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Slow Traffic, High Hopes For Dubai CES/Hometech Event

Dubai, United Arab Emirates – The International CES/Hometech isn’t the International CES in Las Vegas, yet backers of this event held at the Dubai International Convention Centre, here, this weekend say this market has major growth potential for the CE business.

This second annual event is still finding its way, with slow floor traffic being noticeable, but the vast growth potential of the region — 8.1 percent forecast by CEA for Africa, the Middle East, Eastern Europe and Western Europe combined — represents significant opportunities for the CE industry. Estimated attendance was 10,000.

Dubbing the UAE “a region the world cannot afford to ignore,” Elizabeth Hyman, CEA’s international VP, told attendees an estimated $1 trillion in construction currently underway in the UAE provides huge potential for the CE industry, particularly in the areas of high-end audio, mobile electronics and gaming. Hyman told attendees that online gaming alone represents $1 billion in global opportunity. For that reason, Hometech added a gaming zone sponsored by HP, NVidia, Microsoft and others this year.

Hometech, held from May 25 through May 27, is a collaboration between CEA and IFA sponsor Messe Frankfurt and is part of a larger home show expected to draw 15,000 trade-only attendees and 250 exhibitors, covering 91,493 square feet of floor space. The single hall devoted to consumer electronics showed everything from air conditioners and microwave ovens to flat-panel TVs and high-end audio.

The eclectic electronics section included distributors of high-end audio/video gear including B&W, Meridian, Runco Linn, Loewe and Naim Audio; a 10-vehicle mobile electronics section sponsored by Rockford-Fosgate, Monster, Earthquake and Lightning Audio; the gaming section supported by Microsoft, HP and NVidia; and an array of Asian companies selling everything from vacuum cleaners to flat-panel TVs to bread makers.

It’s the lack of focus that had some exhibitors grumbling during day two of the show. One exhibitor on hand hoping to demonstrate custom turnkey integrated electronics solutions to real estate developers, said, “I’m not sure this is the show for that when we’re 15 meters away from tea kettles.”

Lara Crivellaro, assistant GM for G&BL, an accessories and A/V furniture company based in Italy, was also disappointed by the turnout. The company, which currently distributes its products in Italy, Germany, Spain, Portugal and Russia, had hoped to meet with new distributors here. “But the key players are missing, Crivellaro said. “You don’t see Sony, Samsung, Microsoft, Toshiba and their distributors aren’t here. I thought this show would be more like CES but smaller. Instead, it’s about everything for the home.”

What business G&BL did accomplish was with its current distributor. “And that could have been done somewhere else,” Crivillaro says. Still, she held out hope. “One order would be worth the fare,” she said. “We’ll see.”

For Bishara Tannous, president of a Chicago-based company bearing his name, Hometech offers exposure to a new product category he’s hoping to develop. His Shishavac is “the world’s first narghile preparation system,” a machine that cleans pipe hoses for narghile machines which are hugely popular in the Mideast. “Yeah, traffic is slow,” said Tannous, whose product is expected to come out this year for around $250. “But if it flops this year, it doesn’t mean anything. If you’re looking for customers in this region, it doesn’t make sense to judge interest on one show.”

For Monster Cable, attendance was a way to gain exposure in the Mideast and to advance consumer electronics in the area. Denise Morales, worldwide sales VP told TWICE, “it’s a low turnout, but we want to support the industry.” What would make it more successful for a company like Monster Cable would be more visitors from Europe and Eastern Europe, she said. “But I’m not sure if there are enough retailers to support manufacturers making a big investment,” she said.

Monster, a repeat exhibitor from last year, will be back again next year, Morales said. Monster Mideast came with 15 people, but pulling in more of the trade from elsewhere will be hard, she said. “If there’s no new product or technology announcement from the likes of Steve Jobs or Microsoft it’s hard to attract people.”

One company happy with its results was Al-Futtaim Electronics, part of an 80-year-old UAE conglomerate which owns Dubai’s Plug-ins ElectroniX retail chain and serves as UAE distributor for Panasonic, Sanyo, Toshiba and its own private-labeled Aftron brand sourced by manufacturers in China and Korea. The company set up a room with various scenarios showing how a Control4 system can be used in the bedroom, living room and all over the house. Al-Futtaim recently inked its first contract for Control4, a $1.2 million project for 70 homes in the Orange Lake region of Jumeirah Golf Estates in Dubai.

According to Vishesh Bhatia, group director of electronics, engineering and technologies for Al-Futtaim, the Control4 package—including control of air conditioning, security, pumps, lighting and audio distribution — adds $10,000-$20,000 to the cost of each home. Recurring revenue from service contracts — after the bundled two-year service contract is up — will bring in an additional 5 percent annually based on the cost of the system.

On the first day of the show, Bhatia said the company received 30-35 inquiries about the Control4 system. Roughly 600 showgoers passed through the company’s booth tour over two days and included a mixed bag of “both curious and serious” attendees.

Al-Futtaim was also there to announce a training program between its Techserve installation company and CEA and its training partner Bedrock Bedrock held a series of training session with Techserve at the show. Retailers speaking at Monster’s Best of the Best event held on Monday evening at the show spoke of the challenges of retail in the region, from holding on to salespeople and integrators who routinely tend to leave jobs after a couple of years to having salespeople educated enough to make a compelling sale to consumers.

Working with CEA and Bedrock, Techserve plans to offer its training classes to anyone who wants to take them, whether they’re employees of the company’s Plug-ins chain or not. At the show, 107 participants signed up for the training sessions, including a 9-hour program on Monday. Bedrock’s program teaches the fundamentals of training for system integration and the goal over the next few months is to have a certification program in place for the Mideast, according to CEA. Bedrock courses are all available online. The full curriculum includes 90-100 hours of coursework.

At various points in the scaled-down show, Hometech sounded like the mobile section at International CES on a compressed scale. There was no shortage of SPL as tricked-out cars and SUVs from Rockford-Fosgate, Earthquake and others pumped out hip-hop tracks and pop music while a diverse group comprising Western men in business suits and Muslim women in burkas took it all in.

On the video side, TVs don’t play nearly the high profile role in Dubai as they do at CES, where attendees crowd around flat screens all over the show floor to monitor NFL playoff games. Daewoo was the exception with several walls of LCD TV, and Haier showed a few TVs along with sound systems and refrigerators, but most TV displays were low key. The lack of fresh content is likely the reason, with HDTV not due in the region until 2010 at the earliest and possibly 2012. Flat panel TVs are hot for their aesthetics, according to Jehangir Khan, regional manager of Monster Middle East but if consumers want high definition, they have to buy Blu-ray Disc players.

That’s the hope of Khan’s boss Noel Lee, head of Monster Cable, who in a keynote spoke to the virtues of Blu-ray Disc, the area’s best hope for high-def content for the near term. “And thank goodness you need HDMI to make that happen,” he said. Lee promoted the one-wire HDMI solution to replace nine other A/V cables along with Monster’s speed rating system for HDMI.