HANOVER, Germany (AP) — For the first time, telecommunications companies have a bigger presence than software firms at the world's largest technology trade show.
Seeking to drum up business at this year's huge CeBIT fair, the tech industry is gambling on more powerful handheld devices with color and audio capabilities to get consumers and businesses spending again.
With spending on PCs stagnating, the industry hopes the new emphasis on computing removed from the desktop will reignite excitement and sales.
Nokia, Siemens, Ericsson, and Motorola were all showing off Internet-enabled phones, and handheld makers such as Compaq were displaying handhelds with cell phone capabilities, blurring the lines between the two classes of gadget.
Right now, though, the slow global economy and the aftereffects of the Sept. 11 attacks are still weighing on the mood of many at the eight-day show, whose more than 8,000 exhibitors were opening to the public Wednesday.
Nokia, the world's biggest cell phone maker, lowered its forecast for first-quarter sales Tuesday. Net sales for the period had already been predicted to decline by 6 to 10 percent, and the company did not specify a new forecast.
But German Chancellor Gerhard Schroeder sided with the optimists in his ceremonial opening speech Tuesday night.
"After an economically difficult year with a deep drop in the world economy that hit Germany especially badly, all signs point toward a recovery," he said. "I am certain that this CeBIT will send a signal of confidence and revival."
Nokia, for instance, unveiled five new Internet-capable phones to go on sale in the next few months. It also announced an alliance with Seattle-based RealNetworks that would make all new Nokia handsets running the Symbian operating system capable of playing video and audio from the Internet.
The deal involving the RealOne mobile player reflects industry expectations that the wireless market for audio and video could eventually be as big, if not larger, than the PC market.
Maturing handhelds were also on show.
Compaq's iPAQ has jacket-like attachments that add cell phone or GPS satellite-positioning capabilities. It can also send files to a printer without a wire through the Bluetooth radio standard.
Several phones, like Ericsson's P800, have built-in digital cameras.
The new mobile devices are faster than the last class of Internet phones, which failed to catch on with consumers and businesses. Because the wireless application protocol, or WAP, transmission standard was slow, it came to be dubbed "Wait and Pay."
The new generation uses GPRS technology, which splits data into small packets and lets it move faster over the existing networks. Handset makers and operators hope it will tide them over until new "third-generation" networks start coming into use later this year.
Still, the show has about 130 fewer exhibitors this year than last, with the U.S. presence dropping to 345 from 477.
And many experts say spending on computers, software and phones is likely to remain flat in Europe and worldwide.
Spending on wireless network equipment worldwide will fall some 5 percent in 2002, according to a research note by Merrill Lynch, and the Forrester research firm predicts that spending on computers and software in Europe will grow by only 0.7 percent in 2002.
"The crisis of the last year was a purifying thunderstorm," said Joerg Menno Harms, board chairman of Hewlett-Packard's German division. "Now the heat is gone, it is a bit cool and there's no reason for euphoria.
"But the fresh air is good for coming up with new ideas."