Comdex: Fewer Visitors, More Security

This was supposed to be Cindy Low's first visit to Comdex. But a

combination of factors, including the economic slowdown and increased

security fears, helped convince the Singapore-based marketing manager

for network equipment vendor Linksys Group Inc. to cancel her trip.

Officially known as Comdex Fall, the annual show is held each November

in Las Vegas and is billed by organizers as one of the world's largest -

- and most important -- exhibitions of IT hardware and software. But a

dramatic downturn in the fortunes of the IT industry over the past year

and the aftershocks of the Sept. 11 attacks on the World Trade Center

and the Pentagon are expected to cause a steep drop in the number of

visitors to this year's show.

Due to the downturn in IT, show organizers are looking at a 25 percent

drop in attendance this year, according to Amy Groden, a spokeswoman

for Key3Media Events Inc., in an e-mail response to written questions.

With 150,000 visitors expected by Key3Media to attend the show this

year, that amounts to 50,000 fewer attendees than last year.

Linksys' Low is just one example of the many thousands of attendees

that event organizer Key3Media expects to cancel their Comdex plans

this year. Low's decision to cancel a planned trip to Comdex was made

as a result of budget cuts and security fears that caused many of the

Asian journalists she had hoped to meet with to scrap plans to visit

the show. "A lot of them are reconsidering or haven't decided yet if

they are going," Low said.

Linksys expects to see slightly fewer Asian customers attend Comdex

this year, although some of its regional customers are going, Low

said. "A lot of them are still keen to see the latest products," she

said.

Historically, a visit to Comdex has been a must for many vendors, end

users and journalists. But with the industry facing a global recession,

exhibitors are worried about attendance levels this year. "The size of

the show will be the same (as last year), but we are unsure what the

attendance will be like," said Donya Ekstrand, a spokeswoman for

Ericsson Business Innovation AB.

Hard economic times aren't just keeping users and media away from the

show. Weighed down by lackluster financial results, some vendors, such

as Koninklijke Philips Electronics NV's Philips Components division and

NEC Corp., have been forced to reduce their presence at Comdex. "We

have scaled back our presence because of our reduced financial

performance," said Jeremy Cohen, a Philips Components spokesman.

When companies adjust plans because of budget concerns, typically they

scale back their programs, as opposed to dropping out completely,

according to Groden. Key3Media couldn't provide a specific figure for

the number of companies that had cancelled or scaled back their plans

to attend Comdex, saying the exact number is too difficult to track.

However, both domestic (U.S.) and international exhibitors are scaling

back marketing activities due to the economy and, in some cases,

because some of these companies have gone out of business, Groden said,

estimating that this year's show will attract more than 2,000

exhibitors.

Despite the harsh economic environment and lingering security fears,

many companies are planning on business as usual at Comdex.

All eight of the keynote speakers -- Bill Gates, chairman and chief

software architect at Microsoft Corp.; John Chambers, Cisco Systems

Inc.'s president and chief executive officer (CEO); Kunitake Ando,

president and chief operating officer (COO) at Sony Corp.; Jorma

Ollila, Nokia Corp.'s chairman and CEO; Larry Ellison, chairman and CEO

of Oracle Corp.; Dick Brown, chairman and CEO of Electronic Data

Systems Corp. (EDS); Jeff Hawkins, founder, chairman and chief product

officer of Handspring Inc.; and Don Listwin, president and CEO of

Openwave Systems Inc. -- scheduled for Comdex have re-confirmed their

attendance since the Sept. 11 attacks, according to a Key3Media

statement.

Major exhibitors have also re-confirmed their Comdex plans in the

aftermath of the attacks, including Nortel Networks Corp, CMC Magnetics

Corp., Olympus America Inc. and AT&T Corp., the statement said.

For some exhibitors, increased security fears sparked by Sept. 11 have

helped open new markets. Web conference software maker SpartaCom Inc.

plans to expand its Comdex presence this year, hoping to capitalize on

an expected increase in demand for its products in light of a drop in

corporate air travel after Sept. 11. "Not only are we going to be at

Comdex next month, our presence will be significantly bigger this year

compared to last year," said Scott Moule, chief operating officer for

SpartaCom.

But employees of Tucson, Arizona-based SpartaCom that will be attending

Comdex may not be flying to the Las Vegas event. "Comdex is very close

to us, we can drive there," Moule said. "We are very concerned (about

the possibility of further terrorist attacks after Sept. 11) and like

everyone else, we have to be aware of the situation, but we also have

to maintain a strong presence in the market."

For visitors and exhibitors that do make the trip to Las Vegas this

year, they can expect to see increased security as a result of the

Sept. 11 attacks. Key3Media is taking extra security precautions for

Comdex-related events, working with event venues and local authorities

to make sure that appropriate security measures are taken for the

event, Groden said. The company has also enlisted the services of a

private security firm to help organize security measures.

Comdex organizers have responded to travel-related fears by exploring

the possibility of offering buses to ferry attendees who are worried

about flying to Comdex, said Rick Moore, head of communications for

Key3Media. The company has buses lined up to transport attendees from

cities like San Diego; Irvine, California; San Jose, California; San

Francisco; and Phoenix, Arizona, but "we haven't gotten a ton of

interest so far," Moore said.

Indeed some companies, like Sony, which plans to send up to 200 of its

staff from Japan to Comdex, have not allowed security fears to deter

executives from traveling to Comdex via air. "Plans have not been

finalized but at present Sony has made no real considerations regarding

the (security) situation in the U.S. Obviously, if something happens

between now and Comdex it might have a major effect," according to

Merran Wrigley, a Sony spokeswoman.

(Martyn Williams in Tokyo, Joris Evers in Amsterdam, Elizabeth Heichler

in Boston, Laura Rohde in London, and Douglas F. Gray in San Francisco

contributed to this report.)

For more information on Comdex Fall, visit

http://www.key3media.com/comdex/.

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