Tech Firms Confront the Ugly Truth

SAN FRANCISCO -- What if they threw a consumer electronics show, and nobody came away feeling that bullish about consumer electronics?

It was an unfortunate bit of timing that last week's Consumer Electronics Show in Las Vegas -- the event for showcasing all the funky gadgets to come in the year ahead -- coincided with a pullback in the stock market and the pesky news on Friday that the U.S. shed another 524,000 jobs in December, bringing the total job losses to 2.6 million in 2008.

But for investors, this year's CES may have been invaluable. Rather than tout their wares in an economic vacuum, company presenters were forced to confront what is usually one of the least-asked questions at the confab: Is anybody going to buy this stuff?

The show's tone was set early when Consumer Electronics Association CEO Gary Shapiro, revving the troops with his "state of the industry" address, conceded that the industry would not grow in 2009 (in fact, sales are projected to slip 0.6%). ...