ALKHOBAR, 23 January 2007 — For the last two weeks, the International Consumer Electronics Show (CES) which took place in Las Vegas, has been a focus of the CompuNet section in Arab News. CES is an enormously interesting exhibition featuring loads of new technologies and devices, many of which are bound to make a significant impact on our lives.
That said, for many reasons, making a trip to Las Vegas from the Middle East is not an attractive proposition. This is why the Consumer Electronics Association (CEA), producer of CES has announced a partnership with Epoc Messe Frankfurt, producer of Hometech Middle East, a major consumer technology event held in the United Arab Emirates. CEA will sponsor Hometech Middle East 2007 and will co-produce an International CES pavilion at the 2007 event. Hometech Middle East 2007 (www.hometechexpo.com) is scheduled for May 13-15, 2007, at the Dubai International Exhibition and Convention Center.
“The Middle East and the GCC countries in particular have become increasingly important to the global consumer electronics marketplace. As such, we expect the partnership between the International CES and Hometech Middle East to bring excitement and added value to the event. We anticipate that many Consumer Electronics companies, both global brands and hot new companies, will look forward to exhibiting with us in Dubai in May,” said Gary Shapiro, president and CEO, the Consumer Electronics Association. At CES, several board members of the Consumer Electronics Association had already confirmed that they would be attending Hometech Middle East 2007.
As sponsor for Hometech Middle East 2007, CEA will produce an International CES Pavilion, featuring key consumer electronics exhibitors. CEA also will produce conference sessions that will provide insight from leading consumer electronics experts and will host an international delegation to assist and educate US companies and media organizations on the growing Middle East consumer technology market.
As part of the partnership with Messe Frankfurt, the event will be renamed the International CES/Hometech in 2008, and will feature the latest in consumer electronics, home appliances and home automation systems.
“CEA has been hugely successful in promoting and expanding the consumer technology industry through the International CES,” said Christopher Hudson, exhibitions director for Epoc Messe Frankfurt. “Our partnership with CEA creates an excellent opportunity to expand the scope of the Hometech event, through the powerful name of the International CES.”
That a major consumer electronics trade association would be interested in sponsoring an exhibition in the Middle East might come as a surprise to some, especially when the size of the International CES in Las Vegas is considered. However, Simon Thompson of Retail International in “The Middle East Retail Real Estate Dynamic,” explains that in half a generation the region has developed into a $50 billion retail market. Thompson reports that this rapid growth has been driven by the six countries that form the Gulf Cooperation Council (GCC) of which Saudi Arabia is part.
He advised that fundamentally, the rapid growth in the market can be attributed to historically high oil prices and an investment in construction to meet the massive population growth. With a current population of around 34 million people, the GCC is the world’s 17th largest economy. A recent report from AC Nielsen predicts that the consumer markets of the Middle East will be worth a combined total of $500 billion by 2010.
Throughout the GCC, retail developments are coming online at a tremendous pace. There was around five million square feet of gross leasable area (GLA) in GCC shopping centers in the early 1990s. Today that figure stands at 53 million square feet of GLA, with a projected growth to over 130 million by 2010. That new space will need to be equipped with a wide variety of electronics and information and communications technology (ICT) and then a considerable percentage of that new retail space will be used to sell consumer electronics.
According to the Gulf Construction 2006 Yearbook, the GCC region as a whole is in the midst of a massive construction boom and this will continue to grow in the same manner in the near future. It is estimated that there are nearly 2,000 on-going projects in the Gulf region with a value of over $1 trillion. Buoyed by the unprecedented oil revenues, the Gulf states are increasing spending on services, investment and infrastructure. Added to this are the massive private investments in real estate, commercial, residential and tourism projects.
Meed Projects research has found that the UAE remains the Gulf’s largest construction projects market. However, the value of projects in Saudi Arabia doubled to more than $200 billion in the past year, with the Kingdom likely to close on the UAE in the next five years. Kuwait’s project market, the second largest in the GCC, has grown to $211 billion. Most all of these projects will require investment in electronics and ICT.
Major developments are also taking place in the transport sector. Gulf airports are expanding to handle between them an extra 250 million passengers a year by 2020. Regional airport developments to cater for this increased traffic are estimated at well over $40 billion, with $20 billion in the UAE alone. While Dubai is set to launch the region’s first metro, the GCC states are also studying the feasibility of setting up a GCC wide rail network, which will strengthen the intra-Arab trade. Saudi Arabia is in the process of planning and implementing several railways and light rail networks as well. Electronics and ICT will be an important part of all these developments.
The tourism sector is making its contribution, too. The new wave of freehold real estate development has seen a full range of world-class hotels anchoring every major real estate development in the region. Dubai has a goal of introducing another 50,000 hotel rooms by 2010 — nearly 70 percent more than at present. Abu Dhabi has forecast growth from almost a million visitors in 2004 to more than three million by 2015. Qatar will have at least 41 new hotels and hotel apartments by end of this decade, according to officials. A new feature of the hospitality sector projects is the development of quality three-star and four-star properties. All these properties must be equipped with electronics and ICT.
Another new sector which is gaining ground is facilities management (FM). According to one expert, the FM industry will outstrip the booming construction business in the next few years.
“It has been estimated that in the lifecycle of a building the design and construction phase only accounts for 20 percent of the overall costs. The remaining 80 percent is for operations, maintenance and management of the facilities during their lifetime,” said Edward Sanders of Dubai-based Drake & Scull Facilities Management.
With increasing use of electronics and ICT throughout buildings to provide both services to tenants and to assist in building operations for owners, the opportunities in this field are vast. These opportunities are not only in the areas of hardware and software applications, but also in the need to develop human resources to both install, operate and maintain these sophisticated systems. In Dubai alone, Sanders estimates that currently $36 billion is invested in construction and infrastructure works, putting the life-cycle cost of managing all of these upcoming facilities at around $144 billion according to the 20/80 percent estimate.
The region is also spending increasing amounts on education facilities, whether to build schools or to establish new centers of higher education. Libraries, science academies, research centers and sport facilities are springing up across the region. All these educational facilities will need to be equipped with electronics hardware and ICT.
So why is the Consumer Electronics Association interested in being a part of a technology exhibition in the Middle East? As this article has made very clear, in the next decade, in this region there is going to be extreme and rising demand for electronics and ICT products and services of all kinds. From equipment for hotel guest rooms, to mobile devices to put in the hands of a young population, to state of the art home theater systems, companies with high quality consumer electronics products backed up by first class after sales services will have the opportunity to reap outstanding regional success.
Participating in Hometech Middle East 2007 will provide an easy means for companies, many new to the region, to form partnerships, expand their channels and even interface directly with the region’s largest developers. It’s a win-win situation for the Middle East market and those who want to be a part of it.
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