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ABI's forecast is that the aggregate annual revenues from residential gateway hardware will reach $4.7 billion by 2005. The majority of this will be accounted for by broadband residential gateways. In the long-term the market will begin to see "universal" gateways. |
Navin Sabharwal Navin Sabharwal is a Senior Analyst with Allied Business Intelligence, covering residential technologies. He is the author of the report titled "Residential Gateways: Enabling Services Into The Home." |
At the Consumer Electronics Show (CES) held in Las Vegas in January there was considerable interest demonstrated in residential gateways. Virtually every diagram illustrating the configuration of the home network, or alternately how broadband is delivered to home, had a residential gateway box prominently highlighted.
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What Exactly is a Residential Gateway?
The residential gateway is an intelligent gateway between the home local area
network (LAN) and the wide area network (WAN). This gateway is envisaged as a
centralized, physical device that not only connects to local client devices, but
actually enables home networks, too.
As service providers continue to roll out broadband services, it will become increasingly common for multiple services to be delivered over the same infrastructure: copper wire for telecommunication networks and hybrid fiber/coax (HFC) for cable networks. This means that a number of devices, some networked, will be trying to interface to the WAN so that they can access the pertinent communication signals. The solution to this access contingency dilemma is a gateway device that acts as a "traffic cop."
Some people have a problem trying to deal with the numerous physical implementations of these gateways. But the residential gateway is not just a product, it is also a functionality. This functionality can form the basis for an entirely new product architecture, or it can be embedded into an existing intelligent device architecture.
Types of Residential Gateways
Allied Business Intelligence (ABI) has segmented the residential gateway market
into the following categories based upon architecture and target market:
- Broadband Delivery - To a large degree broadband delivery into the home will define residential gateways. Many of the first generation residential gateways will be simply broadband modems with home networking functionality integrated into the box. Within the broadband area the two key implementations will be cable and DSL residential gateways, and these will be primarily targeted at service providers rolling out broadband services.
- Bridging Only - Not every gateway that is focused on broadband has to have the WAN interface integrated into the unit. Some gateways may be bridging gateways because they include the routing/home networking functionality, but not the high-speed modem. This is a good solution for those who already have broadband access, and may be a suitable retail-level solution.
- Utility-Centric - Another class of residential gateways will be those focused on telemetry applications. ABI terms these utility-centric because the primary service in almost all cases is automated meter reading (AMR). With deregulation, utilities, particularly in Europe, are becoming more focused on AMR and demand-side load management. Therefore the ability to provision some form an in-home control network is important. In many cases AMR and other services, particularly security monitoring, can be provisioned by a single box. This will be a utility-centric gateway that does not necessarily rely on a broadband connection.
- Structured Wiring - Structured wiring is another way of provisioning a residential gateway. It provides unparalleled bandwidth throughout the home. Structured wiring in the home is essentially a star-topology wiring paradigm that connects advanced communication cables to a home server, also known as the distribution panel. In this way the home is wired for digital services. Though traditionally thought of as more of a "hardwired" home networking solution, the distribution panel will, ABI believes, evolve greatly, adding intelligence and a better integration of broadband customer premises equipment (CPE).
- PC-Centric - The PC is also a potential residential gateway platform with the primary PC acting as a router. ABI does not believe that the PC will be a viable residential gateway platform beyond the short-term. It is simply not conceivable that a PC can operate reliably for 24 hours a day, 7 days a week. In addition to its inability to act as a mission-critical device, it is also not the optimal solution for non data-centric applications.
ABI Predicts
ABI's forecast is that the aggregate annual revenues from residential gateway
hardware will reach $4.7 billion by 2005. The majority of this will be accounted
for by broadband residential gateways. In the long-term the market will begin to
see "universal" gateways. These devices will not only integrate the
WAN interface and home networking interfaces, but also will have embedded
powerline transceivers for telemetry applications.
The visible beneficiaries of the emergence of the residential gateway market are the gateway vendors. However, fierce competition may ensue as barriers to entry are low and success is dependent on the ability to tie-up service providers. Hence the real winners will be home networking ingredient providers such as Broadcom, Proxim and ShareWave.
Under the PC-based data home networking paradigm, these firms' primary markets were network interface card (NIC) vendors and PC original equipment manufacturers (OEM). However, in the emerging gateway business model there is considerable potential for them to sell silicon to residential gateway OEMs. Moreover, the market potential is extended to other Internet-aware devices that need to interface to the residential gateway in order to access the WAN. This creates a considerable silicon and intellectual property (IP) core market.
Allied Business Intelligence, Inc. is an Oyster Bay, NY-based technology research think-tank specializing in communications and emerging technology markets. ABI publishes strategic research on the broadband, wireless, electronics, automation, energy and transportation industries. Details of these studies can be found at www.alliedworld.com . Or call 516-624-3113 for more info.
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