TCS Daily

Gambling on the Future

By Craig Winneker - January 7, 2006 12:00 AM

LAS VEGAS -- This desert town has always been an oasis of dreams -- some good, some bad, but almost all about the same thing: hitting it big. It's a town where glamour meets gauche, where high-rollers mix with hicks and limousines cruise the In-n-Out Burger. Gambling is of course what built Las Vegas and what keeps it humming 24-seven. But the real draw is the idea that anyone can make it here with just a little bit of luck.

Plus, let's face it, it's a hell of a lot of fun. That may never be more true than this week, when 130,000 ultra-wired conventioneers have amassed for the annual Consumer Electronics Show, the nation's biggest annual trade convention. It's often billed as the ultimate display of toys for grownups -- everything from computers to electronic games to robots to the latest mobile technology. The news media tend to feature the gimmicky aspect of the event, sending reporters to play show-and-tell with three or four of the coolest new gadgets. They also highlight the show-business side, the billionaires who Gulfstream in to deliver some corporate bromides about the power of technology and show off their latest PowerPoint presentations (this year's speakers include Bill Gates, Michael Dell, Howard Stringer and Larry Page). And they also portray it, not altogether unfairly, as the world's largest gathering of computer nerds.

Usually there is some kind of overarching issue at the show, some headline fight to fuel debate over Where Technology Is Heading. It would be nice if this discussion focused not on a particular innovation but on how technology might boost growth or improve our lives by doing something other than giving us a surfeit of TV channels. But mostly the show is a forum for powerful competitors trying to out-strut each other with garish displays on the showroom floor. This year's big story is a clash of the titans over which of two rival formats for high-definition DVD players (HD-DVD or Blu-Ray) will emerge dominant and which will become the next Beta. There is also a lot of chatter about satellite radio and enormous amounts of promotional merchandise being distributed in an effort to stimulate it further (Sirius may have Howard Stern but XM has more tote bags). And there are hundreds of enormous television screens purporting to provide the highest-definition picture (to my eye, the Texas Instruments DLP-equipped displays were by far the sharpest at the show).

The big boys are all at the sprawling Las Vegas Convention Center, the main CES site. Microsoft, Yahoo, Samsung, Toshiba, Sony, Panasonic and scads of other major companies have all spent millions on their presence here, even if they don't have anything particularly new to push this year. Their executives emit a lot of techno-babble -- like the promise of one CEO to be the "first mover in the internet backbone space". Drawn by the big names, the cool toys and the sheer spectacle of it all, the crowds come eagerly and in huge numbers. On the first day of the show it was nearly impossible to navigate the convention floor and, distressingly, there was at least a 45-minute queue for a Starbucks coffee.

But there's something more important going on at this show, and I'm not talking about the huge porn industry convention taking place just next door. No, it's something to do with grass-roots level innovation and with the kind of gambling that can pay off big not just for some guy at a craps table but for the economy and for society in general. Exhibitors here large, medium and small are rolling the dice on new technologies. Many of them -- hell, most of them -- will fail. The odds in Vegas always favor the house. But these shoestring techno-entrepreneurs, more so than the behemoths, are what will really drive innovation forward.

To find them, hop a shuttle bus from the Convention Center to the old Sands Expo, behind the opulent Venetian Hotel. If you're not careful you'll wander into the AVN Adult Entertainment Expo, being held in the same building. Yes, this is where Silicon Valley meets Silicone Valley, where buxom women in skimpy spandex weave their way past pot-bellied marketing guys in khakis and corporate-logo polo shirts. (The proximity is fitting, since for a long time porn was the only thing making any money online; cyber-sex was truly the "first mover in the internet backbone space". No doubt the porn convention organizers also hoped to draw some crossover business from among the legions of computer geeks.) No, keep walking and you'll find the annex section of the CES, where some of the smaller players have set up shop and are hawking their wares.

You get the sense that a lot of these small companies have staked everything on attracting attention at this show -- that they've maxed out credit cards to rent a booth. They have amusing names like Aeon and Algolith and Wow Wee and even Zippy Technology Corp. Most are only piggy-backing on someone else's inventiveness, which only reinforces the importance of giving big companies the freedom to create new technologies. Their success doesn't dampen competition; it spurs innovation. Every technological advance from a Microsoft or a Toshiba lets a thousand smaller ones bloom. For every iPod there are a zillion things in which to plug it (more than half the stuff at the show seemed to be iPod-related in some way, resulting in the now tiresome over-use of the "i" prefix). Before Verizon had even unveiled its new VCast music service, which will let subscribers download songs directly into their mobile phones, a company called Qool was offering a miniature stereo docking station for handsets. Cool, indeed.

As Verizon's CEO, Ivan Seidenberg, said in a speech on the show's first day, when a big company invests in a major innovation, the little guys aren't shut out; instead, they have a chance to thrive. I can't say which of the many new and often strange ideas on display at the CES will be the Next Big Thing. (My vote goes to the Sling Box, a nifty little device that lets you watch your home TV stations or DVD or TiVo anywhere you take your laptop.) But I'm glad these players, big and small, are gambling on the future. Said Seidenberg in what should be a mantra for this year's show: "We believe in the power of innovation to create growth."

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