Middle East homes get smart

Consumer electronics companies are bracing themselves for a renewed wave of demand for home networking multimedia products as the region’s construction boom continues to drive the uptake of smart home technology. ECN reports.

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By  Ronan Shields Published  March 1, 2007

Home networking|~|Gates.Web.jpg|~|Microsoft chairman Bill Gates believes digital convergence will revolutionise both the CE and IT markets. |~|Consumer electronics companies are bracing themselves for a renewed wave of demand for home networking multimedia products as the region’s construction boom continues to drive the uptake of smart home technology. ECN reports. The region’s home networking market experienced a boost in sales in 2006 as the spread of wireless broadband networks in the region’s developed markets spurred demand for Wi-Fi-enabled consumer electronics devices. The upshot of this trend is an increase in demand for home-based wireless network applications linking household appliances via a central server. Retailers report the home entertainment segment as driving this boom in the market; a development that vendors have taken note of. This year’s consumer electronics show (CES) expo in Las Vegas, USA, saw vendors launch a raft of new products hoping to meet consumer demand in this market segment. Research firm In-Stat predicts that the digital home server market will more than double within three years to the value of US$17 billion. Rival industry analyst ABI Research claims that networking technologies are ‘transforming’ the consumer electronics industry. The firm predicts that Wi-Fi-enabled product shipments will rise from 40 million units in 2006 to 249 million units by 2011. This product segment has seen traditional IT companies broaden their scope with Hewlett Packard (HP), Microsoft and Apple all committing significant resources to developing applications designed to enable the wireless distribution of media content to multiple devices over a home network. HP debuted its first wireless high definition LCD TV last year, which is capable of receiving content wirelessly from a PC, and debuted its MediaSmart server at this year’s CES expo. Microsoft continues to expand its portfolio beyond its core IT- market with the introduction of an Xbox 360 set-top box capable of streaming live television and high-quality video images over internet networks. Company chairman Bill Gates underlined the firm’s intentions to boost its presence in the consumer electronics field, claiming that digital convergence will revolutionise both the consumer electronics and IT markets. Speaking to the media at this year’s CES, he said: “The word ‘PC’ is now a word that encompasses a lot of different things; everything from a six- to 60-inch screen is now possible with the new technologies available.” Global consulting company Frost & Sullivan reports that the global set-top box market pulled in revenues of US$1.7 billion in 2006. It estimates that by 2010 the figure will have more than doubled, making the market worth a colossal US$4.23 billion. “The introduction of IPTV functionalities such as digital video recording (DVR) presents a great opportunity for the growth of the set top box market,” says Frost & Sullivan analyst Natarajan Krishnamurthy. Apple’s entry into the home networking market is closely linked to the current iPod success story. However, the firm hopes to massively impact the market once again with its Apple TV (previously touted as the ‘iTV’). Some industry figures have expressed disappointment at the Apple TV’s picture resolution of 720p. However, the device’s ability to connect to up-to five separate PCs has led many to predict that it will be the hub for many of the region’s digital homes after its launch at the end of this month. Traditional consumer electronics vendors are matching these initiatives with the development of ‘smart’ appliances and proprietary home network solutions. Je Hyoung Park, president of Samsung Gulf Electronics, says that Samsung’s Home Vita home networking application portfolio has proven massively popular with consumers in its native South Korea and in certain European markets. “The technology provides homeowners access to a range of functionalities, including remote control of appliances, wireless multimedia networking and home security applications,” he explains. Last year Samsung combined with UAE telecommunications provider Etisalat to showcase a working demonstration of the technology in Abu Dhabi. Park says the demonstration paid huge commercial dividends, with Samsung attracting interest from a host of property developers, culminating in the company securing a major deal with firms involved in the US$3.3 billion development of Abu Dhabi’s Saadiyat Island. While reluctant to confirm details, Park did explain that the deal called for the development of a “working community” of properties entirely networked using Home Vita technology. He says the development should be ready for launch within three years. “Today, consumers can use their PCs to relay multimedia content remotely to monitors throughout their homes,” he says. “Smart home technology will change the way homeowners live and interact with technology. The vast majority of consumer electronics and household appliance products can be wirelessly connected and can be vastly improved as a result of this technology.” Despite a strong performance in the US market, Sony’s Vaio is notable by its absence in the Middle East, as its Gulf subsidiary has refrained from introducing its home networking portfolio into the region. When approached by ECN to explain its inactivity in the Middle East market Sony Gulf declined to comment. The increased availability of networked appliances and networking solutions is also creating a niche in the retail sector for companies offering smart home products and services, particularly in the UAE. The most recent high- profile entrant to the sector is EON Smart Home, which was formed by Dubai-based IT and electronics retail stars Arun Nagar and Leon Beuyukian. The company’s first store, which opened last year in Dubai’s Mall of the Emirates, boasts a comprehensive range of smart home devices, appliances and networked applications from the industry’s leading vendors. Beuyukian claims that EON Smart Home represents a unique retail proposition in the Middle East. “While there is plenty of smart home technology available in the regional market, no retailer has previously packaged the various products together to provide a range of solutions to consumers,” he says. EON offers a comprehensive range of smart home automation packages aimed at the entry-level and high end segment with prices ranging from US$500 to US$27,000. According to Beuyukian, the company’s target market consists of consumers earning a salary of more than US$4, 000 per month. It is a less daunting prospect launching a retail concept such as EON in Dubai than other markets due to the fact that a large number of consumers here are early adopters and disposable income is generally quite high,” he explains. “However, we have found that property developers in Dubai aren’t that keen to increase the cost of their developments by including home automation technology, so we’re currently targeting individual end-users.”||**||Digital Convergence|~|EON.Web.jpg|~|Leon Beuyukian CEO of EON Smart Home claims that the limited network capabilities of the Middle East is hampering the home-based multimedia network product market.|~|Beuyukian says he and Nagar plan to pursue an aggressive retail expansion strategy in the GCC. “We’re opening a new store in Abu Dhabi at the end of March, which will boast 1, 500 sq metres of floorspace,” he explains. “We’re also planning to establish stores in Bahrain and Qatar before June, 2007. We are currently assessing various locations in Kuwait, and finally, we expect to enter the Saudi Arabian market before the end of this year. “We will initially target the GCC markets but we are hoping to expand into other countries across the region in the near future.” Despite his positive forecasts for the region’s digital home server market he does highlight the comparative lack of enthusiasm of vendors to enter the Middle East’s ‘smart’ technology segment. “Brands such as HP and Dell have yet to introduce their products to the Middle East market,” he explains. “Sony Vaio is a very strong brand in this segment, especially in the US market, but for some reason they are not present, in this segment in the Middle East.” The global smart home market has recently been valued at US$1.6 billion and is forecast to grow to US$10 billion by 2010. Beuyukian maintains that vendors staying out of the Middle East are underestimating the potential of the regional market. “The rate of growth in the Dubai automated home market could potentially outstrip that of the US within the next three years. “Dubai is a classic example of what is termed as an ‘early adopter’ market and bringing products to this region could prove lucrative for vendors in this segment especially those targeting high profit margins,” he adds. Speculating on the factors restraining the market he points to the limited availability of high speed internet connections in the Middle East. “What’s hindering the growth of this segment is the limited network capabilities on offer from telecoms companies. Once internet operators are able to provide consumers with higher internet connection speeds the market should receive a boost. “Once this market is more competitive and companies can provide consumers with enhanced connection speeds, vendors will pay more attention to the region’s home server segment,” he explains. The Middle East’s consumer electronics channel is reporting positive feedback despite the apparent apathy of certain industry stalwarts such as Sony to galvanise consumer interest in this market segment. Industry research firm iSuppli maintains that with adequate investment, telecom companies can share in the success of consumer demand in this market segment. In a recent report the firm claimed that this market segment will account for over 25% of broadband revenues by 2010 worldwide. All reports suggest that success in this market is reliant on the consumer electronics industry’s current buzzword: ‘convergence’. Channel players suggest that market performance rests largely on the industry’s ability to supply it with goods and services. With this thought in mind, the ability of consumer electronics vendors, IT companies and telecom-providers to work together will be crucial to the development of this market segment. ||**||Apple |~|appletv.box.jpg|~|The Apple TV will start shipping worldwide in March 2007.|~|With Steve Jobs unveiling the iPhone at this year’s MacWorld expo to much fanfare, the advent of the Apple TV was almost an afterthought. However, this does not accurately reflect the US-based company’s ambitions for the product. Marketed under the banner: ‘The revolution will be televised’; Apple claims the Apple TV will be at the centre of the immensely successful ‘iLife’ concept it continues to push. Users can connect to the company’s iTunes website enabling them to download files using their TV as well as stream multimedia content from their Mac, or PC, using a wireless network.||**||Hewlett Packard|~|hp_mediasmartserver1.jpg|~|HP's MediaSmart Server was unveiled at this year's CES expo in Las Vegas, USA.|~|The US-giant used this year’s CES expo in Las Vegas, USA, to introduce its MediaSmart Server enabling consumers to access and share multimedia content between multiple devices both in the home and from remote locations. The company claims its new product rollout will allow users to stream content directly from their computer to their television using both the Windows XP and Vista platforms. Traditionally known as an IT vendor, HP has also seen the ‘smart home’ trend as an opportunity to branch into the more conventional consumer electronics product segments by introducing a raft of liquid crystal display (LCD) and plasma panel display (PDP) TVs. The firm’s 37-inch MediaSmart LCD TV enables users to download content from the internet as well as access information from other home based devices using a wireless network.||**||Microsoft|~|xbox-1.jpg|~|Microsoft's activities in the home-based multimedia network segment have centred around its Xbox 360 console.|~|The company’s forays into the home multimedia segment have thus far centered on its Xbox 360 console. The company has been expanding the device’s role beyond its orthodox gaming capacities with the introduction of the high definition (HD) DVD add-on recently introduced to the US market. Xbox-users can also download movies and share content through the product’s member-site. More recently the company announced plans for the device to support internet protocol-based television (IPTV) services. Microsoft’s big announcement at the CES was the Windows Home Server launch, a slimline version of its current operating system that represents its first attempt at targeting consumers with its home multimedia server products. ||**||Samsung|~|Samsung.box.jpg|~|Samsung has conducted some successful trials with its Home Vita technology in UAE real estate projects.|~|The South-Korean juggernaut is still refraining from a fully-fledged entry in the Middle East market but maintains that its Home Vita series should impact the market considerably after successful trials in Abu Dhabi real estate projects. Samsung’s other entries in this segment include its IPTV series enabling users to watch video content streamed from the internet. Its SMT-7020S range supports broadband connectivity for web-browsing on TV sets, video-on-demand features and is capable of sharing multimedia files with multiple PCs on a home-based network.||**||Sony|~|Sony.XL1A_Front_F_02_lg.jpg|~|Sony Vaio's VCX-XL3 Digital Living System was a highlight at CES 2007, in Las Vegas, USA.|~|Sony also used the massive publicity opportunity of CES to demonstrate its total home entertainment package including the new Vaio home media server, VGX-XL3 Digital Living System and Wireless Digital Music Streamer. The rack-style multimedia PC bridges the gap between the computing and entertainment needs of consumers according to the Japanese vendor. The device also allows users to watch and record both analogue and digital TV on their PC hard drives using built-in ATSC and NTSC TV-tuners as well as CableCARD support. Other notable features of the XL3 are Blu-ray and conventional-DVD compatible drives allowing users to view content in full HD1080.||**||

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