Integrators and Exhibitors Enjoy Another Record-Breaking EHX in Orlando, Fla.

They say the economy is soft, but you wouldn't know it by the Spring 2004 Electronic House Expo (EHX). Nearly 7,100 industry professionals flocked to Orlando, Fla., March 10–13, to take in the sights: 255 exhibitors, a High Performance Home Theater Screening Room, eight full-day boot camps, 50 seminar sessions, and plenty of custom-installation business tips.

The show consumed 156,000 gross square feet of space, up 69 percent over last year's event. Even exhibitors in the nethermost regions of the show floor report steady traffic. "We had possibly the worst booth location on the show floor, but we were continuously busy. … It was a great show for us," says Mark Stiving of Destiny Networks.

Sponsored by the Consumer Electronics Association, and supported by CEDIA, CompTIA, PARA and the Internet Home Alliance, EHX is held twice per year on the East and West coasts. The next event is November 15–18, 2004, in Long Beach, Calif. For more information, visit www.ehx2004.com.

In this space, we review some of the keynote presentations.

Thin Is In, sponsored by LG Electronics LCD, Plasma Colliding

To say that LG Electronics is bullish on the future of big-screen TV is an understatement. Delivering the keynote address kicking off EHX, John Taylor, vice president of public affairs for LG Electronics USA, outlined a bright—very bright—future for high-definition television in his address, titled "Thin Is In." Taylor cited a slew of data from the Consumer Electronics Association to support his positive outlook:

• In 2003, 8,880,483 digital TVs were sold.
• High-definition cable is located in 143 U.S. markets.
• There were $15 billion in digital TV sales last year.
• In 2003, Q4 sales were up 62 percent from the previous year.
• The average price of a plasma display has fallen to $4,000, compared to $7,250 in 2001.
• The average price of an LCD display has increased to $627 in 2004 from $119 in 2001.

Taylor attributes the increase in LCD prices to the growth in screen size. "Five years ago, there were no big-screen LCDs," he told a packed room of several hundred attendees. Taylor says LG's predictions for flat-panel sales are much more bullish, with expectations for $10 billion in 2004. He sees LCD surpassing plasma in unit sales by 2007.

For installers, Taylor says the transition from analog to digital broadcasting has a direct correlation to increased sales of flat-panels, audio, accessories (cables and remotes), furniture and software. He recommends installers keep the pressure on their local cable providers to seek out a recurring monthly revenue partnership, perhaps revolving around the reselling of "smart" cards for pay-TV services. "There is certainly recurring revenue to be had. It can be similar to what alarm dealers do, but at a lower revenue stream," he says.

He also advised installers to offer ongoing services to their customers that help them identify HD content. He cited www.antennaweb.org and www.titantv.com as good sources for online guides that dealers can pass on to customers, perhaps in a recurring revenue program.

Builder Bull Session, sponsored by Vantage Verizon to Push Connected Communities

Integrators and homebuilders may have an easier time selling technology upgrades now that Verizon Communications has announced its launch of an aggressive push to bring high-speed communications to more planned communities.

Speaking during the "Builder Bull Session" keynote, Richard Beville of Verizon Communications Retail Markets announced that the large national phone company will be installing high-speed, fiber-based infrastructures to allow developers to build "connected communities." Beville said Verizon will be "most aggressive" in targeting master-planned community developers in California, Texas, Florida and Northern Virginia/Maryland.

Builders and integrators have long complained that model homes with cardboard PCs and cardboard televisions do not adequately influence prospective homebuyers to add technology amenities. In the past, phone companies have been hesitant to bring high-speed connections to a development for just the model home, knowing there will be no return on their investment for six months, says Beville.

Another panelist, Don Whyte, president of the southeastern division of Newland Communities, one of the nation's largest master-planned community developers, said the infrastructure fiber from Verizon will influence builders to install real plasmas and real PCs, and sell more high-speed connections. The end result will be homes that sell faster and for more money, according to Whyte.

CE Pro Forum, sponsored by GE Security, Optimism Runs Deep

Riding the wave of another successful year-in-the-making for the building industry, the installation industry promises to have an equally rewarding year... "The overwhelming factor from all of this data is widespread optimism," said Duane Paulson, vice president of strategic marketing for GE Security. Paulson spoke to an audience of dealers during the CE Pro Forum general session at EHX Spring. CE Pro is a sister publication of TecHome Builder aimed at custom electronics installers. For the second year, he presented the results from

the Electronics Installation Business (EIB) Profile Study, conducted by EH Research and sponsored by GE Security. Paulson indicated that installers expect the volume of their jobs to increase 24 percent in 2004 (to 156 installations) over 2003.

Other interesting data show that high-performance audio is making headway among dealers. Respondents to the survey reported that 28.3 percent of their installations in 2003 included a high-performance audio product.

Meanwhile, the middle class continues to be the primary market for integration services. Substantiating a trend that was first identified in last year's survey, dealers reported that the largest portion of their total revenues (22.5 percent) was derived from affordable homes in the $300,000 to $500,000 price range. Almost 30 percent of installers get most of their revenues from homes costing less than $300,000. This debunks the myth that connected homes are solely for the wealthy owners of $2 million-plus mansions.

The Hyper-Connected Home, sponsored by Leviton, Better, Faster, Fair

Providing a futuristic view of the connected home, Ian Hendler, director of business development for Leviton Integrated Networks, presented a keynote address titled "The Hyper-Connected Home." To say the least, Hendler successfully "hyped" the audience about the future marketing potential of high-speed services.

"We've gone from the propeller age to the jet age, but still need to get into the rocket age," said Hendler, quoting an analogy he used throughout the speech. The yet-to-be-reached "rocket age" refers to the inadequacy of download speed for streaming media. "Today's broadband speed is [not sufficient] for digital content, especially for HDTV," he said, noting that a typical HDTV download that used to take 45 days on a 56k modem can today be downloaded in 1.7 days using a 1.5-Mbps modem. "We've come a long way, but still have a ways to go." Hendler believes online gaming will become a driving force in increasing download speeds.

He also outlined the issues surrounding digital rights, which some installers believe has been an inhibitor to the adoption of the connected lifestyle among some mainstream homeowners. Hendler advised installers to educate their customers on the subject.

"'Fair use' is the determining factor behind the battle between Hollywood and the recording industry vs. consumers and manufacturers," Hendler added, defining it as the right to record digital content in your home for personal, non-commercial use.

Finally, Hendler addressed two other key trends that could boost the hyper-connected home adoption: fiber to the home and WiMax (80216a) technology. He cited data showing that fiber-to-the-home increased 330 percent in 2003, with 315,000 homes connected last year, compared to just 72,500 homes in 2002. He also advised installers to keep abreast of the development of a new Intel-backed WAN technology, WiMax, that offers 30 miles of higher-bandwidth wireless connectivity from a main station.