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NOVEMBER 21, 2002 COMMENTARY By Stephen H. Wildstrom Maturity May Be Comdex' Demise As the computing industry has grown up, the need for a single trade show has diminished. And that's not so bad
Comdex, has had a long up-and-down ride over its 23-year run. It was born as the Computer Dealers' Exposition at the dawn of the Personal Computer Age, when hardly any computers or dealers even existed. At its peak in 2000, it boasted over 210,000 attendees, more than 2,000 exhibitors, and filled the Las Vegas Convention Center, the Sands Exposition Center, a chunk of the Las Vegas Hilton, and an assortment of tents. This year, attendance and exhibitors were both at around 40% of that year, and the show fit in two of the convention center's three large halls -- with lots of room to spare. Of course, the economic distress that has hit the information-technology industry plays a large role in the speed and depth of the decline. Chances are most of the thousand or so exhibitors that have disappeared from Comdex no longer survive, at least not as indpenedent companies. And for businesses facing tough times, a trade show where even a tiny presence on the outer fringes of the exhibition space costs upwards of $100,000 is easily dispensible. FEWER, BIGGER. However, other factors that will persist long after the IT sector returns to healthy growth also play an important role. Infant industries usually attract huge numbers of new players, particulary if the economic barriers to entry are low, as they are in IT. But some immutable laws of economics dictate that as an industry matures, it becomes dominated by fewer and bigger players. Although much was made during the tech boom about how small, nimble companies would dance around "old economy" dinosaurs, it turns out that things like economies of scale still matter a lot. Consider the PC business, where dozens of competitors once vied for their piece of a growing market. Now the only U.S.-based companies that truly matter, especially in corporate sales, are Dell (DELL ), Hewlett-Packard (HPQ ), and IBM (IBM ) (with Apple [APPL ] occupying an important but small niche). And Dell, with its phenomenal ability to squeeze production and selling costs and to remain profitable while underpricing the competition, seems destined to see its already dominant market share grow even larger. As the industry consolidates, shows such as Comdex become less relevant. Dell, with its direct-sales approach, has no need to impress or entertain the computer resellers and retailers that were Comdex' orginal reason for being and that still attend in large numbers. IBM and Gateway (GTW ) were also among the missing, and only HP, for whom Comdex was something of a coming-out party after its merger is Compaq, made a splash. Toshiba (TOSBF ), No. 4 in U.S. laptop sales, was present in force, but Sony (SNE ) took a pass. MASS VS. FOCUS. Another factor is that a show as broad and diffuse as Comdex may have outlived its usefulness. When the industry was tiny, having everyone involved at any level attend the same show was the only way to gather critical mass. But today, it makes little sense to have displays selling retail computers, enterprise software, programming tools, disk drives, power supplies, computer cases, and plastic injection moldings all sharing a single show floor. Exhibitors have complained for years that Comdex' lack of focus meant that the ratio of qualified leads -- actual potential buyers -- to total visitors was so low that it was very difficult to get any sort of return on investment for a show presence. Although many trade shows are suffering, and some have died, more specialized expositions are holding their own or even thriving. The Consumer Electronics Assn.'s International Consumer Electronics Show, to be held in Las Vegas next January, will attract much larger crowds and will have far more exhibit space than Comdex. The Cellular Telephone & Internet Assn.'s annual spring conference and show, to be held in New Orleans next March, has become an indispensible gathering for the wireless industry. Comdex may be fading, but its place in the history of the tech industry is secure. Should it disappear, the attendees who put up with the indignities such as endless cab rides, bad meals eaten standing up at receptions, jostling crowds, and indifferent hotel rooms at grand luxe prices that marked its heyday may not miss it. But they certainly won't forget it.  Wildstrom is Technology & You columnist for BusinessWeek. Follow his Flash Product Reviews, only on BusinessWeek Online Get BusinessWeek directly on your desktop with our RSS feeds.  Add BusinessWeek news to your Web site with our headline feed. Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video. To subscribe online to BusinessWeek magazine, please click here. Learn more, go to the BusinessWeekOnline home page  | | NOVEMBER |
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