Talk to anyone about the AV business and the first word out of their mouth will more than like be Dubai, but take the time to listen to the third or forth words and another name springs to mind. This month’s insight tries to look past the glaringly obvious to other opportunities in the region.
For most of the last decade, the economic lime light in the Persian Gulf has been firmly fixed on Dubai, Jewel of the Emirates. Its government’s efforts to turn an economy based on natural resources into a fully functioning service and industrial economy have been spectacularly successful leading to a GDP of $46bn an growth of around 10% year on year.
Massive construction continues seemingly unabated in the UAE with something of the order of $350bn worth of construction projects currently on the books nation wide. However it is also true to say that the light emanating from Dubai city, can have the effect of blinding the observer from the remarkable growth occurring in its neighbours, even in its fellow Emirates.
Abu Dhabi, the largest of the seven Emirates does in fact have a larger economy and is the richest of them. Accounting for the lion’s share of the nation’s $168bn GDP in 2005, and this is reflected in the experiences of Liju Karula, Sales manager responsible for the UAE for integrator GPC Systems.
“Previously it has been seen that everything was all about Dubai, and places like Abu Dhabi were much smaller markets for audio visual equipment. But much more business is now being done in the other Emirates than before.
“This spreading of the wealth has been occurring for more or less exactly a year. Currently our biggest segment is the corporate market, particularly in the banks and financial institutions. But slowly but surely, that business is getting shifted towards hotels, and in Abu Dhabi there are some forty to sixty five 5-Star hotels due to be completed by 2010.
“I would say there is a bit of stagnation in some of the oil companies, because they are almost saturated with high-tech audio visual equipment. They were the early adopters and the first businesses here. What I have heard recently is that there’s a lot happening in Qatar.â€
Maher Huseini, is another man with good things to say about Qatar. Director of IntMark distribution, his company bases out of the Jebal Ali freezone in Dubai from which it services the whole of the Middle East.
“Qatar is rapidly accelerating investment, real estate, education, banking and financial services are all realising significant growth. Education across the region is burgeoning in fact. There is both public and private investment in the infrastructure. Young people from the region are being denied in many cases visas to study abroad and so their home countries are being forced to invest in the kind of high level education facilities that they would have sent their children to in the USA or the UK. I’d say that the UAE and Qatar are leading the way in this field.
“Digital signage is another area of growth in the region, particularly on University campuses. Real estate projects also use a lot of digital signage where owners want to give purchasers more interactive information about the properties.
“It’s not really possible to identify vertical markets which are under performing if I’m honest. There are just several sectors that are performing amazingly well.â€
Technology trends in the region are actually similar to those the world over. Digital signage is finding favour in a number of venues including education and government sites, corporate facilities and also for public information.
Another key technology identified by a number of interviewees is cable replacement. Crestron’s QuickMedia and Extron’s MediaLink both seem to be firm favourites amongst integrators and impressed customers, who are now much more willing to use their IT networks for AV services.
High Definition appears to be a little less enthusiastically received. And in some cases is blamed for muddying the waters. Certainly, whilst the Middle East seems to be a fertile market for what is becoming known as videoconferencing part two, the advent of HD video conferencing has met with a cool reception. GPC System’s Karula sees more of a demand for mid range solutions from small to medium sized business looking to save on travel costs, than for enterprise level HD solutions. He also suggests that the increased use of VC solutions is driving down the average size of facilities such as board and meeting rooms.
Away from the high-tech hubs of the oil rich nations there is still business to be done, but at a less frenetic pace. Emad Adly is general manager of Audio Technology Egypt, a distributor and integrator of some 15 years standing. The company distributes brands such as DIS, Sure, Crestron and Extron in a country, which still lacks significant IT infrastructure. For him AV is still done mainly over analogue systems even for important clients such as the State. Adly cites the lack of specialist AV consultants in the country – it’s hard to persuade a client of the need for a Cat-5 solution if the consultant is largely unaware of the possibility. He said: “Until consultants become better informed about new technologies, we cannot really become involved in using them.†Adly’s greatest challenge is posed by his competition, which largely rely on low-cost solutions made from unbranded products to beat him on price. A struggle that integrators the world over can surely relate to.
There is one country however that we’ve so far studiously ignored- Saudi Arabia. Despite having a reputation as a relatively hard country for outsiders to do business in it still has a staggering GDP of $310bn in 2005. There is enormous potential, and demand for AV technologies in the country. A fact attested to by Mr Yousuf Head of audio visual Services for Modern Media Systems.
The company is an installation firm, which provides complete design and build services for their customers. “The market in Saudi Arabia has been booming for about ten years now.†(Corresponding to a recovery in Oil prices in the late 90’s) “But with the new King there have come billions more dollars of further investment. We are benefiting from this through our work for both the government and private enterprise.â€
A large part of the investment that Yousuf refers to is the proposed King Abdullah Economic City. This megacity project has an estimated cost of $26.6bn and will cover an area of 168km2. “Education and healthcare are primary focuses of investment for the government and therefore strong areas of business for us. We have recently been involved in digital signage projects in our largest hospital and expect this to develop elsewhere.â€
As mentioned before, the country is certainly opening its borders to more outside organisations. Mohammed Ghalayini is the territory manager for Carlipa systems, a digital signage solutions provider: “The Saudis are really catching up to the technology level of their neighbours. The sales pitch is slightly different however. In Dubai you gain a competitive edge as a business by looking better than your peers. In Saudi, if I want to sell a system I have to make strong business case for the investment.†IntMark’s Maher Huseini admits that as much as 50% of his business in the region is done in Saudi Arabia.
Perhaps it’s less a case of a sleeping giant, and more of the elephant in the room.