CE Vendors and Chipmakers Are Betting Heavily on Home Networking

When Cisco acquired Linksys in March 2003, it was a clear validation of the future potential of home networking.

OYSTER BAY, N.Y. - - July 31, 2003 - - When Cisco acquired Linksys in March 2003, it was a clear validation of the future potential of home networking. In July 2003, Intel and Linksys/Cisco announced a technology and marketing program aimed at improving consumers' Wi -Fi experience.

"This is a further indication of the momentum building in the background, taking the home networking experience to the next level," contends Vamsi Sistla, ABI Senior Analyst. "Even the Wi -Fi Alliance is busier these days, as different networking companies and chipmakers are becoming more active in the organization in order to better position themselves for new market opportunities."

Whether it is for wired or wireless technologies, all of these developments are good for the future of home networking and the consumer computing experience. A few industry trade associations are finding new members interested in navigating this territory. A few weeks ago, Microsoft announced that it is joining the Internet Home Alliance (IHA). IHA already boasts IBM, HP, Motorola, Sun Microsystems, SBC communications and other technology giants as members. To protect premium content and to ensure interoperability among various digital products, the Digital Home Working Group (DHWG), a non -profit organization with over 17 members, works from the content and consumer electronics perspective. This group hopes to market its products by mid -2004.

Others interested in joining the home networking fray include service providers, notably cable operators and broadband providers. These companies have begun to offer home networking packages (wired as well as wireless) for consumers, in order to connect multiple computers, printers, game consoles and other handheld devices with one high -speed Internet connection.

Wired and wireless home networking technologies will meet with great demand. According to the ABI reports, "Residential Entertainment Technologies" and "Entertainment Networking ICs": By the end of 2008, there will be over 80 million Wi -Fi and other wireless enabled video and host devices, and over 25 million will be UWB enabled, worldwide; Network enabled digital TV shipments will grow at an annual CAAG rate of 121%, while networked DVD recorders will grow at over 300% through 2008, worldwide; and By 2008, 20% of worldwide PC monitor shipments will be Wi -Fi, UWB, or Powerline enabled.

It is evident that there exist many groups and alliances working synchronously (i.e., so that products become "interoperable"), independently - or competitively - with other groups in efforts to take digital home networking to the next level. There is also a massive influx of traditional technology companies pursuing home networking opportunities - venturing into areas that are not their core market segments. This will certainly increase the competition among various companies offering presumably more cost -effective and user -friendly solutions to consumers. The winning companies, technologies, and solutions will be ones that make the consumer computing experience valuable, useful, and simplified.

About ABI ABI is a N.Y. -based technology market research firm founded in 1990. ABI publishes research and technology intelligence on the wireless, automotive, electronics, networking and energy industries. Details can be found on the web at alliedworld.com or by calling 516 -624 -3113.

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