Recession-Proof Events Only This Year?

Now that we are getting ready to dive into tons of news and reports from the floors at Macworld in San Francisco and Consumer Electronics Show (CES) in Las Vegas, one is very likely to bump into a number of blog posts and articles complaining about the obvious downsizing of the two favorite tech shows that traditionally open the year for many technology professionals. And while the downscaling is obvious, I guess there is nothing particularly wrong about it - the entire industry is coming to its senses after a long period of exuberance and it should only be admired, I think.

So yes, we will see the events that will be somewhat smaller than we have come to expect from the two major players opening up the year in early January. The examples are here: CES expects to entertain 130k visitors after last year’s 141k and they will be able to see gadgets and technologies showcased by 2,700 exhibitors (which is a pretty drastic 10% decrease versus last year’s 3,000). But even these figures are still pretty huge and it will only save some shoes of the people walking the floor so maybe this downscaling is reasonable both from financial and humanitarian points of view.

Many companies have already scaled down or cancelled their trade show investments (like we will not see Adobe or Belkin at Macworld and no Cisco and Sanyo at CES). At CES some companies cancel their show floor booths and go for meeting rooms instead (in the convention center or simply in the nearby hotels) as in the meeting rooms they can actually make deals while on the show floor they can do nothing but entertain the public - and it is not destined to translate into sales actually. Another thing where one is supposed to notice the difference is in invites to various parties at CES: as they are mostly sponsored by one or more companies, reduced budgets have also reduced the number of such parties as well.

Also an important thing about both shows is absence of two key figures: there will be no Steve Jobs at Macworld (and no Apple at Macworld from next year at all) and no Bill Gates at CES which is already a huge difference and something that the public just expects to see so many will be disappointed.

But of course the major difference is in how companies will actually behave: contrary to just entertaining consumers and hinting at the technologies consumers will be able to enjoy at some later point of time, now the focus is obviously on offering products people will actually want to use and buy. These are the products that are both useful and offer some real value to consumers as well as allow us to save money on something - at the very least on energy consumption so greener devices will most certainly be welcomed.

Of course it is pretty difficult to imagine CES without some totally unexpected gadgets looking like borrowed from science fiction novels and I am sure they will still be demonstrated quite a lot for a simple reason: manufacturing a gadget from the idea to introducing it to the market takes time - and this time is definitely longer than a few months that we have officially been in recession. But I have a feeling that no one in their right mind will begin investing in R&D for some revolutionary unseen device right now in the middle (or beginning) of the recession so much less devices will be introduced to the market in the near future.

But it is quite understandable that every company that wants to stay strong in the market during the hard times will need to offer real value - and for very reasonable price as well. Hence it is no wonder that everyone is talking about how big the netbooks market will be this year and how many netbooks we will see at trade shows this year.

No one expects Apple t introduce a netbook of its own - even despite all the competitors working in the laptops market already doing so - or at least not at this Macworld expo. But Apple is known for its reliance on the cult of Apple where users are not supposed to make their purchases based on the price and are not even supposed to care about the price all that much - Apple is to be worshipped without actually thinking about money. But I would not think of Apple as totally immune to recession and the company will need to begin figuring out some way to stay healthy - and introduce a netbook at some later point in time.

But I have a feeling that recession will show even in what Apple demonstrates at Macworld: I tend to agree with analysts predicting refreshment to Mac Mini - the most affordable of Apple computers - and no news for Macbook Pro simply because the market for these expensive laptops is not big enough to justify retooling and major modifications in production process. Netbook or no netbook, Apple still must need to introduce some recession-proof products as well.

So yes, we are obviously witnessing big changes in the way trade shows are held - companies are cutting budgets so it is no wonder they are hesitant to throw money on tradeshows that don’t pay off. But is it all actually bad? In fact, I still tend to think that the recession we are currently undergoing will eventually teach many companies a number of important lessons, the biggest one being the necessity of spending money wisely instead of spending as much as you can and want without thinking of ROI. In fact, participation in a trade show is an investment and should be considered as such by any company - hence there should be certain returns. And what’s the point in spending money only to demonstrate your company is in good shape and help event organizers make some money for themselves? No, participation in a trade show is no obligation and the companies should only do it if it meets their overall strategies and expenses.

And same as the recession is teaching many companies in many industries to cut costs and survive on leaner budgets, it will also demonstrate us that the shiny and huge tradeshows with colorful large booths are not exactly necessary to do business. So my conclusion is pretty simple: at tough times trade shows are less about shows and grow into something more about actual trade. After all, if you don’t make money off certain investments, chances are these are terribly wrong investments that you absolutely can not afford at hard times like this.

CES photo - Intel CES 2008 on Flickr, Steve Jobs and Bill Gates photo - whatcounts on Flickr.