Microsoft Ends a CES Tradition: 2012 Keynote Will Be Its Last

Consumer Electronics ShowFor the past 14 years, Microsoft (MSFT) has kicked off the Consumer Electronics Show, or CES, in Las Vegas. The software giant's keynote address has set the tone for annual exposition where tech companies of all sizes showcase their latest wares.

But Microsoft is announcing that next month's keynote will be its last. The tech bellwether will pull out of CES entirely after that.

The Tech King is Speechless?

Microsoft's explanation is that the timing of its product introductions just doesn't coincide with the popular show's January calendar. Mr. Softy, after all, doesn't refresh its software products on an annual basis. It will rarely have a shiny new toy to unveil, and when it does -- last October's debut of the motion-based Kinect controller for the Xbox, for example -- it sticks to its own release schedule.

However, it's not just a matter of Microsoft's final keynote speech taking place next month. When the 2013 show rolls around the tech titan won't even be hosting a booth in the cavernous conference center.

Something smells funny.

No, I'm Breaking Up With You First!

Reports are starting to surface that this may not have entirely been Microsoft's decision. Show organizers are trying to move in a new direction, some suggest.

Microsoft, quite frankly, isn't the tastemaker it was 14 years ago.

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On the surface, Steve Ballmer's company is inching in the right direction. Microsoft continues to grow year after year. However, it's simply not growing as quickly as many of its peers. Apple (AAPL) now commands a larger market capitalization.

Microsoft also represents the old guard of tech. Even in the world of operating systems, traditionally Microsoft's stronghold, it is Apple's iOS and Google's (GOOG) Android that are the platforms of choice on the smartphones and tablets to which consumers are turning instead of firing up their PCs.

This doesn't mean that Microsoft isn't important. Windows is still the world's most popular operating system. Microsoft Office is the top dog among productivity suites. Even the Xbox 360 has emerged as the leading gaming console, giving Microsoft some welcome street cred with diehard gamers.

We Can All Get Along

Microsoft matters. It probably always will. However, it just doesn't seem as relevant -- and definitely not as cool -- as it did in the late 1990s when it began its run as the conference's keynote player.

It's understandable if the expo organizers are interested in moving in a new direction that reflects the show's forward-thinking nature. Under that scenario, it's also completely understandable why Microsoft's best way to save face was to bow out of the show entirely instead of having to rub elbows on the show floor with much smaller players demonstrating their upcoming gadgetry.

Will there be tension as next month's keynote closes in? Will attendees encourage verbal fisticuffs between Microsoft and the organizers? If so, the irony will be rich. The consumer tech industry will be looking forward to a Microsoft keynote for the first time in a long time, but for all of the wrong reasons.

Longtime Motley Fool contributor Rick Munarriz does not own shares in any stocks in this article. The Motley Fool owns shares of Microsoft, Apple, and Google. Motley Fool newsletter services have recommended buying shares of Apple, Google, and Microsoft. Motley Fool newsletter services have recommended creating a bull call spread position in Microsoft and Apple.

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Microsoft Ends a CES Tradition: 2012 Keynote Will Be Its Last

The LEGO Group has been around since 1932. For decades, the company was a leading toy manufacturer, but Lego’s sales dropped 40% in the two years since 2002 — due in part to the growing popularity of electronic toys. In 2004, the company had debts of almost $1 billion and was near bankruptcy. Then, spurred by the recession and the low cost of its toys, sales of Lego products began to pick back up, and have been increasing since. The company cut its workforce by 1,000 and reduced the amount of pieces it produces from 13,000 to 6,000, discontinuing its unpopular toys. For the first half of 2011, net sales have been up 25% over the first half of 2010. Today, it is the world’s fourth largest toy manufacturer.

Marvel is one of the most recognizable brands in the comic book industry, owing its fortunes to popular characters like Spider-Man, X-Men and The Hulk. But Marvel’s current success follows a serious slump. In late 1996, after declining sales of comics and trading cards, the company filed for bankruptcy. In 2000, the company released the movie X-Men — a huge success, which grossed almost $300 million worldwide. Two years later, Spider-Man was released, becoming the top grossing movie of the year. In 2009, Marvel Entertainment was purchased by Disney for $4 billion. This summer the company released X-Men: First Class, which has already grossed over $353 million worldwide in theaters.

Old Spice, a classic American brand that has been around since 1938, attained huge popularity by the 1970s. By 1990, however, the brand had become tired, associated more with its aging customer base than anything else. In 2000, the company, now owned by Procter & Gamble, came out with Old Spice Red Zone and revamped its advertising campaigns, focusing on the younger generation. Popular online ads featuring the Old Spice Man went viral, propelling Old Spice to the lead in the body wash market. In June 2010, sales increased a whopping 107%.

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In the late 1980s through the 1990s, Japanese game company Nintendo dominated the market with its Gameboy, Nintento Entertainment System, and Super Nintendo. In mid-90s, the company introduced the Nintendo 64 to combat the next generation of consoles that incorporated 3D graphics for the first time. While the N64 sold well, Sony had entered the market and its PlayStation sold more than double that of the N64. Nintendo would continue to struggle against its rivals. The Nintendo GameCube sold less than Microsoft’s Xbox and was blown out of the water by the PlayStation 2. In 2006, Nintendo finally recovered when it released the Wii, blowing out both the Xbox 360 and the PlayStation 3. The biggest reason for the Wii’s success was its new interactive design and ease of use. The Wii was successfully marketed to families with children, rather than just to video game players. To date the Wii has sold more than 86 million units.

Volkswagen was relatively unknown in the U.S. during the 1960s, even though its products were first sold here in 1949. By 1970, the company controlled 7% of the market. It was also the first foreign automobile company to open an assembly plant in the country since the 1920s. Despite their initial success, a number of missteps, including the release of the unpopular Rabbit, caused sales to plummet. According to a Wall Street Journal article, “By 1992, U.S. annual sales had hit a low of 49,000 cars, and VW contemplated pulling out of the U.S. altogether.” Just six years later, following the launch of the new Beetle, the company began its comeback. In 2000, the car company reported its best U.S. sales month in 26 years. In 2010, Volkswagen sold more than 250,000 cars in the U.S. — its best year since 2003.


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