As the industry gears up for the endurance test better known as CES (Consumer Electronics Show), the lineup of companies attending is a testament not just to how CES has trumped Comdex as the must-attend tech tradeshow, but also how consumer electronics have become such a dominant, ubiquitous part of everyday life.
Amazon.com, which celebrated a record-breaking holiday season, reported that the three most popular consumer electronics were various versions of Apple Computer's iPod. And while Apple has one of the strongest tech brands around, the company forgoes tradeshows such as CES. But Apple is the exception, as every other major brand will be there -- Microsoft, Intel, Yahoo, Google, Verizon, and Kodak are among the heavy-hitters.
But all eyes will be on two companies in particular -- Sony Electronics and Dell.
When new Sony CEO and Chairman Sir Howard Stringer gives the opening keynote address, no doubt many will be wondering how the company that once defined consumer electronics and stood for innovation will get its act together after a rough 2005. The company's efforts in the digital music and MP3 player markets seemed like an afterthought after sitting out so long. And slapping its once industry-leading "Walkman" brand onto its own player didn't strike too many as innovative. Such moves might explain why Samsung surpassed Sony for the first time in Interbrand's list of top global brands.
As for Dell, its brand was supposed to be synonymous with customer service and low-cost. But blogger Jeff Jarvis recounted his horrific experiences with Dell's customer service, a story many Google-ing media picked up on. And in its third quarter, Dell grew only as much as the rest of the PC industry. For the past seven years, Dell had outpaced industry growth. But as PCs become more and more of a commodity, low-cost and customer service don't add up to as strong of a brand these days.
No one is expecting the reinvention of the wheel from either of these companies at CES. But the media harping over these bruised brands isn't a case of schadenfreude. It's that these industry-leading companies aren't living up to their brand promise -- Sony is not seen as the innovative leader it once was, and Dell is facing competition on the low-cost front, and taking hits for its customer service.Of these companies, Sony surprisingly has the easier task ahead of it. Despite garnering more bad press than Dell, Sony's brand of innovation and leadership does not need to be reinvented; the company just needs to find its footing again, and be at the forefront of the next consumer technology innovation, as Apple was with the iPod.
Dell has the tougher task. With companies selling desktops for under $300, and laptops for as little at $400, Dell's main differentiators are becoming more commonplace. In an increasingly crowded and competitive market where consumers are much savvier than they were just a few years ago, Dell will need to do more than promise more of the same.
And maybe Dell recognizes this. In September, Dell unveiled a line of high-end computers, displays, and televisions. But there are plenty of such high-end products on the market, and "me too" is not a brand.
In 2005, CNET/News.com executive editor Charles Cooper wrote "sometimes, companies get a clue, and sometimes, they remain clueless," pointing to the latter to describe Dell's response to Jarvis' blog. Whether Dell and Sony are clueless to the market forces around them remains to be seen; CES will provide