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Tech industry puts on positive face for expo

Everything about this year's Comdex Fall exhibition, the tech industry's mammoth trade show, is a bit thinner than in years past.

Despite bargain hotel rates, the crowd for this week's event is expected to be 25 percent smaller than it was in 2000. About 150,000 to 160,000 attendees and some 2,000 exhibitors will be in Las Vegas looking for signs of a rally in the moribund tech economy, but most suspect they won't find many.

That is because they see little evidence that corporations and consumers are ready to start buying again.

Instead, many technology industry executives say they expect only slow growth over the next year, delaying any big rebound to at least 2003.

"The job market isn't very strong. People are delaying purchases," said Joe Hartnett, chief executive of U.S. Robotics Corp., a leading maker of modems. Companies can't exert much control over their fate "until there's more confidence in the economy."

With corporations putting off equipment purchases and cash-strapped consumers eschewing new gadgets, tech companies are turning to one of the few areas left to make money: selling hardware and software that helps companies improve productivity.

Microsoft Corp. chairman Bill Gates predicted in Sunday's keynote address that Internet-based technology advances will help bring the economy out of recession and double business productivity in the next 10 years.

John Chambers, chief executive of Cisco Systems Inc., went further, saying Monday that "work force optimization" through the Internet will result in $140-million in savings over the next three years or so, an increase of nearly 70 percent from the previous three years.

"This is what the Web's all about," said Chambers, whose company is the biggest supplier of computer routers and other devices that run the Internet. "We're just starting, in terms of implications for countries or companies."

In the real world, Chambers said, Cisco recently cut the costs for teaching technicians about new equipment standards by using Web-based training programs.

"It would have cost me $1.4-million to do it in the traditional way," he said. "Using e-learning, it cost me $16,000 and we had higher pass rates."

Gates, who traditionally opens the convention with predictions for the future, is still a big draw, but not like years past. Speaking to about 125,000 attendees Sunday night, he opened Comdex with a plug for the company's upcoming Tablet PC, a laptop with a keyboard that can be detached or hidden when the device is used for taking handwritten notes.

Enthusiasm was harder to drum up, in part because Gates touted the same device a year ago at Comdex, when he demonstrated a prototype. In March, Microsoft announced five companies had agreed to manufacture it.

The heart of the fall Comdex show has long been corporate computer systems and related products, many of which have taken a beating this year. NPD Intellect, a technology research company, reported that sales of computers, monitors, printers and scanners showed double-digit declines in the first half of 2001 from the same period last year.

Not surprisingly, the computer industry also has weathered huge job losses this year. More than 25,000 jobs evaporated in October alone, according to Challenger, Gray & Christmas, a Chicago company that helps find jobs for laid-off executives.

"There's still a huge question out there about what is going to drive people to buy another PC," said Brian Halla, chairman of National Semiconductor Corp., a Santa Clara, Calif., chipmaker.

Comdex's focus has expanded beyond the corporate computer world to include mobile devices and applications, digital imaging and communications. There's also more attention on consumer gear.

Sony Corp. chief executive Kunitake Ando, one of the keynote speakers at Comdex on Sunday, said, "I think that in the past we did not bring enough Net-ready type of products. But Sony is finally ready to introduce those (audiovisual) products which will be connected to the Internet without the help and the use of the PC."

That includes game consoles, personal digital assistants, digital cameras and camcorders and a portable flat-screen TV, Ando said.

Whether consumers will rush to buy these devices is unclear. Sony is one of several manufacturers that have tried to sell stripped down, easy-to-use gadgets that can link to the Web or a corporate network, only to have them crash and burn in the marketplace.

Halla of National Semiconductor, whose company will again sponsor a pavilion at Comdex dedicated to such gadgets, said that the missing ingredient is high-speed, always-on connections to the Internet.

"As soon as we solve (that) problem," Halla said, "everyone will have a half-dozen information appliances."

_ Information from Cox News Service was used in this report.