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Fall Comdex: The ultimate product crapshoot

Hot, new gizmos will abound, but CNET's Michael Kanellos takes a contrarian view of the computer industry's risky penchant for debuting products at this annual tech confab.

This year at Comdex, Microsoft and a host of PC and chip manufacturers will unveil their plans to popularize the Web Tablet, a wireless computer--similar in size and shape to an Etch-a-Sketch--that proponents say will change the face of home technology.

All I can say is, good luck.

Despite the convention's reputation for serving as a launch pad for the next big thing, history shows that the success rate of products heavily touted at the show is incredibly grim. Failure, in fact, is one of the three timeless constants at the show. The other two are: 1) a speech from Larry Ellison or Scott McNealy on the impending death of Microsoft and 2) decorative lettuce everywhere.

Last year, for instance, Gateway, Compaq Computer and Intel promoted the coming convergence of consumer electronics and computing. Since then, both Gateway and Intel have killed their consumer products divisions, and not a lot of disgruntled teens can be seen listening to speed metal on the Compaq iPaq Personal Audio Player PA-2.

The year before, in 1999, Bill Gates unveiled the MSN Web Companion, a simplified Internet terminal that would have sold for $200 if anyone had bothered to buy one. Corel also talked up a desktop suite based on Linux.

At the 1998 show, the Stylish PC era--all 27 minutes of it--was the rage. One of the largest booths on the floor that year belonged to National Semiconductor's Cyrix division, which made low-cost microprocessors. The company spent approximately $1 million on its booth, which featured an actor (who once played Bert in Sesame Street Live) to regale the crowd as Chip. Seven months later, National sold the division to Via Technologies.

In 1997, analysts and hardware executives were a-twitter about a new, slim handheld. It was the Rex, a credit card-size organizer that was headed toward oblivion a year and a half later.

Even keynote speakers seem to labor under the curse. Last year, Hewlett-Packard CEO Carly Fiorina delivered a keynote speech on the same day HP called off its acquisition of PricewaterhouseCoopers and announced a massive earnings shortfall.

In 1997, Compaq CEO Eckhard Pfeiffer outlined his vision of Compaq's dominance in the computer world. Two months later, he bought Digital Equipment, a merger that, in part, prompted his dismissal a little more than a year later. In 1996, Jim Barksdale unveiled Communicator, a Web-based desktop from Netscape Communications that would challenge Microsoft Office.

The miserable record partly stems from the bristling anti-authoritarian streak among many technology buyers. A number of consumers, especially early adopters, recoil against advertising campaigns or the whiff corporate manipulation. If Microsoft invented plumbing, legions of hackers would smugly discuss the benefits of washing in a stream. As a result, glitzy product directives driven from on high must first overcome a heavy dose of skepticism.

Second, some of these products seemed to suffer from top-down Soviet-style planning. The Internet Companion was supposed to bring the Web to the masses through an inexpensive, simplified countertop terminal. Unfortunately, by 1998, the masses were already on the Internet, and they were getting on it through PCs getting cheaper by the day.

The intelligent set-top box (Comdex 1997-1999, inclusive) failed for similar reasons. In theory, being able to download files or read e-mail on the family TV set would make e-mail communication as pervasive as telephone calls. And if other members of the family hadn't been using the television to watch reruns of "Magilla Gorilla," it would have worked.

But perhaps the most important factor of all is this: Getting someone to buy your product is never easy. Sales remain the black art of the high-technology industry. Derided as dopes by developers and annoyances by potential clients, sales representatives travel the world like the plague with projectors. One day, it's a Marriott in New Orleans, the next a Hyatt in Lubbock, Texas. It's sort of like a folk song with commission checks. Yet, look at the nature of the job. When was the last time you had to ask strangers for money?

The unsung heroics of the sales rep struck me the first time I attended Comdex with my wife, who's in sales. How was your day, she asked. Great. Vice presidents from Dell, AMD and HP divulged their next-year strategies to me, and Intel CEO Craig Barrett hosted a bunch of us writers for dinner. How was yours, I asked. Great. Out of nearly 500 attempts, close to 75 deigned to take a business card and 16 seemed vaguely interested. The line for bottled water wasn't too long either.

In the end, convincing the public that they want a tablet will likely prove to be the key factor. Tablets have flopped before. At nearly every technology convention in the past five years, NEC or some other conglomerate has dusted off a version of a Web tablet and trotted it around a demo booth, but to little avail.

The problem? Price. The high price of components pushed these things into the $700 to $800 range. The bill of materials, though, is now approaching close to $300, said Mark Allen, former Transmeta CEO, which could grease the skids for adoption toward the end.

Will the undeniable coolness factor win over skeptics, or will the tablet join the other has-beens? By next year, you will know.