IBM Returns to the CES Show

Big Blue says it's still a major player in consumer space.

IBM, which shed its PC business two years ago and has seen Apple Computer turn away from its Power-PC chips in favor of Intel technology, wants to prove that it still has a role in the consumer marketplace.

It has been a decade since IBM showed up at the International CES show. However, that 10-year absence will end when the company opens its booth on the showroom floor at the consumer electronics event in Las Vegas, starting Jan. 8.

Since IBMs last appearance at CES in 1997, much has changed, and the company is looking to prove that its "cool" enough to compete with consumer offerings from such industry heavyweights as Hewlett-Packard, Dell, Intel and Advanced Micro Devices.

Specifically, IBM will demonstrate how its components, technology and research have been used to create a number of highly regarded consumer electronics products. From its perch at the show, IBM will tout how such technologies—including its Power Architecture, Cell Broadband Engine, Secure Blue encryption technology for chips and the devices in which theyre used—have played a role in developing consumer-oriented cell phones, game systems and other products. IBM officials say the company is a force that has been making billions of dollars in this space working with big-name partners such as Sony, Toshiba, Microsoft and Nintendo.

All these technologies fall under IBMs TCS (Technology Collaboration Solutions) organization, which was formed in early 2006 as an umbrella division to house such units as IBMs microelectronics, OEM component sales and telecommunications.

"The biggest part of this message is that IBM is here to continue to drive growth with our partners," said Norman Liang, business development executive for the consumer electronics/media and entertainment division of TCS.

Liang said the Armonk, N.Y., company has been "quietly" assisting companies—from enterprise vendors such as Microsoft to small and midsize businesses—in developing these technologies.

IBM lost its place in the consumer market after selling its PC business to Lenovo Group in 2004 and then watching as Apple in 2006 started offering Intel-based Macintoshes along with PowerPC-based machines, said Toni Duboise, an analyst at Current Analysis.

"This show is a way for IBM to re-emerge, and the possible payoff is renewed brand recognition," Duboise said. "It is evident that there is a gray line between consumer electronics and the computer and IT worlds. It makes a lot of sense for them to be there."

While the IBM name remains strong within the IT world, its lack of name recognition within consumer electronics has hurt the company with mainstream and consumer buyers.

In addition, in a competitive world where one of IBMs core businesses—services—is being challenged by the likes of HP and Dell, company executives may want to keep the IBM name fresh in the minds of both partners and consumers, Duboise said.

"IBM is out of the PC business now," Duboise said. "For now, they are selling components and services, and this is an important move for them."

In looking to rebrand itself as both an IT and a consumer electronics innovator, IBM will show off its Power Architecture chip technology, which is used in the three most popular video game systems: Microsofts Xbox 360, Sonys PlayStation 3 and Nintendos Wii.

At the show, in an agreement with Circuit City, IBM will work to create a "virtual living room" to help customers choose the right television and speakers. In 2006, IBM announced that it would invest $10 million in technologies that help enable virtual worlds such as Linden Labs Second Life. IBM also will showcase several collaborative projects in which companies have used its technology, including a karaoke machine that uses the same technology found in ThinkPad notebooks. Another exhibit will feature an effort with St. Jude Medical on a portable device that programs implantable cardioverter defibrillators and pacemakers.

Although IBM will make no major announcements at the CES show, Liang said the company will demonstrate that its enterprise technologies have a place in the consumer market.

"What once went into IT has really become part of todays consumer electronics products," Liang said.