On the potential market from the firm's homepage:
Companies Step Up Home-Networking Efforts
By BILL MENEZES March 22, 1999
Panasonic Consumer Electronics is pumping $10 million into silicon developer Epigram Inc. to help foster solutions for the young but potentially huge high-speed home-networking market.
The investment -- the first from a new venture fund created by Panasonic's parent, Matsushita Electric Industrial Co. Ltd. -- reinforces the growing interest by major mainstream consumer-electronics powerhouses in tapping home and small-business demand for simple networking.
"We're interested in Panasonic because we believe that a billion types of devices will get connected to the Internet in the future," said Jeff Thermond, Epigram's president and CEO. "And the traditional data-communications manufacturers, with the exception of 3Com [Corp.], do not have what you typically think of as consumer brands."
Epigram's "iLine 10" chip set supports network connectivity over existing home phone lines at speeds of up to 10 megabits per second.
Besides the investment from the new Panasonic Digital Concepts Center, Epigram and other PDCC partners get access to its 20,000-square-foot incubator facility, plus Matsushita's manufacturing and research-and-development resources.
The Sunnyvale, Calif.-based company was already working with 3Com -- which also has investment stakes in Epigram-Nortel Networks, Texas Instruments Inc. and Cisco Systems Inc. as commercial partners -- but it welcomed a new foothold in consumer-oriented solutions.
Attention from consumer-electronics giants such as Panasonic, Sony Corp. and others is widely regarded as crucial in spurring the growth of the nascent home-networking market.
The home-networking equipment currently being developed would enable such applications as multiplayer gaming or access to sophisticated video, audio and text content deliverable via cable's broadband pipe to the home.
It is also a framework for multiple personal computers, televisions, VCRs and other devices to share a single Internet connection or peripherals.
"It's not as if everybody's out there clamoring for home networks," said Karuna Uppal, an analyst for consumer-market convergence at Cambridge, Mass.-based The Yankee Group. "But there are some segments of consumers that may not know that they're looking for a home network, yet they are looking for the functionality that a network would allow."
The Yankee Group estimated that about 500,000 new home networks will be installed in 1999, jumping to 2 million next year.
Announcement of the Panasonic investment came on the heels of a deal unveiled two weeks ago by Microsoft Corp. and 3Com to jointly develop cobranded home-networking kits, with availability planned for OEMs (original-equipment manufacturers) by this summer and for retail by the fall.
The initial kits -- based on the standards of the Home Phoneline Networking Alliance and the Universal Plug and Play technology being pushed by Microsoft -- will link devices at 10 mbps via home phone lines or Ethernet, with plans to later offer wireless or home-power-line-based links.
The companies also indicated that while the initial products would focus on PC connectivity, other devices, such as handheld PCs or gaming machines, should eventually fit into the mix.
"What's driving this is the growth of broadband in the next few years," said Adam LeVasseur, Microsoft Hardware Group's product manager for home networking. "Right now, we think that there are 15 million to 20 million multiple-PC homes, and with lower-priced PCs and broadband service, we see that doubling over the next three years."
Panasonic sees that as an opportunity to create a landscape whereby its core products -- TVs, VCRs, DVD players and the like -- share capabilities across the network.
"The whole reason of doing home networking is to be able to share resources along multiple appliances," said Paul Liao, chief technology officer for Matsushita Electric Corp. of America.
"I wouldn't say that the vision is for everything to migrate to one place. I think that capabilities will be distributed across multiple appliances and distributed across home networks," Liao added.
Panasonic has already made some halting steps toward getting more involved in broadband equipment. The company is still developing a standards-based cable modem after an earlier joint effort with Harmonic Lightwaves Inc., announced in January 1998, failed to bear fruit.
Liao said Panasonic wants to have a product certified under the industry's initial Data Over Cable Service Interface Specification 1.0 interoperability protocols, but it might aim for later enhanced standards, depending on how market demand develops.
In another step toward home networking, this summer will mark the debut of Panasonic's "MicroCast" device, which enables consumers to channel their PCs' output to their home televisions over wireless connections.
Liao said the setup allows the viewer to use a single Internet connection for both PC and TV, and it does not require the two devices to be in the same room.
3Com was already developing a lineup of home-networking gear under its "HomeConnect" brand, incorporating Epigram's chip set to network PCs, peripherals and other devices over home-phone wiring.
But Neil Clemmons, 3Com's vice president of consumer marketing, said HomeConnect would complement the upcoming 3Com-Microsoft kits, with planned products possibly combining cable or digital-subscriber-line modems with home-network adapter cards.
"What you'll see is that HomeConnect products will bridge more into the wide-area space, while the Microsoft-3Com products will stay more within the local-area space, which is the home," Clemmons said.
He added that several MSOs had expressed interest to 3Com about bundling the upcoming networking products in conjunction with their own high-speed Internet-connection services. |
