The greatest show on Earth?

By Rachel Rosmarin

updated 9:17 a.m. ET Jan. 4, 2006

BURLINGAME, Calif. - While most people are still sleeping off the effects of their New Year's Eve debauchery, more than 130,000 industry gearheads and 2,500 hopeful exhibitors will flock to Sin City for the annual Consumer Electronics Show. CES is a buzz-filled mecca, where the latest and greatest electronic wares are hyped by small startups and global conglomerates alike.

With more than 1.6 million square feet of space crammed with wires, chips, plastic, booth babes and various attention-grabbing gimmicks, the show is a true circus. No, not Circus Circus, but still the biggest show in town. In fact, the show floor has expanded this year to encompass not only the entire Las Vegas Convention Center but also the Las Vegas Sand's Sands Expo near the Venetian.

It's often difficult to separate the actual innovative products and industry-moving announcements that come out of Vegas in January, from the grandiose claims and puffed-up displays. That's why a healthy dose of skepticism among show veterans goes a long way.

"For every ten booths I walk up to, I take away one cool nugget. There's a lot of walking, so bring your most comfortable shoes," says IDC analyst Danielle Levitas, bracing for her sixth trip to CES. "But just because I see these products at the show doesn't mean they're going to fly off store shelves in 12 months — or even 24 months."

Even though many products are on display, most are a long way from the shelves of Best Buy or Circuit City. Still, investors are taking a renewed interest in the show, says Levitas. Back in 2000, investor interest was high, but it has dropped steadily since the tech bubble burst.

"Everyone realized it was these consumers who spent us out of that recession," she says. "Investment interest now is not with expectations to find the next big company, like Google, but to find a company where enough money could create a healthy acquisition target."

A few brass rings we expect to find caught our eye when we took an early peek under the big top. The following are our expectations and predictions for what may or may not be the greatest show on earth.

Chips and software
Microsoft promised developers a complete, full-featured preview version of the highly anticipated new Windows operating system, dubbed Vista, by early January. That sounds like CES to us; the show would be the perfect stage on which to unveil and demonstrate the software.

Other major changes to the inside of your computer could come in the form of Intel's vague new consumer electronic brand, Viiv. "A lot of people don't get what Viiv really does," says Levitas. "If you want to be cynical, it is simply the next-generation platform and chipset that will go into high-end PC media centers." But to consumers, Viiv should translate into a better gaming processor and a more flexible computer when it comes to using a PC as a DVR to record and edit video.

Intel would prefer you see Viiv as the latter. Expect CES to be the place where the world's largest chipmaker tries to make its Viiv strategy more clear.

Intel-rival Advanced Micro Devices will also have a significant presence at CES. The smaller chipmaker will likely shed more light on its own nascent consumer brand, the details of which have been relatively thin thus far. Look for AMD to try and differentiate its strategy here.

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