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%).

Even more ominous was Shapiro's tepid description of a likely "return to positive growth" in 2010. (Something tells me he's not expecting 20%).

As CES continued throughout the weekend, this same tug-of-war continued between demonstrations of new "hey-look-at-that!" products and the nagging concern that everything there will collect more dust on store shelves than it had on the past.

Let's exclude

Palm

(PALM)

from this scenario, however. The struggling smartphone maker essentially resurrected itself overnight, with an unveiling of its upcoming Pre device, sending its shares to four-month highs. Whether the Pre becomes a serious rival to

Apple's

(AAPL) - Get Report

iPhone remains to be seen, but for now, Palm has once again become

part of the conversation

.

Palm aside, the economic pronouncements heard last week from -- and outside -- the show were difficult to ignore:

Panasonic

(PC)

said it may not meet its goal of double-digit international sales growth for its March 2009 fiscal year and suggested fiscal 2010 would be a "tough business environment.

Best Buy

(BBY) - Get Report

disclosed that December same-store sales dropped 6.5%.

As reported by

Barron's

writer Eric Savitz,

Cisco

(CSCO) - Get Report

CEO John Chambers asks a CES crowd, "How many people believe GDP growth will turn positive in the next two quarters? One person raises her hand. How many believe it'll go up in the second half of the year? Most hands go up in the room. How many believe so next year? All hands are up. 'That's pretty much what my customers tell me,' says Chambers."

Seagate

(STX) - Get Report

CEO Bill Watkins tells Savitz that demand for the company's disk drives was "just terrible" in December. Apparently so -- on Monday, the company announced Watkins was being

replaced

as CEO.

This general malaise beneath the Vegas glitz wasn't lost on Wall Street analysts, who had little good to say on Monday. Wedbush Morgan cut its revenue estimates on both

Garmin

TICKER TYPE="EQUITY" SYMBOL="GRMN" EXCHANGE="NYSE" PRIMARY="NO"/> and

Nvidia

(NVDA) - Get Report

, saying industry contacts at CES made recent demand dropoffs quite clear.

Similarly, Friedman Billings suggested semiconductor firms are projecting a first quarter that is "quite weak," while inventories ballooned in the fourth quarter from a sharp fall in demand.

The

Nasdaq

was recently off 1.6% to 1545; the index is now off 4.4% from Thursday's close.

The good news, for longer-term investors, is that coming to grips with reality by scaling profit expectations is a necessary part of finding a bottom to the demand cycle.

However, as companies at CES were chagrined to disclose, there is no evidence to support the idea that such a bottom will occur this quarter.