MELISSA BLOCK, host:
This week, the biggest TVs will meet the smallest phones in Las Vegas. They'll compete for attention with the coolest game consoles at the biggest gathering of consumer electronic buyers and sellers. It's the annual Consumer Electronics Show, or CES. NPR's Laura Sydell reports that the recession is the number one worry, but the consumer electronics industry is in better shape than many others.
LAURA SYDELL: If there is a recession on, you wouldn't know it by standing here at this Best Buy in San Francisco.
Mr. BRYAN DOBBIE(ph) (Customer Experience Manager, Best Buy, San Francisco): My name is Bryan Dobbie. I'm a customer experience manager for Best Buy in San Francisco on Harrison Street. I've seen a lot of gaming systems going out, so people are looking a lot for the Wiis. I've seen a lot of PlayStation3s go out. I've seen a lot of laptop sales and a lot of television sales.
SYDELL: It isn't that customers here aren't feeling the pinch of the recession. Take this guy, Tyler Bradford. Although he just downsized to a smaller apartment to save money, he's about to take out his credit card.
Mr. TYLER BRADFORD: So now I'm justifying myself, so I can get nicer things, a flatter TV, if I go to a smaller apartment, right?
SYDELL: Maybe during a recession, a good TV is a good thing to have?
Mr. BRADFORD: Well, you know, that way I'll spend more time at home and not on other things.
SYDELL: There is a marketing term for what Bradford is doing. He's nesting. Stephen Baker, analyst with NPD Group, says when the economy is bad, people nest.
Mr. STEPHEN BAKER (Analyst, NPD Group): We saw this after 9/11 in 2001, as well, where people took that money that maybe they would have spent on things outside the home, and reallocated it towards products that gave them some kind of an enjoyment or entertainment in their own home.
SYDELL: Still, for an industry that's used to double-digit growth, this isn't going to be a great year. Steve Smith of This Week in Consumer Electronics says they are still counting up the holiday sales, but he expects that compared to last year, the numbers will be flat or down around 3 or 4 percent. But Smith consoles himself.
Mr. STEVE SMITH (Editor In Chief, This Week in Consumer Electronics): It has done better than the car business. It's done better than men's and women's clothing.
SYDELL: As Smith sees it in this environment, not having double-digit losses is something to be happy about. He also expects that post-holiday, there will still be plenty of people in stores buying televisions because of the national conversion to digital TV in February. Now, as companies get ready to go to the Consumer Electronics Show, the current economy is certainly having an impact on how they plan to pitch their products.
(Soundbite of Ooma ad)
Unidentified Man: Hello. I'm interested in getting free home phone service.
Automated Voice: It sounds like you said, fee for home service.
SYDELL: This is an ad for a device called Ooma.
(Soundbite of Ooma ad)
Unidentified Woman: The big phone companies can't even say free home phone service. But you can with Ooma.
SYDELL: An Ooma is a white plastic box that connects a regular home phone to a broadband Internet connection. It costs $250 upfront. Then you can get rid of your home phone line and the monthly bill. Tami Bhaumik, the marketing director for Ooma, says in this economy, that's their big pitch.
Ms. TAMI BHAUMIK (Marketing Director, Ooma): We do talk a little bit more about how much people are saving on a monthly basis. So, I mean, we are playing that up from a sales standpoint more.
SYDELL: Ooma is a 1-year-old start-up, but Bhaumik says as the economy gets worse, their sales are going up. This is their first year at the Consumer Electronics Show. Despite her company's growth, she says they aren't going to make their display too lavish.
Ms. BHAUMIK: Every item that I choose to select to be either in my booth or part of my booth, I think long and hard about whether or not the cost makes sense.
SYDELL: Other companies are doing the same. CES has always been as much about selling gadgets as it has been about partying with colleagues and competitors. This year, the parties will be smaller. It's an industry that's nervous about its future and in a little bit of shock because a decade of double-digit growth has come to an end. Laura Sydell, NPR News.