LAS VEGAS, 6 February 2007 — Consumer electronics are big business. Strategy Analytics announced that 2006 sales of digital consumer electronics reached $167 billion worldwide, an increase of 31 percent. But a slowdown is predicted for 2007, with growth of only 11 percent worldwide. If the industry is to thrive, there’s a need to start developing an stronger appetite for consumer electronics in emerging markets.
Consumer electronics is electronic equipment intended for use by everyday people. It’s a very broad field and includes devices such as digital cameras, DVD players, MP3 players, Plasma/LCD TVs, games consoles, entertainment PCs, Internet appliances and home theater equipment. Research firms consider consumer electronics to be products used for home, personal or entertainment use, rather than professional use, but the distinction is increasingly blurred.
The Consumer Electronics Association (CEA) is US-based trade association promoting growth in the consumer technology industry through technology policy, events, research, promotion and the fostering of business and strategic relationships. As a means of furthering this mission, in partnership with Messe Frankfurt, the CEA will sponsor Hometech Middle East 2007 in Dubai and will co-produce an International CES pavilion at the 2007 event. In 2008, Hometech will be renamed the International CES/Hometech, and will feature the latest in consumer electronics, home appliances and home automation systems.
CEA President and CEO Gary Shapiro and his team are very enthusiastic to be coming to the Middle East. With Karen Chupka, Senior VP, Events and Conferences, International Consumer Electronics Show, Shapiro met with Arab News to discuss the association’s foray into this region.
“We are going to the Middle East because it is a rapidly growing market which is ripe for a rapid expansion of technology,” said Shapiro. “We are passionate believers that technology makes a difference in people’s lives and allows greater communication. We also believe that trade is an important staple in the pursuit of peace.”
He emphasized that the Hometech Exhibition is already a success and that CEA will be simply growing that popularity.
“The one thing we bring immediately to the partnership is the attention we’ve been giving to Hometech here at the 2007 International CES with the 5,000 members of the press who have been here and the 140,000 trade attendees.” Shapiro said. “We’ll also be bringing over a delegation. We have a 45 person member board of leaders in our industry and several of them have already said, ‘I’m going.’”
Despite the enthusiasm, the CEA president stated that expectations for the new partnership should be kept reasonable. The International CES/Hometech show will not be the size of the US International CES, “not next year not even in five or 10 years, because it takes a long time to grow, but solid steady growth is our goal.”
One of the reasons that CEA decided to come out to the Middle East was the feedback they received from businessmen who visited the region.
“A number of our people were in the Middle East and they noticed the growth in their sales statistics. Individual companies selling products there were saying, ‘I’m doing really well in this market but we need help. We need to get more distribution and we need a good trade show here and we need the ability to reach the market,’” Shapiro said. “A trade show provides a mechanism of reaching a market. It’s not like you have to go there and start knocking on doors and be asking, ‘Who’s a good distributor?’ You establish a presence at a trade show and you can meet people face to face and hear a lot of opinions all in one place — and they come to you. It’s cost effective.”
Chupka echoed his comments. “When we came over to visit in 2006, we saw that there was so much new construction going on in the housing market. It was apparent to me that so many people are trying to set themselves apart and find differentiators. Consumer electronics and technology can do that,” she explained. “Building owners want to show that their building will offer better systems and services than the one that just opened. That’s a lot of home network technology that will be needed, LCDs, all sorts of consumer electronics products.”
CEA found that many smaller US-based companies weren’t in the Middle East market but would like to be. The trade association also believes that from Dubai there is good business reach, as far as Russia, India and Africa.
“People from those regions are interested in traveling to Dubai for a trade show,” said Chupka. “That was compelling for us too because it will allow us to reach some markets that we aren’t ready to go into directly yet.”
CEA does have a Washington forum scheduled for March and one of the sessions that they are planning to offer is one on how to do business in the Middle East. There appears to be a need for such a seminar, as at the 2007 International CES numerous firms spoke with Arab News expressing interest and confusion about doing business in this region.
Right now there isn’t the kind of business exchange that there should be between Middle Eastern businesses and their US counterparts. Unfortunately, at the 2007 International CES there were no national pavilions from any of the Middle East countries. CEA said that Dubai-based iMate had looked at coming to CES, in part because of their partnership with Microsoft, but their presence did not materialize. Even the number of attendees from the Middle East at the 2007 International CES was small. The CEA president acknowledged that US visa and travel restrictions have made a trip to the International CES daunting for many international businessmen, not only those from the Arab world.
“The issue in regards to visas for businessmen coming to the US is something I’ve testified before Congress about,” Shapiro said. “At the start of this year I raised the visa issue with the secretary of commerce. Honestly, the challenge we are facing is that when it comes to the White House, since Sept. 11 they are focused on security and they don’t think about the ramifications for trade.”
He continued, “When we try to talk to the White House about this they say don’t even think of talking to us about this, security is the only thing we care about. If you put yourself in the mind of a government bureaucrat, they can never get in trouble for denying a visa but they are afraid one will slip by that they granted and that’s what it really comes down to.”
The CEA president stated that improving the US visa situation is something the trade association must keep working on and Shapiro advised that he is not alone in his views. The former head of US Homeland Security, Tom Ridge, has been hired by the Discover America Partnership to help make the case that easier access to the United States is needed for foreign travelers — leisure and business travelers.
A new study conducted by the Travel Industry Association on behalf of the Discover America Partnership found a nearly 20 percent drop in the United States’ share of overseas travelers since 2000, and from 2004 to 2005, a 10 percent decline in business travel. The study claims that this has cost the US billions of dollars in revenue and nearly 200,000 jobs.
That analysis came on the heels of a recent study by the Discover America Partnership that uncovered widespread concerns with the US entry process. Travelers surveyed rated America’s entry process the world’s worst, by a 2:1 margin. Travelers to the US are more afraid of US government officials than the threat of terrorism or crime. Two-thirds of the travelers surveyed feared they would be detained at the US border because of a simple mistake or misstatement.
“This is something where I think the United States is hurting itself,” said Shapiro. “The US used to be a place that everyone came, a place that attracted the best and brightest from around the world. Now it has a sign up that says, ‘You’re not welcome.’ That’s a very dangerous thing. I know the business community doesn’t feel this way. It’s very frustrating, especially for our industry. If you can’t get people in to see the equipment you can’t sell it. We know that other countries around the world are selling against the United States that way.”
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