Look for Funai, not Philips, at CES 2009

Philips will not be exhibiting at the 2009 Consumer Electronics Show. The Philips brand, however, will still be on display at the Las Vegas Convention Center, thanks to the expanded presence of Funai--the Japanese company that will be producing TVs sold in North America under the Philips name starting later this year.

A Philips representative confirmed to CNET that the Dutch electronics giant will not have a presence on the show floor at the mammoth Las Vegas trade show, verifying rumors that had surfaced earlier this year.

Traditionally, the Consumer Electronics Association's massive January event is used by industry stalwarts to highlight emerging trends and key products that will be introduced over the course of the subsequent year and beyond. Philips' exit from that high-profile showcase comes in the wake of its recent announcement that it's outsourcing TV production to Funai for Philips- and Magnavox-branded sets sold in the North American market.

Indeed, Funai is doing its part to fill the void left by Philips' exit from the show. A spokesman for the Consumer Electronics Association, the industry group that runs CES, had this to say:

Philips has been a pioneer in the consumer technology industry, and a well-known brand for consumers in the U.S. and around the world. The recent license agreement between Philips and Funai was a strategic business decision between two consumer technology companies. CEA respects the strategic decisions that all of our 2,700 exhibitors make regarding their business model and the International CES. We look forward to welcoming the Philips brand back to the 2009 CES in a new way, through its partnership with Funai, which has significantly increased exhibit space for the 2009 show to approximately 10,000 net square feet.

Keep in mind that 10,000 square feet may sound like a lot, but it's small potatoes compared with the megabooths that house major manufacturers like Sony, Samsung, Panasonic, and--up through last year--Philips.

While not having to pay for all that space on the show floor will undoubtedly save Philips considerable expense, it will also mean forfeiting the publicity and intangible buzz that comes from being at the center of the industry's biggest annual event. Just last year, for instance, the company snagged the Best of CES award for its energy-efficient Eco TV (though its admittedly impressive low power consumption couldn't overshadow the middling picture quality evident when we reviewed the final product).

The company could still use the show as a springboard for new product announcements, however: it's all but certain Philips will still have some personnel on hand at CES for meetings with journalists, analysts, retailers, and other industry insiders. And plenty of CES no-shows still crank out the press releases during that week--with the seemingly endless list of gadget blogs and tech sites covering the show, all a company really needs is a product photo and a descriptive blurb to get some virtual ink.

To be sure, skipping CES doesn't necessarily confine a company to also-ran status. Nintendo and Apple, two of the hottest names in the industry, have long since spurned the Vegas show. Likewise, Onkyo and Yamaha have opted out in recent years. Furthermore, Philips is quick to point out that the company is still producing, selling, and marketing all of its own non-TV products for North America. And it will continue to produce TVs for other global territories--most notably Europe--where its brand remains stronger.

Still, when one considers that Funai already produces electronics that are sold under the labels Sylvania and Emerson, you have to wonder: is Philips on the road to joining those once hoary companies as a ghost brand--a holding company that just licenses its Western name to give better brand cachet on store shelves to an anonymous Asian manufacturer? Maybe, maybe not. But skipping the world's biggest consumer electronics show doesn't exactly inspire confidence.

What do you think: Is the Philips brand in decline? Does Philips' no-show mean CES is losing some of its luster as the consumer electronics industry's ultimate sneak preview? Or is this just more "inside baseball" industry gossip that will have little impact on the future of consumer electronics? Share your thoughts below.