the CES show floor. "There's so much going on here, it's so big, Microsoft's role doesn't mean that much any more."

Its departure was inevitable, said Bajarin. "This is no longer a PC show. Microsoft held out for so long because its software extends to so many other devices. But it was only a matter of time."

Still, its departure is a turning point. Gates gave his first keynote at CES in 1995, and Microsoft has opened the show every year since 2000. Gates handed over to Ballmer in 2009 when he stopped work at the company.

In introducing Ballmer on Monday night, Gary Shapiro, president of the Consumer Electronics Association, said he once compared Microsoft to the U.S.'s founding fathers. "Both were revolutionary changers of human history," he said.

That could be a hard act to follow.

James Niccolai covers data centers and general technology news for IDG News Service. Follow James on Twitter at @jniccolai. James's e-mail address is james_niccolai@idg.com

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