CES: Set-top Boxes, Home Networking Grow Up.....................
thestandard.net
By James Niccolai
LONDON – When the Consumer Electronics Show kicks off in Las Vegas next month, home-networking products that allow users to link PCs with other electronics devices and set-top boxes designed to enhance plain old television viewing are expected to take center stage.
Organizers say more than 1,800 IT computing and consumer electronics firms will be on hand at the show, which runs Jan. 7 to Jan. 10. They will show off the latest in mobile electronics, home automation systems, satellite technology, computing, home networking and entertainment systems.
Many of the products reflect the ongoing convergence between telecommunications, the PC industry and consumer electronics, said Roger Gulrajani, Microsoft's group product manager for PC companions for Windows CE.
"In this confluence companies are asking, 'How do we extend the information on PCs to new classes of devices?'" Gulrajani said.
Two prominent players in the emerging wireless home-networking market, Proxim and ShareWave, will both be on hand to show their latest wares. Home networking is set to move from the fringes to the mainstream in 1999, one analyst said. "It seems to be a market that's really beginning to open up. A lot of the smaller companies we've talked to in the last year have finally finished their product development and worked through their bugs," said John Armstrong, chief networking analyst with Dataquest.
Driving the market is an increase in the number of homes with more than one PC, and the availability of movies, music and digital content on digital video disks and the Internet, according to Bob Bennett, ShareWave's VP of marketing.
Meanwhile set-top boxes will be on display from the likes of industry leaders such as General Instrument and Scientific-Atlanta. Set-top boxes are an emerging, nebulous class of product that make television a more interactive experience, often using an Internet connection that lets users surf the Internet and shop, as well as look up information related to programs they are watching.
"This is the first true Internet appliance that will come into the consumer space," said Dataquest analyst Van Baker.
But Baker thinks the buzz at CES will be around two smaller companies whose set-top box technologies offer relatively limited functionality. Replay Networks and TiVo both offer appliances that record television programs based on preselected user preferences and save them to a hard drive in the set-top box. The systems have VCR-like controls that allow users to rewind and pause broadcast programming.
TiVo and Replay Networks "offer a really logical progression to convergence because they take a lot of computer technology and apply it to television in a manner that is very easy for the consumer to understand," Baker said. "I don't think it makes sense to bring more feature-rich boxes to market until people know what the future wants."
As firms like ShareWave and TiVo preen their technologies for consumer markets, they recognize the need to strike deals with consumer electronics firms. Consumer giants like Hitachi, Philips and Sony carry brand names that users associate with quality and reliability, according to ShareWave's Bennett. They also understand ease-of-use requirements and have channels to distribute products, he said.
"In our segment we think having consumer electronics support is probably a mandatory requirement," Bennett said.
At the nexus of the consumer electronics-IT convergence sits Cisco, which makes many of the routers, switches and other IP-networking products that carry Internet content to the home. It should come as no surprise then that John Chambers, Cisco's president and CEO, will give one of the opening keynote addresses at CES, alongside Howard Stringer, president of Sony of America.
"Cisco wants people in the entertainment and computing industry to understand that they are the way to get something from point A to point B over the Internet," said Dataquest's Van Baker.
Rumors abound that Cisco will announce it is forming a consumer division that will market products to be sold directly into the home. One analyst doubts Cisco will sell directly to consumers, but thinks the company might partner with consumer electronics manufacturers and provide technology that would help them develop Internet-enabled products, thus boosting demand for its own products.
"Sony has the access to the consumer market, not Cisco, so why re-create the wheel when you can partner with consumer electronics makers to reach the consumer?" asked Dataquest's Armstrong.
Other products to look out for at the show include high-definition television sets from Mitsubishi, Samsung, Panasonic and others, although pricing and technical issues mean that the market will take one to two years to advance, Dataquest's Baker said.
Analysts also expect to see MP3-based handheld audio systems, which allow users to download music files from Web sites and carry them around "Walkman" style, as well as a plethora of digital cameras, computer games that use surround sound, smart phones, electronic books, handheld computers and DVD players.
"I think it's going to be a good CES," Dataquest's Baker said. "I think there's some good tangible stuff that's in the market now, or on the verge of being in the market, that will be compelling to consumers and at a price point consumers will be interested in – and that will be a refreshing change for CES."
James Niccolai writes for the IDG News Service.
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