Economic worries mar tech show's glitz

By Philipp Gollner and Marie-France Han

SAN FRANCISCO/LAS VEGAS (Reuters) - The world's major technology companies are trying to convince consumers they need an expensive, digitally connected home with the latest high-tech gadgets.

But there's a problem: an increasing number of consumers are having trouble just paying for the roof over the heads, much less a 150-inch television.

Few company executives at the annual Consumer Electronics Show in Las Vegas this week can avoid questions about the state of the economy, and the combination of a surge in the U.S. jobless rate, oil around $100 and a worsening credit and housing crisis has many on edge.

"The fourth quarter is full of strange, unanswerable situations related to unemployment, related to GDP, related to everything else," Sony Corp Chief Executive Howard Stringer said on Monday after a briefing at the show. "So it's too soon for us to be pessimistic, but I read the papers."

Electronics retailer Circuit City Stores Inc on Monday became the latest company to undermine the view of some analysts going into the holiday season that U.S. consumers would keep spending on computers, TVs, digital cameras and music players even as the value of their homes declined and foreclosures mounted.

Circuit City, hurt by a costly restructuring, said December sales at stores open at least a year fell more than 11 percent, and it expects to post a fourth-quarter loss.

More critical may be the report of December sales coming Friday from Best Buy Co Inc, the leading U.S. electronics retailer. It is expected to have done significantly better than its rival.

Executives at the show and analysts watching the industry's largest U.S. gathering said they feel confident about the current state of the industry. But they're uncertain about the rest of the year, when some economists expect the United States to slip into recession as the housing crisis worsens.