CES 2009: What have we learned this week?

Last year's Consumer Electronics Show was marked by decisive, pronounced changes in direction for the electronics industry. This year, the battle lines are being completely redrawn.

The single most pronounced aspect of CES 2009 was that, in nearly every industry category, the momentum had shifted in a completely different direction. The leaders and the followers, in many respects, had shifted direction -- in some cases, very surprisingly and almost impossibly. Here's some key examples:

Smartphones. To borrow the term directly from Microsoft, the "momentum" was entirely against Microsoft. Last year, the buzz was that 3G was settling in on BlackBerry devices, and that Windows Mobile devices were preparing for innovation against the Apple iPhone. Palm was almost a no-show. This year, Palm was the story of the event, stealing all of the thunder in that category by dropping a cluster bomb that made everyone else's offerings seem so, so last year.

Netbooks. We literally began carving the tombstones for this form factor at this time last year. The UMPC seemed like the bad seed, and Intel's attempt at turning away from it without losing all its assets -- with the MID form factor -- seemed feeble. And there didn't appear to be a niche in the market between smartphones and low-end notebooks. But with 3G smartphones being cut in entry-level price by half, and with some netbooks testing out the subsidy model for themselves, suddenly there was an opening. This year, everybody who mattered rushed to fill it: Dell, Sony, Acer, Asus, and MSI most prominently among them.

Blu-ray. Remember Blu-ray? Last year, it won the format war in a late-round knockout against HD DVD, and the stage was set for the onset of the next wave of interactive 1080p video. Maturity for the format was predicted for three years down the road. It came in one, with low-end players below $200 emerging two years ahead of the 2008 schedule, but ironically right on time according to the 2005 schedule. Meanwhile, as for that next wave of video, not even Blu-ray's most vocal advocates could recall if there were 21 titles available for BD-Live, or 62, or more.

On-demand content. Last year, it was Comcast that stunned everyone with the announcement of a very real effort to create an on-demand library for thousands of HD interactive titles. Well, this year, that library is coming, but the early reviews are less than thrilling, with the key problems boiling down to picture quality. Viewers are complaining that image compression creates on-screen artifacts that are far too noticeable to be enjoyable. Meanwhile, the HDTV manufacturers are making deals with YouTube, Hulu, Netflix, and Yahoo that could enable a veritable Alexandrian library of on-demand content delivery through IPTV, in a move that could bypass Comcast's, Cox's, and the CATV providers' pipeline.

Notebook PCs. Last year, as it became clear that the notebook PC would eventually overtake the desktop form factor as the model of choice for consumers, the emphasis was on making portable PCs into take-along media centers. But with the buzz around Blu-ray fading out and the spotlight trained on netbooks, despite some genuine innovations in the typical notebook category, notebooks this year did not garner the attention they have before -- even though they're now the de facto home PCs.

The CPU wars. Intel's Core 2 Quads were just on the way last year, in the next maneuver of what was considered to be an ongoing systematic pummeling of competitor AMD. But in a very surprising, though perhaps equally strategic, maneuver, just as AMD was preparing its counterpunch with the Dragon platform, Intel switched its CES focus away from PC CPUs and toward media processors, for the first time. It was almost as if saying AMD wasn't worth bothering with.

The rapidly changing economy, and the changing fortunes of companies such as Palm, have nearly reset the entire game board for CE. Any analyst who still thinks the future trend is a linear projection of the past had better throw away his slide rule and get with the program.