Recession Makes Computer Trade Show a Must-Attend Event : Comdex: The slowdown has companies locked in fierce competition for picky, price-sensitive customers. For some who are struggling, this year’s gathering may be their last hurrah.

Western Digital Corp., one of Orange County’s biggest technology companies, didn’t rent any show space last fall at Comdex, the giant computer industry trade show in Las Vegas.

The billion-dollar company saw trouble coming in its business of making computer components--a line that includes add-on boards and disk drives--and was looking to save several hundred thousand dollars.

Now, after a year of wrenching restructuring that involved trimming about 16% of its work force through layoffs and attrition, and a revamping of its product line, the company feels that it must go back to the sales floor of the trade show and remind its customers who it is.

“We have a lot of new products, the industry is in turmoil, and we think it will be valuable to be there,� said Chairman Roger W. Johnson.

As Western Digital’s experience suggests, these are troubling days for Orange County computer companies and confusing days for their customers. At the Comdex show that begins Monday, 80 Orange County computer firms will be among 1,800 exhibitors taking part in the marketing frenzy. And the show will give them a chance to take stock of how bad things really are.

The 13th annual Comdex show will take up more than 2 million square feet of exhibit space in the Las Vegas Convention Center and at eight nearby hotels. At the show, exhibitors try to grab the attention of passersby with gimmicks ranging from table tennis matches to salespeople dressed in bunny suits.

But a decade after the birth of the IBM personal computer, industry stalwarts are reporting losses and laying off workers by the hundreds. They are also restructuring their products to appeal to picky and price-sensitive consumers who are faced with a bewildering array of competing technologies.

“When you open the newspaper and see the numbers of layoffs at companies like IBM, Wang (Laboratories Inc.) and Unisys (Corp.), that’s really scary,� said David Silver, chief executive of Kofax Image Products Inc. in Irvine. “I think things are pretty bad beyond a couple of hot segments.� Kofax makes hardware to enable PCs to process images of documents.

Some Orange County companies stand out as exceptions in this recessionary year. AST Research Inc. and Advanced Logic Research Inc., two Irvine companies that emphasize low-price products in their marketing strategies, have shown higher profits during the recession.

“You will see a lot of hype at Comdex as everyone tries to project an image that they are bigger than they really are,� said Safi U. Qureshey, co-chairman of AST. “But there is no clear signal the economy is coming out of a recession, and this could be the last hurrah for some companies.�

Despite problems at many computer companies, analysts point out that the industry is still growing at a healthy 10% a year, largely on the strength of sales of software products that continue to outpace the industry as a whole. But compared to a year ago, the county’s circle of highly profitable companies has shrunk. Big players in the county such as Archive Corp. in Costa Mesa, Western Digital and CMS Enhancements Inc. each reported big losses in recent quarters.

Silver, the Kofax executive, believes that many of the industry giants are more preoccupied with fights over the flavor of technology standards than true innovation.

“I think the show will be kind of sleepy,� he said. “Everything starts out at Comdex being hyped as the next big technology, and it takes two to six years to become real.�

Due to the falling prices of components, some PC categories are hot. Sales of notebook computers, which pack the power of a desktop computer in a space the size of a briefcase, are expected to hit $7.8 billion worldwide this year, compared with $2.7 billion in 1990, according to Infocorp., a market research firm in Santa Clara.

AST will introduce two new notebook computers, including a machine based on a chip from chip maker Advanced Micro Devices Inc., a rival of market leader Intel Corp., and a model with a color screen that sells for $5,000.

Competing notebook models will also be introduced by ALR and Toshiba America Information Systems in Irvine.

Toshiba, which holds 21% of the portable computer market but stumbled in the latest generation of notebook computers, is in a good position to make a comeback with its new products, said Peter Teige, a computer analyst at Infocorp. But the field remains crowded, and it will include some dazzling color notebook computers from Sharp Corp. and Epson Corp.

Like last year, the production of new notebook computers would probably be limited by a scarcity of color display screens, which are manufactured in the Far East. However, unlike last year, the new generation of computer disk drives are expected to be available in large quantities, said Thomas Yuen, co-chairman of AST.

Another hot category: Networks of personal computers have also begun replacing the large, centralized computer in many corporations because of lower costs and new technologies that link PCs. About 38% of all PCs sold this year are expected to be hooked to some kind of network, according to Dataquest Inc., a market research firm.

Albert Wong, president of computer maker Amkly Systems Inc. in Irvine, said his company is focusing on the network niche. It will will show a line of PCs that offers data security features for networks.

But emerging technologies expected to generate talk at Comdex--such as computers that recognize handwriting and so-called multimedia computers that combine sound, graphics and video--may be too young to pull the industry out of its yearlong slump, analysts say.

Companies are choosing to wait before launching such products until the market and technology standards are more clearly defined. That way, they can avoid the risk of being guinea pigs, Qureshey said.

Jim Farooquee, chief executive of CMS, doesn’t mind that role. His company, which branched out from its business of manufacturing computer storage devices to marketing computers made by South Korea-based TriGem Corp., will be among the first companies to show a pen-based computer, made by TriGem, at Comdex.

The computer, which has a display screen that doubles as an electronic writing slate, is expected to begin shipping in the first quarter, Farooquee said.

“The pen is a much more intuitive tool, especially for mobile people with clipboards, and it has the potential to replace the computer mouse,� Farooquee said. “The key is what software will come.�

William Lempesis, a pen computer analyst in Pleasanton, expects about a dozen companies to ship about 497,000 pen-based machines during 1992, up from 100,000 in 1991. He says the main appeal of the machines will be the ability to take handwritten notes on a computer during a meeting. The user could later transfer them to typewritten text.

ALR will continue to update its desktop computers, notebook computers and high-end servers that control networks of personal computers, said Dave Kirkey, vice president of worldwide marketing.

“The race for new technology has created some confusion among customers, and our job is to clear up that confusion,� Kirkey said. “In the recession, I think the companies that don’t have a strong base in engineering will have a tougher time keeping up.�

Despite the gloom in the industry, the number of Orange County exhibitors making the pilgrimage to Comdex isn’t falling off. Although it is not open to the general public, the show is expected to draw 125,000 industry professionals. That’s reason enough for companies to join the circus-like atmosphere.

David Dukes, president of Santa Ana-based computer distributor Ingram Micro Inc., said his company is returning to Comdex for the first time in six years.

“Our primary mission is to recruit dealers,� said Dukes, whose company reported a 38% increase in sales to $506 million for the quarter ended Sept. 30. “But we also have to be there to look for new and improved products to sell.�

What’s New From O.C. at Comdex

Advanced Logic Research, Irvine:

Two lines of notebook computers, including a line of computers based on Intel Corp.’s newest microprocessor, or main number- crunching chip; new servers, which act as repositories of data for networks of personal computers.

Amkly Systems, Irvine: A line of computers for networks that offer data security features.

Archive Corp., Costa Mesa: Anaconda series of quarter-inch-cartridge, tape-drive products used to back up data on personal computers, plus other tape-drive products with high storage capacity.

AST Research, Irvine: Three lines of notebook computers, including a model with a color screen and a model based on a chip from Advanced Micro Devices Inc. in Sunnyvale; privately showing a line of multiprocessing machines, which use more than one microprocessor, or main number-cruncher, to improve overall speed; showing a new line of servers.

CMS Enhancements, Irvine: Demonstrating a pen-based computer that recognizes handwriting. The machine, made by South Korea-based TriGem Corp., will be ready to ship sometime during the first quarter of next year. CMS will also ship disk-drive upgrades for Apple Computer’s portable computers.

Kofax Image Products, Irvine: A set of software enhancements for its hardware products that enables computers to store and retrieve images of documents.

Odetics Inc., Anaheim: An automated tape cartridge system that serves as a library for computer storage cassettes. The library has the capacity to store the names of every person in the world.

Toshiba America Information Systems Inc., Irvine: Two lines of notebook computers and a lightweight printer for notebook computers.

Western Digital Corp.: A video add-on card that improves speed of Windows 3.0 software by up to 1,000%; a video controller that extends laptop battery life from three to five hours, and logic chips that allows notebook computers to conserve power.