05.17.2007 — New construction is booming in Dubai, where the Consumer Electronics Association (CEA) sponsored Hometech Middle East, produced by Messe Frankfurt. Legend has it that some 15% to 25% of the 125,000 construction cranes currently operating in the world today are located in Dubai, part of the United Arab Emirates (UAE).

After spending the week there with a delegation of CEA leaders and members of the press, I believe it.

Thousands of cranes operate full time in Dubai, helping to erect some 700,000 new apartments.

It's a stark contrast to the United States, where home technology integrators bemoan the weak construction market.

For all the development, though, Dubai seems to trail our country when it comes to integrated home technology. During Hometech, I spoke with several integrators and distributors who said that structured wiring, home automation and multiroom A/V are slow movers.

"People spend a lot of money on what they can show off," says Sunil Gopal of the Dubai-based integration and distribution firm Imagine, adding that the technology in a home does not normally match the quality of a homeowner's other possessions such as flashy cars.

Opportunity Abounds

Even though it may lag in home-technology penetration, Dubai and other members of the Gulf Cooperation Council (GCC) present an undeniable opportunity for consumer electronics.

The youth population in the region is among the world's fastest growing, representing a market that is more Internet-savvy and gadget-happy than the older set. Around 42% of the GCC population is less than 15 years old, versus 17% in the U.S.

Dubai Silicon Oasis (DSO), now under construction, is expected to attract the world's top technology talent to the region. The city-within-a-city will span over 7.2 million square meters and include commercial, residential, retail and educational facilities.

We were fortunate to dine with the director of DSO, Dr. Eesa Bastaki, who has dreams of rivaling the famous Silicon Valley in the U.S. Unlike its American counterpart, though, DSO is an organized enterprise backed by the Dubai government. Housing will be subsidized to attract technology leaders, and to enable lower-paid educators and technicians to supply much-needed human capital to the area.

Zero personal and corporate taxation is another decent benefit for locating a high-tech business there, and Dubai promises "stringent IP [intellectual property] laws and support."

The entire community will enjoy a state-of-the-art technology infrastructure that includes subsidized server farms, 24-hour tech support and "reliable, abundant and inexpensive power and energy utilities."

CEA is so bullish on Dubai that, not only did the group forge a partnership with Messe Frankfurt, it also held its Board of Industry Leaders meeting in Dubai -- the first time that such a meeting was hosted outside of the U.S., according to Gary Shapiro, CEO of CEA.

For the CE industry, Dubai represents "the most logical step for companies wishing to grow their brands internationally," Shapiro said in a keynote address, adding that the region offers "creativity, growth and excitement: What a great future!"

He pointed out that $47 billion is being invested in new construction in Dubai, which is a mere two-hour plane ride for 1.5 billion people.

The ninth largest seaport in the world and ranked 19th in the world in broadband Internet penetration, Dubai "is a region you simply can't afford to ignore," Shapiro said.

Indeed, CEA is helping its constituents tap the Dubai market with Hometech Middle East, which this year featured about 300 exhibiting companies.

The show continues CEA's efforts to provide more international opportunities for CE providers. The international foray began last year, when CEA teamed up with another tradeshow producer to present SinoCES in China.

"In general, the idea is to have a trade-show partner on every continent," says Liz Hyman, vice president of CEA's international efforts. Where to next? Possibly India or South America.

The Verdict on Hometech

Traffic on the show floor was pretty light this year, but CEA joined Messe Frankfurt late in the game. Both organizations expect a much stronger turnout next year.

Nevertheless, the show afforded a nice and relatively inexpensive way for U.S.-based vendors to learn about the UAE market.

"We don't do a lot of business internationally," says Christopher Reiff, vice president of sales for Channel Vision, a Costa Mesa, Calif.-based manufacturer of structured wiring, communications and multiroom A/V systems.

Reiff says he spoke with just a handful of dealers and distributors, but "we've met enough people that it made it [Hometech] worthwhile."

Ilana Diamond, president of Sima Products Corp., Oakmont, Penn., came to Hometech to promote the company's high-end outdoor movie screen. "We thought, hmmm, where are there rich people with pools?"

Splitting a booth with another exhibitor cost Sima about $3,000. "That's just one customer," Diamond says. "That's all it takes."

In the end, Diamond seemed to have found one distributor for the screen, and another for the company's digital-connectivity gadgets.

Next year's CES Hometech Middle East -- the new name for Hometech -- will be held May 25-28.

Eckhard Pruy, CEO of the show's producer Messe Frankfurt, says he expects the show to be three times larger than this year.